The hidden cost of the Information Age

The Clare Champion, Friday, March 6th, 1998

SIR, - It was with surprise and disappointment that I read in this weeks edition of the ‘Champion’ that Telecom Eireann are planning on charging full local call rates for householders who use the Internet as part of the “Information Age Town” development.

I think it is about time that Telecom put their cards on the table as regards their charge plans and the relative returns they will reap directly from the project. To date, the majority of households have been facilitated access to Voice Mail, Call Answering, Call Waiting resulting in most calls now being completed and the additional benefit of call-backs. The bottom line for Telecom is increased usage, increased revenue and increased profit.

Given this facility is perhaps secondary to the project, one might excuse the level of benefit accruing to Telecom. However, the Internet and its access is central to the success of the project and Telecom are now indicating their intent to profit directly from this exercise. Potential revenue across 4,500 households could exceed £2m. per year. How can full charges be justified? Will householders be willing to accept this additional burden and could it prove the death knell of the Information Age Project?

When I say burden, I do not exaggerate. Taking a very conservative estimate of access time at 3 hours per week of standard use (8 a.m. - 6 p.m.) and 7 hours reduced (evenings and weekends), the total cost to a household including VAT will come to £12.24 p.w. or £636.48 per year. This is a conservative figure, particularly if there are children in the house who will likely want to sign on more often during standard hours when they get home from school. How many households in Ennis will be able to afford, no less be willing to pay such a price for entry to the “Information Age”? When I say such costs may prove the death knell of the project, again I do not exaggerate.

How many households, when the reality of such charges hit their phone bills, will allow their children open-ended access to the Internet after school and at weekends? How many women working in the home will use the Internet for social interaction, communications and shopping? How many working people will sign on as a matter of course each evening to catch up on local events and do work related research? How many voluntary organisations will be able to afford to run their activities across the Ennis Internet? How many businesses can anticipate sufficient levels of commerce generated across the Internet to justify the undoubted investments they will have to make? Finally, what impact will these excessive costs have on reducing potential benefits, which might have accrued form the involvement of those who are disadvantaged in our community?

The issue of charges will be central to the potential success or otherwise of the Information Age project in Ennis. Experience in the US has proven a direct correlation between the costs of Internet access and its level of use. Many of the US Telco’s now offer free local access to the Internet and make their profits through subscriptions, business access and site advertising. In Ennis, Telecom will not be charging subscriptions, but the reality is that paying for subscriptions rather than call charges would prove financially more affordable and acceptable to most households. As regards implementing a reduced or no charge system, this will be very easy for Telecom. All households will be calling a standard number to gain Internet access, this can then be identified within the billing system as a separate charging structure, just as differentiating between your commonly used numbers today or the difference between local and long distance calls. In a sense, this could be a pilot for Telecom in implementing a similar system countrywide through TINET or Indigo.

I, like most people, in Ennis want to see this project succeed and am happy for Telecom to reap reasonable rewards from both a market research and profit perspective. However, the level of payback of their £15 m. investment likely to be achieved through Internet and voice tariffs is not acceptable, particularly when it puts the long term success of the project at risk. To date, this project has been a national PR bonanza for Telecom, but that is all it will ultimately achieve if the current tariff strategy as outlined in this week’s “Clare Champion” is not reviewed.

If free access is not feasible, then there should be a maximum weekly charge or a substantial unit discount on charges for Internet use. I challenge Telecom to make this review and to clarify their position.

Donal Crotty,
Barr na Coille,
Woodside,
Roslevan, Ennis.

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