Introduction
Legislative Background
National Regulatory Authority
Licensing
National Numbering Resource
Number Portability
Significant Market Power
Universal Service Obligation
Tariff Structure
Infrastructure
Mobile Telephony
Carrier Pre-selection
Local Loop Unbundling
Competition Law
Introduction
The Irish telecommunications market was opened up to full competition on December 1 1998. Although Ireland had requested and had been granted a derogation by the European Commission from full liberalization until January 1 2000, the Irish government announced in May 1998 that Ireland would open up the market to full competition one year ahead of schedule.
The telecommunications market in Ireland has experienced significant growth since liberalization. There are currently 46 operators active on the market, generating total revenues in excess of I£2 billion a year (amounting to 2.9% of the gross domestic product). In the fixed line market, the former incumbent, eircom (formerly Telecom Eireann), has seen a considerable decrease in its market share, with new entrants' share of the market estimated in excess of 17%. With the advent of local loop unbundling, the market share of the former incumbent is set to be eroded further. The mobile market has experienced dramatic growth and mobile penetration is estimated at approximately 56% of the population. The internet market has also experienced rapid growth, with business internet access estimated at approximately 96% while residential access is in excess of 35%.
This dramatic development of the telecommunications sector in Ireland in the two years since liberalization has been effected by a dynamic regulatory regime. The key aspects of this regime are set out in this update.
Legislative Background
The Postal and Telecommunications Services Act 1983 (as amended) is the primary legislation regulating the Irish telecommunications sector. The act has been substantially amended, in particular by the Telecommunications (Miscellaneous Provisions Act 1996) and also by a number of statutory instruments implementing EU directives into Irish law.
National Regulatory Authority
The 1996 act established an independent regulatory authority, the Office of the Director of Telecommunications Regulation (ODTR), to which it transferred the functions of the minister for public enterprise relating to the regulation of telecommunications, radio communications and cable television. The minister continues to have overall responsibility for telecommunications policy. The director of telecommunications regulation, Ms Etain Doyle, took up her functions on July 1 1997 and her office has been instrumental in the development of the telecommunications market in Ireland.
The ODTR has a wide range of regulatory functions in respect of telecommunications services, radio spectrum and television transmission systems. It also manages and administers the National Numbering Resource. One of the ODTR's principal functions is the issuing, renewal, enforcement and general administration of licences granted pursuant to the 1983 act for the purposes of the provision of telecommunications networks and services to the public.
Licensing
The ODTR has opted for a regime of "sufficient but light-handed regulation" in relation to Ireland's telecommunications licensing framework. The regime comprises two licence types, a general telecommunications licence and a basic telecommunications licence. Licences are non-exclusive and personal to the licensee.
A general telecommunications licence permits the licensee to provide public telecommunications networks, voice telephony services, and any other network, service or system which requires the allocation to users of numbers from the National Numbering Resource. The main conditions of the general licence, which apply to all operators, cover such areas as term, compliance, public service obligations, trench sharing, operation of payphones, use of numbers and quality of service. General licences are valid for a period of 15 years. The fee for a general telecommunications licence is currently €12,500.
A basic telecommunications licence permits the licensee to provide telecommunications networks and services to the public, not including voice telephony and services involving the use of numbers from the National Numbering Resource. Basic licences are valid for a period of five years. The fee for a basic telecommunications licence is currently €2,500.
National Numbering Resource
The National Numbering Resource consists of all numbers which may be dialled on a public telecommunications network in Ireland and which are used to establish telephone calls. The director is responsible for administering the National Numbering Resource in accordance with the terms of the European Community (Interconnection in Telecommunications) Regulations 1998, (SI 15 of 1998). The director is required to ensure that the allocation of numbers is carried out in an objective, transparent, non-discriminatory and timely manner.
At present, blocks of numbers are allocated by the director to licensed network operators, which in turn make individual allocations to users.
Prior to liberalization, Ireland was divided into 128 minimum numbering areas for the purpose of allocating geographic numbers. The maps which defined these areas were maintained by the incumbent telecommunications operator, eircom. Since full liberalization, all licensed operators allocate geographic numbers to customers in compliance with these maps.
Number Portability
Geographic number portability, which facilitates the transfer of a customer from one operator to another by enabling the customer to retain their existing number, became operational with effect from November 30 2000. Number portability for non-geographic numbers was introduced on January 1 2000. The director recently announced that an indicative date toward the end of 2002 has been set for the introduction of full mobile number portability in Ireland.
Significant Market Power
Subject to exceptions, where a fixed operator has a share of 25% or more of the relevant market within the geographical area in which the fixed operator is authorized to operate, it may be designated by the director as having significant market power (SMP). Additional licence conditions apply to organizations designated as having SMP. These conditions relate to a number of areas including non-discriminatory access, retail price control, cross-subsidization, selling practices and misuse of data.
In October 1998 the ODTR designated eircom as having SMP in the fixed, leased line and interconnect markets. Eircell (a subsidiary of eircom currently being acquired by Vodafone) was designated as having SMP in the mobile market. In December 1999 Esat Digifone was designated as having SMP in the public mobile telephony market and Eircell was designated as having SMP in the national market for interconnection.
Universal Service Obligation
In addition to its SMP obligations, eircom has been designated as the universal service provider. Accordingly, eircom is obliged to make available at an affordable price to all users within a specified geographical location (ie, the entire geographical area of the Republic of Ireland) a defined minimum set of services of a specified quality. These services include connection to the fixed public telecommunications network and access to telecommunications services, the provision of public payphones, and the provision of directories and directory inquiry services.
Tariff Structure
Under the 1996 act the director may impose price caps with respect to one or more baskets of services where the director finds that no competition exists for a relevant service or where the service provider has a dominant position. The existing tariff order came into operation on January 1 2000. This order places a price cap on certain of eircom's tariffs that will result in an overall downward movement in eircom's tariffs in each calendar year, for three years.
Infrastructure
The installation of lines is governed by the Telegraph Acts 1863-1916 and the 1983 act. The Telecommunications (Infrastructure) Bill 1999, published in March 1999, proposes a new regime governing the rights of access of network operators to public highways and private land for the construction of telecommunications infrastructure. The bill aims to put competitors on an equal footing with eircom, which has statutory rights over private land for installing infrastructure.
Mobile Telephony
There are currently three licensed mobile telephone operators in Ireland: Eircell, Esat Digifone and Meteor Mobile Communications Limited. Meteor's licence was granted in July 2000 and it is expected to launch its service shortly. All three GSM (Global System for Mobile Communication) mobile network operators have identical allocations of spectrum (ie, 2 x 7.2 megahertz (MHz) in the 900 MHz band and 2 x 14.4 MHz in the 1800 MHz band). Both Eircell and Esat Digifone have been designated as having SMP in the public mobile communications service market.
The competition for the selection of licensees for third generation mobile phone technology is expected to be launched in February. The competition will be a comparative selection process (ie, a 'beauty contest'). The licences are expected to be awarded in June 2001.
Carrier Pre-selection
Directive 98/61/EC requires that operators with SMP in the fixed public telephone network and services sector provide carrier pre-selection facilities for their public switched telecommunications network/integrated services digital network customers, to access the switched services of interconnected operators. Pursuant to ODTR Decision Notice D2/99, eircom was required to provide carrier pre-selection facilities from January 1 2000. It is reported that carrier pre-selection has greatly facilitated competition in the fixed line market in Ireland, with over 120,000 business and residential subscriber lines using carrier pre-selection in early Autumn 2000.
Local Loop Unbundling
In April 2000 the Director of Telecommunications Regulation issued Decision Notice D6/00 mandating the introduction of 'bitstream access' by April 2001. Subsequently, the European Parliament and Council adopted Regulation (EC) 2887/2000 on unbundled access to the local loop in December 2000. Article 3(2) of the regulation obliges notified operators to meet reasonable requests from beneficiaries for unbundled access to their local loops and related facilities under transparent, fair and non-discriminatory conditions from December 31 2000. Notified operators are obliged to provide beneficiaries with facilities equivalent to those provided for their own services or to associated companies, and with the same conditions and time scales. Although eircom published its Reference Offer for Local Loop Unbundling in December 2000, the ODTR indicated that a number of changes will be necessary before it can approve the offer.
Competition Law
The Competition Acts 1991-1996 are applicable to the telecommunications sector in Ireland. The Competition Acts provide a general framework for controlling anti-competitive behaviour, including a prohibition on anti-competitive agreements and abuse of a dominant position. The Competition Authority is responsible for the administration and enforcement of the Competition Acts in Ireland.
For further information on this topic please contact David Sanfey at A & L Goodbody by telephone (+353 1 649 2000) or by fax (+353 1 649 2649) or by e-mail ([email protected]).
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