Let the market rule, says ComReg

13 May 2004

Normally caught in the no man’s land between incumbent market forces and a private sector anxious for 21st century services, the Commission for Communications Regulation (ComReg) also has a little known responsibility for identifying the market impact of ‘hot’ new technologies such as RFID, WiMax and WMANs

The 120-strong organisation that is ComReg normally occupies the headlines of this nation’s newspapers as something of a victim. Usually it is castigated by incumbent operators such as Eircom and An Post (as well as their respective foes in the private sector that are anxious for market freedom) for not being able to move fast enough in terms of deregulation.

However, apart from addressing postal communications laws that date back to the 18th century, ComReg is in fact a force responsible for enabling the introduction of new technologies and services in the marketplace that will impact on our personal and professional lives for the next 20 to 50 years.

These technologies range from the advent of 2G communications such as text messaging in the past five years and the imminent arrival of 3G mobile services this year, to the introduction of next-generation broadband services such as wireless metropolitan area networks (WMANs) and Wimax networks, capable of a range of up to about 30 miles with data transfer speeds of up to 70Mbps.

Unknown to even its harshest critics, one of ComReg’s less trumpeted roles is that of raising awareness of new and emerging technologies. This work is carried out under its Forward-looking Programme (FLP), which monitors innovative technologies and analyses how they may impact on the future shape of the Irish telecoms market.

In 2003, a steering panel of senior external advisers, chaired by ComReg commissioner Isolde Goggin and including the chief scientist of Nortel Networks, Philip Hargrave, was formed to guide the FLP. Other members of the steering panel include Michael Donohoe, head of emerging technologies at Eircom, Mike Carr, director of enterprise venturing at BT Exact, and Tim Kelly, head of strategy and policy, International Telecommunications Union.

“Our job is to facilitate market development by identifying the right technologies that could survive commercially in the Irish market and this means breaking through a lot of hype surrounding new technologies,” explains Gary Healy, manager of ComReg’s market development department. “We are trying to gauge the impact on the market of new technologies such as WMANs and radio frequency ID (RFID) and ensure that spectrum on the island, which is scarce, is correctly managed. Our core concern is: ‘Is there a business case for this?’

“We let people come in and run tests with different devices and services. It helps us to ascertain the commercial case for these products,” Healy says, adding that making the correct decisions helps save both telecom companies and the economy a lot of time and trouble. One only has to think of the €160bn 3G licence debacle that shook Europe as well as the local market failure of cable broadband services to get Healy’s point.

Among the technologies currently being evaluated by the FLP are:
• Ultra wide band – an alternative radio technology for short range, high-speed broadband;
• Wireless metropolitan area networks – wireless access networks for supplying broadband in an urban area, such as Wimax;
• Voice-over IP (VoIP) – using internet technology to enable lower cost voice services compared to traditional copper wires – which providers such as Smart Telecom and Ryanair Telecom are hoping to introduce this year in Ireland.

Healy’s colleague in the market development group, technology analyst Jonathan Evans, adds: “Other wireless technologies on the horizon to be introduced in Ireland later this year include smart antennas, which mobile and wireless operators will use to add intelligence to cells on their network. A smart antenna can be used to steer broadband allocation to certain devices electronically. For example, if a user is downloading a movie from the internet and other users in his area aren’t, then the antenna intelligently allocates all available broadband to that user.”

Evans continues: “In terms of technologies such as Wimax, we expect to see it arrive in the Irish market at the end of this year. It could be used in small towns and villages to spread broadband out over 15-20km on average. Other technologies in our sights include RFID that will eventually replace the barcode and feature strongly in retail and warehouse applications. However, it will bring civil liberties and data protection issues to the forefront and that needs to be sorted out first. 2004 could also be a turning point year for VoIP, which will be aided strongly by the take up of DSL.”

Healy interjects: “Out job is still to break through the hype that surrounds these technologies. There are a lot of vested interests out there and we need to ensure that technologies that are encouraged in Ireland are commercially viable. A classic example is 3G. We didn’t buy into the hype that drove European governments into charging billions of euros per licence.”

When ComReg opened its licensing process in 2002, it bucked the European trend by charging no more than €100m for the respective 3G licences, enraging Finance Minister Charlie McCreevy TD at the time.

Says Healy: “We can only allow technologies into the marketplace if the business case is there. We have no problem allowing companies to test technologies in the market, but there are huge margins for error if you consider 3G and cable. Look at VoIP – it’s been around for almost 10 years but it’s only now that people have DSL that it has any chance of succeeding. Wireless local area networks are another example. They were originally thought of as a solution to rural broadband issues. Now it is clear that they are having more of an urban impact.

“Our core concern is that there is a business case for things such as 3G and VoIP. If there is, then let the market rule.”

Jonathan Evans, technology analyst, and Gary Healy, head of market development in ComReg