Regulators team up to liberalise the market

14 Nov 2002

Some say three is a crowd, but in this case three brings a crowd. Three regulators, two involved in the liberalisation of telecoms and energy markets respectively, another in the promotion of competition rights in business, held an audience at this week’s First Tuesday spellbound and indicated just how far Ireland has come as a nation of merchants and traders.

An Ireland already jaded by the high jinks, scandals and bribery of corrupt politicians has to negotiate an infrastructure that looks like the designs of a three-year-old with a Meccano set and a tantrum.

Deficiencies in competition in our telecoms market, lack of broadband, lack of choice in energy, overpricing of property and rising insurance costs that are driving motorists off the road and firms out of business, are all issues that are laid at the feet of the regulators. The regulators, whose job is to free the public from the interference of corrupt politicians and planners, as well as the menace of price fixing by monopolies and cosy cartels, put themselves on display on Tuesday night. As well as liberalising markets, they liberated a crowd of business folk from many preconceived notions of what regulators are about.

Etain Doyle, director of the Office of Telecommunications Regulation, took her place alongside Tom Reeves, of the Commission for Energy Regulation and Isolde Goggin of the Competition Authority. Goggin is due to leave the Competition Authority to join Doyle and John Doherty at soon-to-be-established Commission for Communications Regulation (CCR). Her expertise in competition law, crucial to the dismantling of anti-competitive practices by business and abusive dominance of markets by incumbent players, will prove critical in implementing forthcoming directives from the European Commission on communications in the coming months and years.

Doyle, Reeves and Goggin proved that regulators are of a certain ilk, pragmatic individuals who listened carefully, noted questions and responded in a calm, yet authoritative fashion. Each made it clear that their roles are a mesh of opening up free markets and protecting the interests of business and entrepreneurship, after wading through complex legalities in the face of incumbents loath to surrender market domination. We have to remember, explains Goggin, that many of the infrastructures on which we depend and expect to be liberalised were the result of State provision, such as the creation of the postal service, our road networks and our telecommunications and how old bylaws and regulations impact the running of other markets such as taxis, pubs and pharmaceuticals. In Doyle’s case, she is currently wading through postal legislation that dates back to 1760 and telegraph legislation going back to 1868.

On the issue of telecoms, Doyle’s position came into being in 1997 when it became clear that Ireland needed to speed up its liberalisation of telecommunications following revelations that major inward investors such as Microsoft were sending valuable data hosting and mirroring projects elsewhere due to lack of local competition. “In 1998,” she recalled, “Eircom woke up to the realisation that being the sole supplier to big business was not necessarily the best position for them to be in. It takes a lot of time before an incumbent gets to progress to the idea that competition is where it is at and it is good for their business. It is still an ongoing process.

“Much of our job is to keep the boat moving, a lot of work needs to be done to move the markets. In many cases, getting the legislation to enforce our decisions is only a part of the battle,” Doyle said, perhaps alluding to recent battles with Eircom over wholesale DSL (digital subscriber lines) rates and the recent enforcement of NTL to meet the obligations of its MMDS licences.
“But our job is to stick at it and get results one way or another,” she added.

On the issue of 3G (third generation), Doyle said that Ireland is the only country in Europe that stipulated allowances for mobile virtual network operators (MVNOs) as a 3G licence requirement.

The forthcoming CCR will have to deal with implementing at least five new directives from the EU, a role that Goggin with her Competition Authority experience may be ideal for.

Unlike communications, said energy regulator Tom Reeves, the energy market has, on the face, of it enjoyed a smoother liberalisation, but still faces major hurdles. “A 400 megawatt power station costs €250m to build, yet would only meet 10pc of Ireland’s needs. For bigger nations like Britain and Germany, this is a drop in the ocean. The trade of energy is increasingly a free international market and ensuring fair play means that our jobs are far from finished,” he said.

Pictured above: Isolde Goggin of the Competition Authority, Tom Reeves of the Commission for Energy Regulation and Etain Doyle, the director of the Office of Telecommunications Regulation

By John Kennedy