Fergus Cassidy

Line dancing

A MAGIC eight-ball would be much more fun. Shake, shake. Will the price for broadband access be reduced? Most definitely! Shake, shake. Will the cost of line rental be reduced? No! Shake, shake. Will it be increased yet again? Most definitely!

The week that's been in it has been like that. Things are usually a bit lethargic around this time of the year. 2004 is but a pup and while Funderland may have been put away with the rest of the Christmas decorations, there's still a giant telecoms roller coaster in town.

Following the Jekyll and Hyde price reduction/price increase announcement by Eircom, Monday, Tuesday and Wednesday were quite a ride. Radio station switchboards and online bulletin boards burst back to life following the seasonal slumber.

The anger and outrage at the third telephone line rental increase in 13 months was palpable and understandable. The previous day's announcement of a reduction in broadband prices was ignored. Largely because only a minority of people will benefit at this time and the existing prices were already unreasonable. The line rental increase will effect the majority of the population and there is every right to be angry.

And the plain fact of the matter is that there is no one watching out or acting on behalf of citizens when it comes to telecommunications. The regulator is neutral, the government is neutral, Europe is neutral and the industry, naturally, looks after itself.

We're getting our pockets picked time after time, each occasional more skillful and subtle than the best the Artful Dodger could ever come up with.

A thick fog always helps to pick a pocket or two and last week it was there in abundance. If the soon-to-be new members of the European Community are looking for the low-down on jargon, passing the buck and fudge they've come to the right place.

There was mention of the "totality of bills", "ribbon housing", "population spreads"; "need for investment"; "price capping" and my own personal favourite the "basket of services". Yes another week of basket cases.

Maybe I'm looking for some - any - crumbs from the table but in the game of high stakes poker for Ireland's telecoms future, I believe that Eircom revealed some of its hand with the line rental increase. An ace at that. And permit me to say why.

There is no doubt at all that the voice side of telecommunications has gone mobile. With an 83% penetration rate, mobile phone companies now have the lions share of voice traffic revenue and there's no going back. Eircom is therefore not in a realistic position at the moment to grow its voice traffic.

So the company's only option as a fixed line operator is data traffic. It has the monopoly on the copper wire network and this is now the trump card.

If there was no such thing as the internet or no need to transfer data it would be a straight choice for people to dump their land line and opt for cellular. If it's just a question of voice telephony then people can choose one or the other.

But with data and the internet that choice just isn't there for the foreseeable future. The copper network is essential, especially for commerce. The fixed line business is the entrance to the information superhighway and line rental is the toll charge.

Don't take my word for it. Michael O'Brien, a credit analyst at investment house Standard & Poor's, said last summer that "the ratings on Valentia are supported by the continuing strong market position and consequent strong profitability of Eircom's fixed-line business".

The threat of losing market share to other broadband providers can be countered by lower prices and slick marketing, but renting telephone lines will be protected at all costs.

There is no choice. With the possibility of government-owned alternative networks coming on stream, Eircom is preparing to retrench back to its core asset - copper ownership.

While the company can talk about the importance of investment in the network until its blue in the face, the reality on the ground is quite revealing.

If investment is measured in terms of fundamental commitment to the network, why is Eircom so shy in agreeing a minimum guaranteed access speed? Legally the company is currently not responsible for providing any guarantee of quality of access to the internet. If it's not guaranteed, does that mean its not important?

In a modern forward-looking economy is commitment to telecoms infrastructure really only a Monday to Friday endeavour? Look for service or repair at the weekend and it's non-existent. The line rental charge, however, is 24/7.

These may seem trivial points but they do reveal a chasm of difference between what Eircom thinks is important and what its customers do.

Now that the company has upped the poker stakes, the only player that can call is the government. It let us down desperately when it sold off a vital piece of national infrastructure.

It would go some way toward making amends by holding its nerve and moving decisively ahead with its own infrastructure roll-out.

It's a winning hand, play it.