International Benchmark

Ireland

By Alessandro Mauro
To submit comments and updates: alessandro.mauro@telecomitalia.it

The talks about the possible separation of the network of the incumbent Eircom was initiated by the owner itself of the operator, the Australian Babcock & Brown, who thus sought to monetize its investment in the Irish market.

In 2007 Babcock & Brown submitted a formal proposal in this sense to the Ministry of Communications and to the NRA, the Commission for Communications Regulation (ComReg).

In 2008 talks were suspended due to the turmoil in the financial markets and the debate on the future of the telecommunication industry in Ireland taking place in the Irish Government.

Following the 2010 ECTA ECTA Regulatory Scorecard, according to which the Irish telecommunications market is not sufficiently competitive, the other licensed operators of the Republic of Ireland have jointly made the request for a structural separation of Eircom's network. In particular, such a request was formulated by the Irish Trade Group ALTO (Alternative Operators in the Communications Market): ALTO emphasized that the remedies adopted by the Government and the Authority did not produced the desired effect: the separation of Eircom into a retail and a wholesale division would therefore be necessary. The ALTO Chairman Ronan Lupton recently declared: "We are urging that the new communications framework be transposed into EU law immediately and that ComReg uses the power it grants to functionally separate Eircom”.

The alternative operators repeated their request also in occasion of the recent public consultation on the next generation network.

In the response to this public consultation, published in July 2010, the Authority reaffirmed that the new regulatory framework that will start in 2011 will contemplate as a remedy of last resort the adoption of models of network functional separation for those operators who have a significant market power (SMP) for which the measures undertaken did not eliminate the discriminatory conduct.

“The new regulatory framework which will be transposed during 2011 provides for a remedy of functional separation for an operator with significant market power (SMP). This is framed as a remedy of last resort, to be considered in cases where existing forms of regulation can be shown to have failed in preventing discriminatory behavior from a vertically integrated operator (and as a result there is persistent market failure).”

From “Response to Consultation on Draft Strategy Statement 2010 – 2012”, Commission for Communications Regulation,  July, 1st 2010

However, the Authority also highlighted the possible costs associated with a functional separation:

  • is such a measure actually necessary and proportionate?
  • would it be possible to identify different and more appropriate / efficient solutions?
  • what impact a “forced” functional separation might have?

The NRA observed that as the experience of other Member States demonstrates, better results are achieved when functional separation is proposed and voluntarily adopted by the incumbent.

The Authority launched a public consultation in 2012 with the aim of identify the most appropriate remedies to be imposed on the incumbent Operator as far as the NGAN services are concerned.