Telecoms companies are trying to expand rapidly all over Europe, as they race to take advantage of deregulation of the voice telephony markets. But laying new networks is very expensive, so they are clamouring for access to existing infrastructures, such as railway lines, underground ducts, and microwave networks. In the rush, prime real estate is being rapidly snapped up - so much so that the European Commission has been busy ensuring fair access for all.
Like a maitre d'hotel steadfastly keeping some space at the head table, the EC is overseeing the flurry of joint venture activity between telecoms companies and public authorities, ensuring competitors are not elbowed out by exclusivity clauses.
For example, the EC's directorate general on competition, known as DGIV, last May approved the ESB/British Telecom joint venture to provide a national telecoms network built largely on top of the ESB's existing infrastructure. However, in approving the deal the Commission also denied the joint-venture company, Ocean, exclusive access to the ESB's underground ducting, overhead power lines, or microwave equipment.
According to the Commission's decision notice, just published, Ocean had sought exclusive access for an undisclosed number of years because, under Irish law, it could not buy parts of the ESB's infrastructure. It had asked the Commission to regard the exclusive access clause as a transfer of ownership, but the EC said this had "not sufficiently been justified by the parties. "The `rights of way' of third parties to lay down their own telecommunications cables could be prevented," it concluded.
In effect, the EC is saying public utilities, in this case the ESB, must remain free to do deals with other telecommunications companies.
Ocean was not the only company to push its luck with an exclusivity clause. Last month, the EC intervened in a deal between the French national railway authority, SNCF, and the second French telephone operator, Cegetel. While signalling its intention to approve the venture, DGIV forced the companies to drop clauses which could prevent other operators laying networks along rail lines.
Cegetel, which is jointly owned by Compagnie Generale des Eaux of France, British Telecom, Mannesmann of Germany, and SBCI of the US, is building a national telecoms infrastructure in France. It formed a joint-venture company with SNCF to develop a communications network with exclusive access to the existing SNCF fibre network and priority access to railway property for laying new fibres along railway routes.
However, the EC cried foul at the original proposals for access to railway property, insisting the railway operators must be "free to use any remaining capacity for access rights as they see fit, in particular by making it available to other operators".
A spokesman for DGIV said a similar issue had arisen in Germany, where Mannesmann and Deutsche Bahn, the railway company, also formed a joint-venture company, called Arcore. It is expected that the intervention in the French case will affect Arcore similarly.
The DGIV spokesman said the EC regarded railway networks as particularly important infrastructures for communications network development. He said this was because countries usually only had one railway authority, which was attractive for telecoms companies as there was only a single point of contact for making deals. Furthermore, he added, railway networks usually connected the major population centres, and went right to the centres of cities, making them perfect models for telecoms and data networks.
From the telecoms companies' viewpoint, laying national fibre networks involves significant investment so they naturally want exclusive rights to head off competition.
But the EC attitude is that where public bodies have nationwide or even widespread infrastructures which are suitable for communications networks, the bodies should not be excluded from doing deals with multiple operators.
Closer to home, other prominent deals or pending deals between public infrastructure companies and telecoms-network providers have yet to come under DGIV's scrutiny.
For example, the deal between Esat Telecom and CIE has been notified to DGIV, but to date the EC body has not addressed it. The companies are hoping it will be approved, because unlike their French equivalents, they have not set up a joint venture, and CIE - under instruction from the Department of Public Enterprise - has not given Esat exclusive access.
The Irish Competition Authority has also been notified of the CIE-Esat deal, and is looking at whether to certify or license it. In the meantime, it says it has not studied the EC intervention in the SNCFCegetel deal, and has yet to evaluate whether that has any implications here.
Meanwhile, one of the few remaining public infrastructures yet to be used for communications networking - the Bord Gais Eireann network - is likely to be exploited as soon as Bord Gais Eireann and Telenor of Norway have been holding discussions.
Anyone else with national or even citywide networks of tunnels or links are likely to find themselves courted by hungry telecoms companies before too long.
Eoin Licken is at elicken@irish-times.ie
