Eircom wins High Court case against ComReg

1 Aug 2005

The evolution of fully unbundled broadband products will be held back at least a year claim telecoms industry insiders following the ruling by the High Court today that the Commission for Communications Regulation (ComReg) cannot issue enforcement decisions to Eircom until after appeals have been heard.

The High Court held ComReg could not use an enforcement order to compel Eircom to implement the decision in January that Eircom was in the process of appealing to an appeal panel.

Specifically, the court indicated ComReg cannot unilaterally curtail Eircom’s right to appeal. It was ruled that the continuation of ComReg’s actions would have “obliterated” the effectiveness of the regulations. It was also decided that Eircom did not seek to delay the appeals process.

The court said the Minister for Communications should have given more serious consideration to Eircom’s repeated request for the establishment of the appeals panel and that ComReg’s direction imposed new requirements on Eircom. The court also directed ComReg to pay Eircom’s costs.

The decision has prompted outrage amongst telecoms operators seeking to provide broadband services and has led to fresh calls for the Government to provide ComReg with the regulatory powers to enforce its decisions. Under the original Communications Bill, ComReg would have had the power to fine an operator up to 10pc of its annual turnover. At present, the maximum fine ComReg can issue is €3,000 and its directives can be challenged in court.

Telecom companies last year banded together and issued a market requirement document to ComReg setting out what needed to be done in terms of creating a mass-market broadband product through local loop unbundling (LLU).

BT Ireland product director Peter Evans explained that at present operators are unable to automatically migrate their customers who are on a bitstream line – a wholesale product provided to operators by Eircom – to a newly unbundled phone line. Instead the only way this can be achieved is by getting customers to disconnect for several weeks before placing a LLU order or otherwise must opt for a new telephone number.

When ComReg issued Eircom with a directive notice last January to enable automatic migration from bitstream to LLU Eircom appealed on the basis that such a service would cost millions to implement. The case went to the High Court.

In the meantime, a Regulatory Appeals Panel was established to avoid lengthy legal processes around issues such as broadband and mobile virtual network operators.

However, according to Evans, it could be a year before the present impasse over bitstream/LLU migration could be heard by the panel. “Ultimately the High Court ruled Eircom must have a right to appeal and it was no fault of the company that there wasn’t an appeals committee up and running when the issue came to light. While there is now a appeals panel in existence it could be a year before anything gets done.”

He added: “Basically this knocks our plans back. We have no choice but to look at bitstream and wholesale products rather than build our own services. For the consumer that means little innovation or price-quality improvements for the near future. ComReg needs to be given powers to ensure its decisions are followed without having to go to court every time.”

Evans’ comments were echoed by ALTO, the association representing alternative operators in the Irish communications market. Tom Hickey, the chairman of ALTO, called for a more streamlined approach to the hearing of appeals. “Today’s High Court decision will mean further delay for competition in broadband services ”, he said. “Unbundling has already been held up for far too long. It has been a legal requirement since 2001, however the process has been frustrated at every turn by Eircom. ComReg has had to intervene to allow competition develop, however it is powerless if its decisions cannot be enforced.

“This court action only relates to a narrow legal argument. However, the consequence of today’s decision is that Eircom can appeal every decision in order to cause delays. The Minister for Communications must fix this loophole by introducing a streamlined means for the hearing of appeals by the appeals panel,” Hickey said.

However, while the industry and lobbyists vented their frustration, Eircom commercial director David McRedmond expressed the incumbent’s satisfaction with the decision. He said: “Eircom has been thoroughly vindicated by today’s judgement. All we seek is good and fair regulation, so that consumers can benefit from a strong and truly competitive telecoms market. The right of appeal to an independent appeals panel is imperative and we believe this right has been secured today. “

By John Kennedy