It is clear that Ireland lags far behind its EU counterparts when it comes to providing a wide range of affordable Internet services to home and small business users. Failure to unbundle the local loop (the last line of cable to the customer) and free it up for use by Eircom’s competitors, has taken much of the blame for the current malaise we find ourselves in.
As a result of LLU, our neighbours now have competition in the market for the provision of Internet access, resulting in a whole range of speeds of connectivity at reasonable prices to citizens and businesses. Although the Irish government has spoken of and acted to tackle the digital divide within our borders, the real focus needs to be on the ever-increasing ‘digital divide’ between Ireland and the rest of the EU.
Limited powers
Hampering the delivery of affordable broadband access and a true flat rate dial up product, are the ODTR’s limited powers. The ODTR was formed with only two real enforcement powers. Breaches of ODTR regulations could result in either a fine IEP1,500 — a ‘pin prick’ to a recipient, or the ‘a-bomb’ option of a revocation of an operator’s license resulting in their inability to offer any products or services in Ireland. Imposing the a-bomb option in Ireland was never really an option as to do so would have resulted in complete chaos.
EU telecommunication legislation that is drawn up by EU commissions and agreed on by member states, is passed to state governments who are given a timeframe to implement it into their own state law. Back when the current legislation was being transposed into Irish law by the Department of Public Enterprise in 1996/97, flat rate Internet access was not a model that had been implemented to any large degree and as a result it was not specifically addressed by the EU legislation. The introduction of flat rate services in other countries was down to the pro-active stance taken by government departments and regulators.
The mechanisms built into the ODTR’s operation by state transposition of the EU legislation differed from other member states. The UK regulator OFTEL has joint jurisdiction with the UK competition authority COMPTEL allowing them to work collaboratively, a relationship that the ODTR did not have with the Irish Competition Authority. Such a relationship greatly aided the development of a flat rate dial-up product (the FRIACO model: flat rate Internet access call origination), which has been available in the UK for several years.
Regulators acting elsewhere
The threat of serious fine from a competition authority and the telecommunications regulator was instrumental in ensuring development of the UK market. Other regulators gauged the market requirements and acted to assist the development of products they felt were required, such as the Italian regulator AGCOM. After assessing the market for Internet access it deemed that there was an unmet demand for a flat rate dial up product and acted to ensure that it was made available.
In Ireland, although there is very much an unmet demand for such a product as demonstrated by the take up of recent partial flat rate offerings, the ODTR does not have the power to impose the release of such a product. Government advisory groups such as Forfas, several industry and consumer groups have been calling for the mandating of FRIACO for some time. The ODTR state that an operator who would like to offer such a product must request if from the network owner, the incumbent (Eircom) as a wholesale product to resell to consumers. The Incumbent is then obliged to respond by entering into negotiations with the requesting operator to work towards the release of the wholesale product.
Eircom has not moved on its own initiative to introduce dial up flat rate. Negotiations initiated by Esat to introduce such a product failed back in the late nineties. In July of this year Esat and Nevada Tele.com entered into negotiations with Eircom for flat rate once more. Eircom’s recent financial statements show a healthy profit on dial-up Internet access and it has demonstrated that it would rather protect the guaranteed dial-up revenue instead of developing the market as FRIACO has been shown to do. The ODTR can only referee such negotiations and cannot force the outcome; it is powerless to do so.
With the recent passing of the Telecommunications Bill 2001 it became possible for the ODTR to become a three-person commission in December 2002. The new Commission for Telecommunications Regulation (CTR) will have a closer relationship with the Competition Authority permitting information sharing that was previously impossible, it will also have increased fining capabilities. However for serious progress to be made we require that the on-going transposition of the latest EU directives by the DPE makes reference to the provision of capacity based products to ensure there is a legal basis this time around for the mandating of particular Internet access products, such as flat rate.
22/04/2003
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