Political power is very much like market power in that it permits the powerholder to indulge either his brutality or his flaccidity.Albert O Hirschman "Exit, Voice, and Loyalty" (1970)
Much of the story of European networking is the story of the gradual overpowering of the national phone company – often referred to in hushed tones as “The Incumbent” – by the sheer force of history. Not for nothing was AT&T in the States referred to as The Death Star; the level of control exerted by The Incumbent over their star systems – sorry, I mean the phone network – was exacting. The penalties for infringement did not often involve destroying planets, but from time to time businesses would be choked to death, or direct competitors enmeshed in red tape by means fair and foul.
Just as with many other matters in this book, I cannot claim to have an inside line to the main decision makers in our Incumbent, Telecom Éireann, then Eircom, and latterly Eir. I was only ten years old the year it was created, out of the ashes of the civil service’s Department of Posts & Telegraphs. Before my time in the ISP mines, I was a consumer of its goods and services, hardly ever bothering to write to it and ask it how it was. If we had been stuck together in an elevator I have to confess that the conversation between us would have been awkward and halting. When I joined the Comrades of the Packet-Based Revolution however, relations definitely chilled between Telecom Éireann and me. I think it could be said that we never really truly understood each other. It wasn’t it, it was me.
Star Wars analogies aside, the continual works-en-spannerating and general retardation of the Internet industry which was the implicit and explicit aim of The Incumbent for many years cannot be accounted for simply on the basis of commercial rivalry. After all, other commercial opposition who would happily gouge each other’s eyes out for an old Irish pound would band together just as fiercely to combat The Incumbent, purely on the basis that they provided the platform, the equipment, and the physical connections over which all of this was going on.“It is not enough to succeed. Others must fail.” Quoted by Gerard Irvine, “Antipanegyric for Tom Driberg,” [i.e., memorial service for Driberg] (8 December 1976). Via Wikipedia. Perhaps the best place to begin to understand the culture which led to Eircom cordially strangling most of the Irish Internet industry is with John Lawlor, now CEO of Scouts Ireland, who spent many years in the Department as it mutated into Telecom Éireann and finally Eir.
John Lawlor started in 1973 “as a technician trainee in what was the Post Office Engineering Branch.” When he joined, he met colleagues who had been in it since The EmergencyIreland’s quaint and beautifully indirect name for World War II. and who carried some of the same spirit of making do despite constrained circumstances. In fact, on the first day that John turned up, “we got a speech from our inspector who was running [..] the induction and he said, ’Joining the Post Office is like joining the Army, except we’re all officers.’”
At that stage they referred to customers as subscribers; an interesting nuance is the question of terminology over who’s paying the money. In various organisations I have worked in they have been called “customers”, where the “customers” had no choice of where to place their custom; “users” where there was nothing to use; and “subscribers” where they not in fact subscribed to anything the other party had to offer. (In the case of the Department of Posts & Telegraphs, the term “subscribers” implicitly had within it the notion of recurring revenue; at this stage, this revenue was a non-trivial contribution to GDP, and probably accounted for the zealotry of the support that it received from its political masters.)Note that the contribution to GDP continued to grow - 3% in the year 2000, according to this ComReg report.
In any event, John’s career path was traditional in many respects: “straight out of school into Kevin StreetSince 1887, the science faculty of the Dublin Institute of Technology. and trained as a technician and learned about magnetism and electricity”. There was engineering in his family background; his dad was in the Signals Corp in the ArmyNow the Communications & Information Services Corps.} And all that sort of stuff. There would have been an attempt to defend the old switch-network [which] was quite entrenched. And even from an investment point of view, [this viewpoint] directed things that happened: “Let’s get the best we can out of the copper” instead of putting fibre in.
It was clearly all about sweating the asset, although the full expression of that view was not yet clear in the 1970s.Of course, this attitude maximised short-term profits… well, actually, it’s far from clear it did that. (But whatever else it did, it certainly made the transition period a lot slower and more painful than it otherwise have been.)
In fact, the deeply physical nature of the business in the 1970’s was the source of a lot of problems; John was first trained as a jointer,
… connecting these cables [which is] a bit of an art in itself. When polythene first came it was a big deal. I can remember all that. Then Ireland’s telephone network got into an awful mess in the late ‘70s. It took 18 months to get a telephone.
Part of the reason for that was the continual lack of money that Ireland had suffered under for decades; there simply wasn’t the money to do anything approaching a rational design. Another part was the fact that although there were records of which phone lines went where,
[…] it was like Bob Cratchit, in Dickens’ time. It was handwritten. Everything was handwritten. We probably don’t know how much we know. Actually managing that [information], every exchange would have records for its connections, for its frames. Every time we made a cross-connect, there were records made for that and that had to go to Central Records Area. But there were a lot of stuff that we didn’t know about. I suspect because a lot of stuff was paper-based, and a lot of things were distributed, it would require some detective work to pull together a comprehensive view of it. So any computerisation of those records, that would only have happened in the late ‘80s.
The continual penny-pinching had produced a network where the doctor and the undertaker shared a line, because the Department of Posts & Telegraphs relied on the fact that they generally wouldn’t want to talk at the same time to re-use the same piece of cable to connect both houses. (Clearly inconvenient when direct communications between the Doctor and the undertaker would have made things more efficient.) Finally, there was also a class angle:
There was an attitude that telephones were for a certain class, they weren’t for everybody. So really, the majority of people made do with public telephones. Again, we wouldn’t have had a telephone at home until the late ‘70s. So it wasn’t something that you typically had. There wouldn’t have been one on our street! Nobody on our street would have had one. If you wanted to make a call, you’d go to a call-box.
But then a societal change and a technical change went hand-in-hand (funny how that happens) and the PCM – Pulse Code Modulation – revolution came. John was sent on a training course, run, in classic sprendthrift fashion, out of a Portakabin in Tallaght. With that technology you could:
…put thirty voice channels on a single pair [i.e. a single telephone line]. And they said, ’You clearly weren’t listening on the course, anyway!’ These were good guys, who knew their stuff technically. The acceptance of their world was changing. And I’d see that as a really important – that idea of PCM and time-division multiplexingJust a fancy way of saying you can chop the audio of a call into slices so small you can run many of them over the same line at the same time, saving resources. made a huge, huge difference.
Indeed, at one point, the Irish telecomms network was actually substantially ahead of the British one; we made our major investment in about 1982/83, buying “Stored-Processor Control Exchanges from Ericsson and Alcatel”, a substantial leap of technology. Of course, this led to complacency:
But part of the problem was that a lot of the development was politically driven or politically motivated so the politicians got to believe we had the best little digital network in Europe. And once they believed that, they thought that was done. So they stopped investing so we had no investment going on again from the late-‘80s into the 1990s.
Perhaps predictably, the increased controllability and automatic operation capabilities of the new equipment did not in fact lead to increased efficiency. No indeed:
We still had the same staffing levels in the exchanges so we used to be sitting around, “Well, what’ll we do?” Truthfully, we shouldn’t have been in there at all. The thing that should have happened was that it should have been sealed and controlled somewhere else. But the culture hadn’t moved so, we would be having our tea in the place, which really wasn’t a good idea!
Speaking of the civil service, eventually John got an opportunity to go to college through one of those obscure/quaint civil service programmes that he accidentally happened across. Being future-minded, he did Computer Science in UCD for four years full-time, from 1987 to 1991, with his salary paid: the deal being, to come back with an Honours degree and spread his new-found expertise throughout the organisation. It was a great time to do it, not only because the threat of nuclear holocaust receded somewhat during the degree (started in 1987 with the iron curtain; ripped out the curtain by 1991), but also because computing was feeling the first effects of the networks exploding in size around the globe, combined with the rapid progression of availability of decent machines.
Actually, my technical background was very useful because I got my Electriconics as a gimme […] that helped enormously. I had done a bit of assembly before. The training was actually really excellent. There was a big training ethos in the Post Office, which actually was the same as the British Post Office. Identical. It carried on to Telecom Éireann. They would spend a fortune training you. I spent a half year, full time, training on the Eircsson switch. I think it was a 24 week course, full time. That was not unusual at the time.All of you looking enviously at the “four years to do a degree with salary paid” benefit are hopefully not saying “Gosh, I wish he didn’t have that” (and implicitly saying “I wish no-one had that”), but instead saying “Gosh, I wish everyone had that”. Investment in people by organizations is valuable in-and-of itself, and that part of modern capitalism which consists of bemoaning the quality of the applicants while simultaneously starving the state of the resources required to improve the quality of the applicants seems a little … short-sighted.
One degree of separation
Back to Telecom Éireann. Somewhat bizarrely, their IT Department had no administrative way to recruit a graduate, so John was a bit of an anomaly for them. He went out to their Data Processing Centre in Dundrum a few times, which - perhaps not coincidentally - resembled the Central Mental Hospital nearby. It had - also not coincidentally - a culture and features of working similar to the old mainframe and batch processing days: programming with PL1, night shifts, and massive overtime. It wasn’t for John. Instead, he asked if he could go into Data Communications rather than Data Processing, because of his background. In one of those interesting, career-changing mistakes, they actually sent him to Data Communications Marketing rather than Data Communications Technical:
When I got into Data Comms Marketing in 1991, it looked like great fun! When I arrived, they gave me ISDN. It had fallen out of favour a little bit - I was the new kid, and as a new HEO,Higher Executive Officer. I was given ISDN. Now at that stage, the organization was a completely engineering-led organisation and they went off to the Board and said, “We want to spend four million” and somebody on the Board said, “Where’s your business case” and they said, “Business case? We don’t do business cases!”
(I suspect that line will seem familiar to some consumers of Telecom Éireann products.)
The Head of Networks got on to my boss and said, “You need a business case for this.”
Truthfully, I had never written anything like a business case, but I knew how to find out how to do it. So, I invented a business case for ISDN. It meant modelling the traffic and sometimes just having a guess. I learned a lot from it.
I was very lucky to have a boss who allowed me to go and present to the Board with this business case, so I became associated with the product. Then there was a EURO-ISDN project to bring in harmonised ISDN across 24 operators in Europe, which was a really smart thing to do. It put Europe a little bit ahead of the States at that time [on Switched 64k]. I got involved in some of the European committees on the approach to marketing ISDN. Then we got a quarter of a million out of the EU to market here.
We had booklets and brochures and we had a demo-centre and we did a road-show. We encountered a lot of opposition, mostly internally. We knew the market was there. We knew this was going to bring data to SMEs for the first time. We got a lot of interest in that. There were people trying to protect what was called the DASNET network, which were the fixed 64k lines. They were the leased lines that say, AIB, or [similar] would have. They’d say, “If you introduce that switched 64k it is going to destroy DASNET.” Then, [when we established it wouldn’t], we got “It couldn’t possibly be the same quality as the DASNET line!” It was back to this idea of the voice telephony [being primary]. So there was always this resistance to new products. I remember somebody saying to me, whether they were right or not, but they said “Telecom Éireann should never introduce new stuff. We should always be a follower.” That was deep in the philosophy.
Now, that’s actually an interesting, and principled, philosophical position. TE should never be first because it’s overwhelming necessity is to be reliable - you’re got to be able to pick up the phone and get a dial tone, and have it work every time, first time. Changing things rapidly is simply anaethema to that.There’s lots of evidence for this point of view, and indeed in my professional life I skirt the narrow line between change and stasis for the benefit of customers. Well, if we can’t change things rapidly, but we do acknowledge that things need to change from time to time - every decade or so, say - then TE should adopt things which have been shown to work well elsewhere, but nothing new. Or at least, nothing unproven.Despite that, apparently one of TE’s “non-following” successes was the introduction of chip-and-pin smart-cards for callboxes.
The surprising thing is for how long in the history of Irish telecommunications this actually worked - which is to say, for decades, until about the mid-90s. In the Ireland On-line article, we show how Telecom Éireann had the opportunity to do something serious about the Internet early on, and didn’t. John has a story about how it also had an opportunity to do something about ISDN, and didn’t:
In ’92 I was doing a promo down at the IMI Conference in Killarney. Albert Reynolds was the TaoiseachIrish Prime Minister (lit. ‘chieftain’ IIRC.) at that stage. He was claiming credit for organising the investment in the telecoms network. Now, I don’t really know whether he was due that, but he certainly claimed it. As a demo at that conference, we had a couple of Tandburg video phones and I organised what was called VN-2: the French version of ISDN software over an ordinary telecoms switch. We set up a video phone call from him (the Taoiseach) to Dublin. As far as I know, that was the first ever video phone call in Ireland. It would have been the IMI Conference at Killarney in 1992. A relatively small bit of telecoms history, but there it is.
John pulled a similar trick in the RDS later in 1993:
Then there was a major telecomms exhibition in Ireland, in the RDS, in 1993. Communications ‘93 I think it was, and again we hadn’t got our own ISDN [software] running at this stage. We were supposed to have it, but we didn’t have it. We used the French VN-2 software instead. I remember talking to the sales director from the company providing it and I said, “Look, give the VN-2 switch and I’ll give you guys the credit on the stand,” and he said, “I don’t want the credit! I want you to put it in a black sack in case it goes wrong!”
But it didn’t go wrong:
We put it up on big screens. My boss, the head of Corporate Markets at the time, came to me and he said, “You’re to put on a bit of a show here.” There was a woman from AT&T, I think McBridePossibly this McBride, despite the slight non-overlap in dates. was her name - I’m trying to remember what her first name was - she gave me a couple of numbers in the States. I just took a chance on dialling them up. I couldn’t believe it. The next thing, up on the screen, was a video conference centre in Miami. It just blew them away!
It was, if you’ll pardon the reference, intended to be a game-changer, a new hope. Though although John didn’t realise it at the time, it was doomed just as surely as any other fixed application on top of telephony was. Eventually when the ability to pass packets became fast enough, there was no need for ISDN video conferencing, since you could do it all over an Internet connection anyway, and you could also use the net connection for lots of other things (even at the same time!). With ISDN video conferencing, you had just that. No ability to use different applications. (Not even Skype.)
The Farce Awakens
However, as John opines, in some way, ISDN probably played a part in awakening the market to the additional, future possibilities of communications networks:
I think as a market, ISDN really would have run well from the late ‘80s into ’94, or about 95. It really needed to move over then with products that allowed a broadband of some kind or an internet service - that was when I started first to hear about the Internet. But I think ISDN played an important part in clearing the path for people to start to demand data or demand products that could run over data – video, we experimented with a group for fax, it never really took off. The product was too late, you know? The video calling certainly excited people, but we didn’t really have an email product. We had something called X/400 which was a horrible thing, remember that? I do, as it happens. Yeeuch.
But Eircom really did go through gyrations as those informed enough to read the future attempted to change the company, and those happily ignorant of it resisted that change:
I can remember at one stage we were pushing to buy a TV network in Manchester. We were trying to say, “First of all, we were going to make a lot of money doing it.” And we would have. We would have avoided any concern about violating monopoly in Ireland. It was bigger than our entire network! And we would have learned lots of stuff, you can see know. That was something that we suggested back in ‘94/’95. I think it would have been a pretty useful asset for any company to have had.
But there was extreme resistance. I felt there was an invisible sign over our building that said “Every order takes us by surprise.” We didn’t tend to try and meet the market and the big worry we had, when I provisionally came with ideas about sales reps and putting guys out in the field – and I had moved away from the technical side – I can remember at a board meeting a guy complaining that this was going to cause a wave of demand! And he was cautioning the chief executive!
And in fairness to Alfie Kane,CEO of Telecom Eireann/Eircom at the time. Alfie Kane said, “Well, I hope so!” The world had moved on but there was still a fierce tradition in TE. I remember, I used to manage a meeting with Cathal McGee, probably 1999, around then. We used to have quarterly meetings with managers and he generally picked on me because he felt like I’d say something.
And he said, “Well what do you think about such-and-such a competition issue?” I said, “Well, look, I believe that we were capable of doing far more damage to our own business than competitors were.” I think that was right, but it was the wrong thing to say! I really had a sense that I had just made a career-limiting move. I left Eircom not so very long after that.
I really felt, “This is not an organisation where it’s safe to say, ‘I have an idea.’”” And maybe that’s the kind of organisation they wanted to have but when I left it, it had zero debt. It got itself up to four billion in debt and it certainly wasn’t four-billion better off as a telecoms company! The four billion was just loans, bonds created and all sorts of things. But they also sold off all of their infrastructure. They don’t own any buildings. They sold the mast sites which they owned, which was unbelievably good infrastructure. Eircom doesn’t own any of that now.
The litany of sales of the same company, continued asset stripping, and then re-sale later on to someone else who can see just a little speck more of meat left on the carcass is not an inspiring series. It does remind you, as John says, that the only people left signed to Eircom as little old ladies who hardly make phone calls at all. The customer loyalty either flows from ignorance, or some misguided sense of … patriotism? … that even John had to let go of:
I set fire to our house with the dishwasher! (Apparently the most dangerous appliance in the house is the dishwasher. I learned that afterwards.) I was off out one Saturday morning. I stuck the dishwasher on, as you do, before I left the house. I was about forty five minutes outside when I had a call from the neighbour saying that the house was on fire. Luckily, there was nobody in it but the house was badly damaged so we were out of it for about six months. I got on to the gas, no problem. They gave us a credit note. The ESB, no problem, they gave us a credit note. Then I got on to Eircom. I said, “Blah di blah di blah.” “Oh yeah, we see you’ve no traffic on.” I says, “Look, I’m going to be out till Christmas. I need a credit note.” “Oh we can’t do that.” “No, no. You don’t understand. I had a fire in my house - could you just help me out here and I’ll be back with a lot of custom in December when we get the house back.” “No, no.” “Well look, can I talk to your supervisor?” Supervisor comes on, “Very sorry, Mr. Lawlor. We can’t help you.” He said no. So I say, “Look, here’s the way it is. I happen to know a bit about your business.” I didn’t do anything more than that. I said “You’re losing customers like me by the handful. I’m stupid enough to be putting service with you for no other reason than out of some misplaced loyalty. I can get service from UPC or BT or loads of people. Why am I putting up with this at all?” Anyway, they were supposed to ring me back, and didn’t. So I transferred my business over to UPC, got much better broadband and phone and they only problem I have is that I watch crappy TV now, that I never used to watch because I never had cable TV. But they actually drove me away as a customer. I tried stupidly hard to stay with them, and I couldn’t. I had to give up. Then, the icing on the cake: having left them, with my closing bill, they sent me a credit note. You couldn’t make it up.
As a final note, I am reminded of the story that Alex French tells of Ross Chandler, after Ross’s move to Eircom. Alex was complaining of some particularly spiteful piece of obstructionism that Eircom had come up with saying “That must have come from the Department of Evil Planning!” (or words to that effect). Ross paused and in a definitive tone said “That would imply we had a Department of Planning.”
It was an unanswerable comeback.
We’ve spent a lot of time talking about infrastructure organisations, but the web was important too, even back then.