Dempsey promises more powers to ComReg

27 Apr 2006

UPDATE: Within days of BT, Smart and Magnet walking away from local loop unbundling (LLU) negotiations with Eircom, the Minister for Communications, Marine and Natural Resources Noel Dempsey TD has confirmed that he is to give the Commission for Communications Regulation (ComReg) concurrent competition law powers in an attempt to improve competition in the Irish broadband market.

Ireland’s poor showing on various global league tables, an LLU problem that has been unresolved since deregulation of the telecoms market in 1998 and lack of sufficient punitive powers for the regulator such as fining operators 10pc of revenue have long been a cause for concern in the industry.

Negotiations between Irish telecoms operators have been taking place since December 2004 and have centred on implementing automated processes for rival operators to offer broadband services using local loop unbundling (LLU) over Eircom’s network. This process would allow operators to install their own equipment in Eircom exchanges, allowing them to offer a wider range of services, such as broadband, to businesses and consumers instead of just reselling services that Eircom currently provides.

On Tuesday BT revealed that it was walking away from talks with Eircom. Smart and Magnet also walked away. It emerged this afternoon, however, that all the operators concerned had agreed to return to the table.

This morning Minister Dempsey agreed that regulation of the telecoms market “has proven to be less muscular”. He continued: “Obviously the appropriate regulatory framework is a significant factor in creating the right environment to foster competition and improve broadband numbers. Despite the best efforts of the regulator I am convinced that we haven’t the regulatory framework in place that will allow for the creation of competition in a speedy and timely manner,” said Minister Dempsey this morning.

“Nowhere is this more evident in the area of LLU. Full LLU is essential. It increases competition, innovation and choice on the DSL network for consumers. It is also a legal requirement under the EU regulatory framework. Without it Ireland will never reach its potential. Because of this the Government has given approval to the heads of legislation which gives enhanced powers to ComReg to allow it to enforce regulatory decisions with the aim of improving competition in the sector. I expect to publish this legislation within the next few months,” added the Minister.

“In the context of the current legislation I will bring forward proposals to give ComReg concurrent competition law powers in the telecoms sector similar to the UK model. This will allow ComReg to investigate and take action in issues such as abuse of dominance,” Minister Dempsey said.

IrelandOffline, a lobby group that has for a long time lobbied to resolve Ireland’s ongoing broadband woes, expressed mixed feelings on the move by Minister Dempsey and said the proof of the pudding will be in the eating.

Spokesman Damien Mulley commented: “Any additional powers or laws to fix the devastatingly bad telecoms market in Ireland is going to be welcomed by IrelandOffline. However, we feel that it’s like giving more powers to the keystone cops when what we really need is someone with the attitude of Dirty Harry.

“No fuss, no prevaricating, just decisive action,” Mulley said, adding that it was his opinion that ComReg’s existing powers are enough to improve the market greatly but they have yet to fully utilise them.”

The news was also welcomed by the Association of Licensed Telecoms Operators (ALTO), the organisation representing alternative telcos, albeit with a caveat that the powers are granted as soon as possible.

ALTO chairman Tom Hickey urged Minister Dempsey to bring forward the changes as a priority. “This will be a significant addition to ComReg’s ability to stamp out anti-competitive practice in the communications markets,” said Hickey. “For too long ComReg has been hampered by a lack of effective enforcement powers. This is a welcome addition to the Communications Bill and we would urge the Minister to bring it forward as a priority.

“These type of powers have been used to significant effect in the UK, where a new deal was agreed last year between BT and the regulator Ofcom. Recent difficulties with LLU in Ireland have brought the lack of powers on behalf of ComReg into focus,” Hickey said.

By John Kennedy