Bill to give ComReg power to carry out its mission

Having served on peacekeeping duties in the Lebanon and the former Yugoslavia in a former life as an army officer, Mike Byrne…

Having served on peacekeeping duties in the Lebanon and the former Yugoslavia in a former life as an army officer, Mike Byrne should be more than ready to cope with the slings and arrows that will come his way as new chairman of ComReg, the Commission for Communications Regulation.

"I know a little bit about conflict resolution," he laughs. "The skills I picked up in relation to conflict resolution are good skills to have as a regulator."

They may certainly come in handy. Dealing with the various players in Ireland's telecoms market, ComReg has regularly been criticised by all sides and also has to contend with broadsides from lobby groups, politicians and consumers over its lack of punch in dealing with perceived high prices.

"People tend to blame regulators for high prices but I don't think that is fair from a telecoms perspective," he says. "It is one sector where prices have come down. Even in terms of broadband, it's only a few years ago that the monthly stipend for broadband was about €130. You can now get broadband packages for €9.99 and the standard one with line rental is about €30. It has dropped significantly."

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That may be so, but recent figures would suggest that the market is still hampered by a lack of competition. A recent European Competitive Telecommunication Association scorecard saw Ireland drop to ninth place in the table of 17 European nations, having been ranked fifth in 2005 in terms of opening up telecommunications markets to competition. That would seem to back up the perception that the momentum is backwards rather than forwards.

"We would still be deemed as one of the more proactive and compliant countries with regard to the new regulatory framework," argues Byrne. "Where we haven't done so well, particularly in that report, is in local loop unbundling and we know we have an issue there and it's a problem which needs to be addressed."

It seems that every monthly report from ComReg slams Eircom over the pace of its local loop unbundling, the process whereby other telecoms companies are given physical access to its exchanges so they may install their own equipment. "Progress on that has not been acceptable to date," he concedes.

From his former military experience, Byrne would be only too aware of the need for a firm mandate and the right equipment to carry out a mission. The fact that a new Telecoms Miscellaneous Bill, designed to give consumers more protection and ComReg more power, is due to come before the Dáil this month, would suggest that up until now, ComReg was not equipped to carry out its role effectively and that it is currently a watchdog with a bit of bark, but no real bite.

"I don't think that is fair. I think we have made a number of significant interventions to protect consumers and also demonstrated our ability to be able to support innovation in terms of powers that we have. The sector we are in is a dynamic sector and it changes rapidly. To have the additional powers to be able to reinforce our ability to ensure that operators fulfil all of their obligations is always welcome."

The Bill is designed to give the regulator more muscle, something which was sought by ComReg for some time.

"One of the powers that we have been looking for is the ability to be able to fine up to €4 million or 10 per cent of turnover for breaches of obligations and that is something that we are confident will be included in the new revised powers."

Other powers the regulator has sought are co-competition powers similar to Ofcom in the UK, which has the power to separate operators that are designated as having significant market power for failures to provide services in a non-discriminatory fashion. It also wants the ability to summon witnesses before hearings and examine them under oath as Ofcom can.

Critics say the powers are much needed, but are coming too late. While Smart Telecom's board has borne the full responsibility for its spectacular fall from grace last year, there was also a feeling in some quarters that the slow pace of local loop unbundling was in part responsible for Smart's undoing because a large element of its strategy relied on the unbundling of exchanges. It's not something that Byrne is willing to entertain.

"You need to be able to deliver on the products you are offering to the consumer and Smart offered a range of products ranging from wholesale line rental all the way over to full unbundled services. Smart management were part of the process working groups for all of those products, so they were fully aware as to the different stage of delivery of each of those products."

Nor should the regulator be blamed for withdrawing the 3G licence that Smart had been offered, he says. "Our decision was fully vindicated by the courts. We have a job to do and we will do it. We offered the licence to Smart subject to it fulfilling certain conditions. It failed to do so."

Nevertheless he is only too aware of the damage done to consumer confidence with regard to competition in the telecoms marketplace from Smart's problems, but he argues that was largely the fault of the company and strenuously defends ComReg's role in the saga.

Despite the slow rate of progress on local loop unbundling, competition in the broadband market has been helped by ComReg's decision to allow wireless providers into the market, says Byrne.

Other regulatory-led initiatives, such as number portability, have led to more competition in the mobile market. And despite figures which show that mobile phone companies make more out of customers in Ireland than elsewhere in Europe, he says competition is working and the advent of Meteor and 3 is starting to drive down prices.

The recent announcement by Tesco that it was to enter the market though a mobile virtual network operator (MVNO) agreement with O2 will provide further options for consumers, he says.

In the postal sector, for which ComReg is also responsible, quality of service remains a key challenge. "We are pleased that there is a commitment within An Post to address the quality of service issues in terms of updated quality reports," he says, adding that the implementation of a revised accounting directive should allow ComReg to determine the correct cost structure for future applications for price increases.