No time for crossed lines as ComReg is thrust onto the European stage

13 Mar 2017

Image: View Apart/Shutterstock

Regulation – much like death and taxes – is inevitable and in protecting citizens and industry, ComReg will have to change its game, writes John Kennedy.

Whether it likes it or not, Ireland’s telecoms regulator ComReg has some tough decisions ahead – and the whole world will be watching.

The EU data roaming debate has put the diminutive regulator in the spotlight. What happens here in Ireland will have ramifications for the rest of Europe on the matter of EU-wide roaming.

‘ComReg will have to help people understand what is really happening on the ground and in their lives’

It is an ironic time to be in telecoms, if you think about it. Every facet of economy and society relies on the sinews of broadband and mobile networks to get stuff done. People need the internet to live, to work, to exist.

And yet, the telecoms industry has never been more entrenched and threatened. It has built the networks for ruthless, savvy and speedy internet giants to create services that threaten to make traditional revenue generators such as voice calls and SMS almost extinct.

Cocksure of its potency, Google even decided to build fibre networks around cities in the US such as Kansas. When it realised the scale and complexity involved, it ran away like a scalded cat.

And yet, telecoms companies will need to man the shovels and build the networks. The pressure is on to go faster and faster, roll out the highest speeds, get to 4.5G and then 5G.

And someone will have to pay for it.

Europe wants a telecoms utopia

At the start of February, Ireland’s Communications Minister Denis Naughten, TD, welcomed the EU deal on ‘Roam Like at Home’, where Irish and EU consumers would be able to use their mobile devices in other EU countries at domestic rates, subject to fair use policy.

By the end of the month, it emerged that mobile operator Three was embarking on its own version of the new EU roaming rules, changing the language so that ‘all you can eat’ services would be distinctly separate from the EU data allowance.

The cat is amongst the pigeons and ComReg will have to investigate.

The situation propels ComReg from a quiet, almost academic existence, to the central battlefield of European telecoms.

Much like the Office of the Data Protection Commissioner before it, this puts Ireland’s regulator on the international stage.

Ireland’s relationship with telecoms and regulation is a funny beast. It would shock most millennials today to discover that in 1998, Ireland had the most advanced telecoms network in Europe at the time. Telecom Éireann (the old name for Eir) was a public sector giant that employed between 15,000 and 20,000 people.

IPOs were in vogue in 1999. The internet was a hungry pup; telecoms markets across Europe were being deregulated and Telecom Éireann rebranded as Eircom, going to the public markets as a private business.

It was a disaster; the IPO did not go so well and many ordinary Irish citizens lost their life savings on shares. Coupled with the dot-com bust, poor market sentiment following the tragic events of 9/11, and a global telecoms and tech industry correction, anything digital at the time was tarred with the same brush.

Added to this mix were the 3G licence auctions, where European telecoms companies threw €160bn into the auctions, only to ask for the money back. The EU refused.

Broadband was in its infancy too. DSL was only just arriving and regulators such as ComReg soon found themselves as referees in a battle between former incumbent players and new arrivals, who listened to the call to invest and duly did so. And they watched their money go down the drain.

In Ireland, what followed was a situation that carries to this day and pretty much explains why the Government is embarking on a €500m to €1bn intervention called the National Broadband Plan, to bring broadband to close to 1m premises on the wrong side of the digital divide into the modern world.

Constant legal toing and froing, expensive court battles and a lack of political will meant that the digital revolution in Ireland only really happened in the big cities and towns. Outside the walls and gates, you lived beyond the Pale as far as operators were concerned.

In this time, ComReg was a constant player in the debate. Its critics sometimes portrayed it as a toothless poodle, battling shrewd, asset-stripping forces with deeper pockets for legal fees. But if you look closely, it took on its own crusades too, such as efforts to bring in mobile virtual network operators, and create transparency around broadband prices and availability.

As critical as I have been of ComReg down through the years, the regulator, with its various chairs – from Etain Doyle and John Doherty to Isolde Goggin and today’s chairman Gerry Fahy – has been diligent to the point of being painstaking in its approaches, and has only been hampered by its willingness to do everything by the book.

But now the world is watching and, not only that, Irish consumers are invested in the ensuing drama. And if the consumers are interested, then so too are the politicians. No pressure.

Not only that, but according to the senior civil servants drawing up the National Broadband Plan, ComReg will also play a key role in its success, ensuring that whoever wins provides fair and equal access on a wholesale basis across 96pc of Ireland’s land mass and 100,000km of road.

If the plan indeed kicks off in June, or later in the year, ComReg will be the focal point of many people’s questions, concerns and frustrations.

No more speaking in tongues

The key here, ironically enough, is communication. ComReg, the regulator for communications in Ireland, needs to communicate.

This means switching from the legalese and jargon of the past that was fashioned to keep telcos in their places, to helping people understand what is really happening on the ground and in their lives.

The first thing to understand about Ireland’s telecoms industry is that there are no good or bad guys; there are only people trying to do their jobs, earn a wage and deliver a return on their investment.

The difficulty, as best explained recently by Conal Henry, is that telecoms operators function in a landscape of often diminishing returns. Henry is CEO of Enet, one of the three companies shortlisted for the National Broadband Plan (Eir and Siro are the other competitors).

Originally from the energy industry, Henry has spent the last 11 years building Enet to manage 94 fibre rings around Irish towns and cities as well as a 100,000km fibre ring in Dublin. As such, he brings a fresh perspective and isn’t afraid to mince his words or tell it as he sees it.

In its present form, telecoms in Ireland – and anywhere else for that matter – is a dog-eat-dog business.

“There are a couple of truisms in telecoms that drive the way people behave and think. One of those is that there is really no inflation in telecoms. In 10 years, the amount of money that Irish consumers will spend on telecoms won’t radically change. So that means if you are going to make money in telecoms, you are going to have to take it off somebody else. And that’s why you see so much defensive activity in telecoms,” Henry said.

The reality is that telecoms, though cash-generative and asset-rich, is relatively static when it comes to increasing returns. And that is especially hard in a small country like Ireland. Operators are trying to eke new revenues by luring customers away from rivals, offering speed increases, call bundles and even extra TV channels.

The companies must build the networks, all the while cognisant that consumers have no intention of paying any more in a decade than what they pay for services today.

It explains why operators such as Three are unwilling to be crippled by new EU regulations, no matter how well-meaning the lawmakers are for a pan-European telecoms utopia.

And into this must stride ComReg.

The battle ahead isn’t about teeth or legal muscle. It is about clear, open communication and giving people an understanding of what is happening.

You can already see ComReg reshaping itself for this reality – its website recently divided into business and consumer sections. But it must take a leaf from its UK counterpart Ofcom, which has very similar battles on its hands in terms of regulating fibre roll-out, for example.

One of the things that Ofcom does very well is communication, and it even manages to do so in a way that makes telecoms understandable to the masses, sometimes even fun and engaging.

Late last year, Ofcom hired former RTÉ managing director of news and deputy director general, Kevin Bakhurst, to take on the role of content group director.

While ComReg may not have the same resources as Ofcom, the reality is that as consumers and businesses come to depend on their digital lifelines, to support everything from entertainment to health and livelihoods, the language must change.

ComReg needs to communicate and educate a population that will clamour for these digital lifelines at affordable prices.

Like the Data Protection Commissioner before it, conscious of its role in defending people in a data-centric world, ComReg is also about to be thrust onto the international stage.

And it must be a ComReg that is there for the people.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years