Mr Michael Lowry's explanation for his favourable treatment of Esat Telecom in 1996 is at odds with the legally binding judgment of the independent telecommunications regulator on the issue. The former Fine Gael communications minister has maintained he supported Esat Telecom against Telecom Eireann because the European Commission forced him to, but the telecommunications regulator's position is that Esat's actions were, in fact, illegal under European law. The regulator, Ms Etain Doyle, arrived at her position after consultation with the European Commission and her ruling was not challenged by the Commission.
Mr Lowry said last weekend that he instructed Telecom Eireann - now Eircom - to allow Esat run voice traffic across its network because the European Commission said the company was entitled to use a type of technology called routers or auto-dialers. These devices automatically diverted Esat customers' traffic - fax, data and voice - to the company's long-distance network via the Telecom Eireann local network. Until that point the Department of Communications had considered the use of routers a breach of Telecom's monopoly on voice traffic and had banned them in March 1996. Mr Lowry reversed the decision in June 1996 citing pressure from the European Commission which had been lobbied by Esat. He issued a directive to Telecom Eireann instructing it to facilitate the use of routers and auto-dialers by Esat and the State phone company reluctantly complied. The following year the whole issue was examined by the newly established Office of the Director of Telecommunications Regulation (ODTR), headed by Ms Doyle. The 1997 decision by the ODTR - a copy of which was posted on the organisation's website this week - states: "The director is aware of the possible use of routers or auto-dialers for the provision of voice services and is concerned that this does not occur as it is not in accordance with the terms of the EC derogation on voice telephony". The decision document also states: "The Director has also consulted with the European Commission on this issue".
A spokeswoman for the regulator declined to comment on the conflict between her position and Mr Lowry's action. Mr Lowry said last weekend that he made his decision after the European Commission became involved. "In direct response to Esat the Commission confirmed that Esat had a legitimate right to use routers in order to provide voice services to its customers," he said. The ODTR position of a year later indicated that at the very least the Minister and the Department could have mounted a robust defence of their original March 1996 position instead of conceding to Esat's demands without a contest in June. The ODTR was formed out of the regulatory division of the Department of Transport, Energy and Communications - now Public Enterprise - and many of the officials involved in the 1997 decision would have worked in the regulatory side of the Department in 1996 when Mr Lowry made his policy decision favour of Esat.
The revelation earlier this month that Telenor, a company associated with Esat Telecom, gave £50,000 to Fine Gael in December 1995 has meant that Mr Lowry's connections with Esat and Mr Denis O'Brien are coming under renewed scrutiny.
Telenor has maintained it made the donation at the behest of Mr O'Brien, but he has contested this.
