Government to intervene in broadband price row


16 Sep 2003

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Minister for Communications, Marine and Natural Resources, Dermot Ahern TD, told the Global Leaders Forum in Rome that in clear conditions of market failure or of sluggish market responsiveness it is perfectly legitimate for Government to intervene. In this way, he said, he aims to boost Irish broadband access by establishing cheaper access points-to-phone exchanges that would end the control exerted by Eircom.

Addressing the forum, which was also attended by Italian president Silvio Berlusconi, Minister Ahern said the establishment of independent co-location facilities or community broadband exchanges (CBE) beside existing facilities would play a major role in driving internet competition in the Irish marketplace.

The news is expected to be a received as a bombshell to local incumbent telecom player Eircom, already ensconced in a legal battle against the Commission for Communications Regulation over efforts by the regulator to drive down DSL rental costs Eircom charges alternative licensed operators.

“I am presently considering the establishment of independent co-location facilities separate from the incumbent telephone exchanges. These would be introduced on a phased basis,” Ahern told the Global Leaders Forum.

The new exchanges, he said, would give telecom companies unrestricted access to the local loop at a price set by the regulator and would obviate the need for each operator to establish their own points of presence as well as rent space in the incumbent’s exchange.

“In a telecoms market without real cross-platform competition and where local loop unbundling has not sufficiently delivered, I am prepared to step in and assist the market. The bottom line is this – incumbent focus on shareholders, governments and ministers must focus on citizens and the broader economic picture. To that end intervention is justified,” Minister Ahern insisted.

Ahern said he welcomed recent moves by Eircom and Esat BT to cut connection fees for DSL broadband but stress that monthly DSL broadband fees are still to high.

“As full market liberalisation becomes the norm across Europe – governments between now and 2010 must also be prepared to intervene at a high level to ensure the regulatory environment is also responsive to broader national strategic goals.”

By John Kennedy