Legal challenges will delay comms progress

6 Oct 2005

The Commission for Communications Regulation (ComReg) has warned that future legal challenges may delay key decisions and will in turn impact progress in the Irish communications market. This is particularly worrying considering broadband in Ireland is approaching a mere 200,000 subscribers, some 300,000 behind former Communications Minister Dermot Ahern’s 2005 target for this year.

At a briefing yesterday outlining the regulator’s strategy up until 2007 the regulator reiterated its goals of promoting competition, promoting the interests of users in the community, ensuring efficient management of radio frequency and telecoms infrastructure and the promotion of the development of the postal sector and in particular the availability of a universal postal service. Under the Communications Regulation Act 2002, ComReg is mandated to produce a strategy statement every two years.

In a call for responses to its draft strategy statements the regulator received 18 responses from industry bodies like ALTO as well as operators 3, BT, Eircom, Irish Broadband, NTL, O2, RTE and Vodafone and organisations such as Forfas, IBEC and Ireland Offline.

Going forward, ComReg said it recognises the need for regulatory impact analyses on key decisions it makes for the market.

However, it warned that currently, legal challenges may delay key decisions and may have an impact on the market. ComReg chairperson Isolde Goggin said: “We are concerned about the time it is taking to get these issues resolved. Clearly the processes need to be looked at.”

In the past week, the regulatory body has been reeling from the loss of its case against mobile operator 3. In a landmark ruling, the Electronic Communications Appeals Panel (ECAP) found in favour of 3G network operator 3 Ireland and against ComReg in a dispute over the mobile operator’s level of market dominance.

A month earlier, incumbent operator Eircom won its High Court case against ComReg over its directive to Eircom on local loop unbundling (LLU) on the basis that it could not curtail Eircom’s right to appeal its decisions. However, in recent weeks it emerged that ComReg and Eircom came to an agreement whereby Eircom will issue a market requirement determination (MRD) on 24 October.

Commissioner John Doherty said he would be hoping Eircom’s request for the market would be reasonable. “When it issues the MRD we will decide if Eircom is correct in its request. LLU is a key regulatory priority for ComReg. We need to get a seamless LLU system in place that could speed up LLU. That is two and a half weeks away and we would hope that the industry’s needs in terms of automation and wholesale numbering will be met and it will be fit for the purpose of furthering the progress of LLU in Ireland.

ComReg’s strategy document makes the claim that Ireland has seen one of the highest levels of growth in broadband take-up over the past 12 months. However, it also admits the PC penetration level in Ireland, while rising, also gives rise to concern as levels here fall anywhere between 10pc and 30pc below countries with the highest levels of internet penetration. According to CSO figures, PC penetration in Ireland stands at 46.2pc while internet penetration stands at 38.2pc.

ComReg also pointed out that the proliferation of single unit housing in rural areas has had an impact on the electronic communications sector, as the cost to connect these houses to the access network can be higher than in urban areas.

On the subject of issues such as line failure and distances from the exchange, ComReg says it is relying on advances in ADSL technology, which are increasing the reach from DSL-enabled exchanges. It acknowledged that further investment in existing infrastructure will be necessary to meet growing demand for bandwidth.

Questioned on Ireland’s low level of broadband penetration, Doherty acknowledged that Ireland is nearing 200,000 subscribers. Questioned again on the fact that in its last quarterly report ISDN line uptake went up by as much as 2pc, he said: “It is certainly interesting that ISDN is experiencing an upsurge in demand but I think there is still a lot to be done in terms of mentoring people on what broadband and DSL is about. We can’t take our foot off the problems with broadband supply, but there is a parallel demand to educate people and inform them of what broadband can do for them.”

Commissioner Mike Byrne backed up Doherty by saying that while prices have dropped, and that is having an impact on encouraging broadband adoption, he argued that there is also a need to deploy more compelling applications such as “video on demand” that could in turn drive demand.

When questioned on costs of communications in Ireland and whether consumers are getting bang for their buck – with line rental some 70pc above the EU-25 average and mobile operators making average revenue per user rates of €48 – the chairperson of the three-person commission Isolde Goggin argued that Irish consumers have actually seen communications costs fall.

She argued that in the composite basket the EU uses to compare countries in terms of national and international calls, Ireland works out at fourth ‘least’ expensive. She said the consumer price index of between January 1997 and May 2005 has demonstrated that while prices for all goods in the economy rose inexorably, communications costs have continued on a downward trajectory.

By John Kennedy