Ireland
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Ireland |
 Historical
and juridical viewpoint
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There
has been no deregulation per se, but rather a set
of new regulations gradually introduced, in the context
of facilitating entry by the private sector into
telecommunications and the introduction of competition.
These principles, defined at European or broader level,
have led to fundamental changes in the Irish
telecommunications sector over the past fifteen years,
with first service supply and then sector regulation
splitting from the government’s postal or
telecommunications department. I. Historical and Juridical Viewpoint 1.1 Telecommunications Legislation The first of the two defining acts in the recent development of Irish telecommunications services was the Postal and Telecommunications Services Act, 1983. This act provided for the constitution of separate postal and telecommunications authorities and assigned functions previously exercised by the then Minister and Department for Posts and Telegraphs (now Minister and Department for Public Enterprise). Telecom Éireann, the new telecommunications company, had exclusive rights to provide and maintain public services within the State, with cross subsidies permitted between loss making and profitable services. The company had a "general duty" to conduct its affairs such that "charges for services are kept at the minimum rates consistent with meeting approved financial targets", while revenues are sufficient to meet charges, capital needs and borrowings (1983 Act, §15). Notwithstanding this right of exclusive privilege, the Minister was permitted to grant licences for the provision of telecommunications services by other bodies under certain conditions:
The second of the two defining acts in the liberalisation process was the Telecommunications (Miscellaneous Provisions) Act, dated December 10, 1996. The Act, which came into operation during the first quarter of 1997, amended the Postal and Telecommunications services Act of 1983. This Act defines new regulatory ground rules with the creation of a new Office of Director of Telecommunication Regulation. Licences issued by the Director of Telecommunications Regulation will be required to include public service requirements specified by the Minister for Public Enterprise. The Director will also regulate tariffs in situations where there is no, or little, competition. 1.2 Copyright and Intellectual Property Rights The Irish government was obliged to transpose the provisions of the Copyright Directive 92/100/EEC into Irish law by January 1, 1994. In addition, as a signatory to the World Trade Organisation's (WTO's) agreement on the Trade-Related Aspects of Intellectual Property Rights, the government entered into a binding agreement to introduce copyright protection for computer software and a variety of reproduction media. However, the last substantial reform of Irish copyright and intellectual property rights legislation took place in the Copyright Act of 1963. The terminology used in this Act is now considered to be obsolete as it does not take new and planned technologies and dissemination methods into consideration. In February 1998, the United States government made and then suspended a complaint to the WTO against both the Irish government and the EU, on the basis of the inadequacy of Irish legislation. The suspension of the US case was made on the undertaking that new copyright and intellectual property legislation would be introduced by the Irish government promptly. Two copyright bills are to be enacted to achieve this. The first, the Copyright (Amendment) Act increases the potential penalties for infringements under the existing 1963 copyright act and also shifts the burden of proof in civil cases. The penalty for copyright infringement is increased with a maximum £100,000 fine and prison sentences of up to 5 years. A presumption in favour of copyright holders taking actions means that, in civil cases, the burden of proof is shifted to defendants. The second bill to fully reform copyright legislation is now in draft form and has been circulated to selected bodies for comment. IMRO, the Irish Music Rights Organisation, has reacted strongly against fee exemptions for educational users of information. 1.3 Internet Content Regulation A new Child Trafficking and Pornography Bill was published by the Minister for Justice, Mr O'Donoghue, in December 1997. This is the first item of legislation to directly affect Internet usage as the definition of pornography includes images and audio representations of children, under the age of 17, stored by computer or generated by computer software. The Act makes it illegal to knowingly possess, produce, distribute, print, publish, import, export, sell or show any child pornography. The provisions relating to possession may affect the status of Internet Service Providers when temporarily 'caching' or storing web pages on their servers, in addition to their role as agents for the distribution of digitally-stored data. 1.4 Data Protection and Privacy The Minister of Public Enterprise, Ms Mary O’Rourke, announced a three page framework document on cryptography and digital signatures on June 24, 1998. The document proposes that the State will allow without restriction any form of data encryption. Rather than seeking a technical key to unlock messages, it is proposed that the State will require a search warrant to require users to open encrypted messages. A brief, three page joint communiqué, which expands upon the joint EU-US Joint Statement on Electronic Commerce, was ‘digitally signed’ by Taoiseach Bertie Ahern and US President Bill Clinton on September 4, 1998. Nine fundamental principles are presented in the communiqué by the two governments to guide the development of Electronic Commerce. Intended to create a welcoming, largely unregulated electronic commerce environment, the Communiqué takes a relaxed, liberal approach to the regulation of encryption. Ireland will allow any form of encryption to be used, imported or exported. Rather than the US encryption key deposit regulations, Ireland has chosen to require a search warrant to achieve disclosure where necessary. The full text is available at http://www.baltimoreinc.com/clintonvisit98/. The Freedom of Information Act was fully implemented within government departments on April 21, 1998. The Act will extend to health boards and local authorities from October 21, but will continue to exclude the Garda Síochána (the police force) and voluntary hospitals and schools. An Information Commissioner and Ombudsman, Mr Kevin Murphy, has been appointed to review refusals to provide information and arbitrate. 2.1 The Office of the Director of Telecommunications Regulation Responsibility for regulation of telecommunications services was held under the 1983 Postal and Telecommunications Services Act 1983 by the Minister for Posts and Telegraphs. A subsequent name change led to this Minister becoming the Minister for Transport, Energy and Communications by the time of the 1996 Telecommunications (Miscellaneous Provisions) Act. In June 1997, the Minister was re-named the Minister of Public Enterprise. The Minister is currently Ms Mary O'Rourke. Ms Etain Doyle was appointed Director of Telecommunications Regulation on May 1, 1997, and a transfer of regulatory functions from the Department for Public Enterprise took place on June 30, 1997. A new body, the Office of the Director of Telecommunications Regulation ("ODTR") was established at that time with the functions of the National Regulatory Authority ("NRA") as defined in EU law. The functions of the ODTR are broadly limited to infrastructure regulation and include:
The ODTR perceives itself as responsible for promoting "decent spread", competition and choice in the telecommunications industry and seeks to issue licences for services under the principle that, if there is demand from providers, it will respond. The Director of Telecommunications Regulation issued a Levy Order on February 16, 1998 under the to provide for a quarterly levy on providers of telecommunications services. This levy will be used to fund the Office of the Director of Telecommunications Regulation. EU Interconnection Directive regulations were enacted on January 22, 1998. The Office of the Director of Telecommunications Regulation is currently examining the implementation of these provisions. While Esat Digifone has negotiated an interconnection agreement with Telecom Éireann including tariffs, the EU Commission is currently adjudicating a complaint filed by Esat Telecom regarding the connection rates that it is being charged by Telecom Éireann. On May 22, 1998, the Minister of Public Enterprise, Ms Mary O’Rourke, made a major announcement about the early liberalisation of the Irish telecommunications market. The derogation on voice telephony was to cease on December 1, 1998, more than a full year before the date previously agreed with the European Commission. The announcement is attributed to a number of factors, including a Forfás (industrial development policy advisory and co-ordination board) report on the need for greater investment in broadband infrastructure, and discussions with Microsoft regarding the possible location in Ireland of a European mirror web site for the company (the business went to London). These found that Ireland is perceived to be a marginal, uncompetitive and regulated location. The announcement of early liberalisation, which has been widely welcomed, has increased the pace of activity within the Office of the Director of Telecommunications Regulation. Key issues to be addressed by the ODTR include:
The Director of Telecommunications Regulation has called for greater authority to issue fines and penalties for companies who engage in anti-competitive practices. The Minister of Public Enterprise has also confirmed that she will introduce legislation to strengthen the powers of the regulator. Documents outlining the ODTR Director’s positioning on telephone numbering and portability issues have been issued (ODTR documents 98/08 and 98/28). Two possible numbering systems are being explored by a Task Force on numbering with industry and consumer representation. The first of the two options includes the continuation of the current framework, with the lengthening of subscriber numbers to create additional capacity as required and the use of 03 and 08 prefixes for non-geographic numbers. The second option, preferred by the Regulator, is for the introduction of new 9 digit geographic and non-geographic numbers, and the end of local dialling and trunk prefixes. Migration paths to both options are being preserved, with the lengthening of 5 and 6 digit numbers in the short term, until a final decision is made. Full number portability is to be available by January 1, 2000. Carrier selection by users will be available from the end of 1998, allowing choice of service providers through the use of carrier selection number prefixes (ODTR document 98/13). Numbers have now been allocated (ODTR document 98/30). Further information, including documents issued in 1998, is now available at the ODTR website http://www.odtr.ie 2.2 Advisory Committee on Telecommunications On June 24, 1998, the Minister of Public Enterprise, Mary O'Rourke, announced the creation of a high-level Telecommunications Advisory Group. The Committee, which will meet over the summer and autumn of 1998, is chaired by Brian Thompson of Qwest Communications. Other members of the Committee include Vinton Cerf of MCI, Don Heath, president and Chief Executive Officer of the Internet Society, Dennis Gilhooley, a consultant with Teledesic and Ray Smith, chair of Bell Atlantic. The Chair has stated that government policy in Ireland needs to be radically overhauled to establish a competitive environment for e-commerce. 2.3 The Information Society Commission The Minister for Enterprise and Employment launched the report, on March 1997, of an independent Information Society Steering Committee appointed in March 1996. Entitled "Information Society Ireland, Strategy for Action", the report is available at http://www/forfas.ie/infosoc. The report presented a series of objectives and strategies to overcome the identified barriers, and specific actions to implement them. Following the publication of the report, a new Information Society Commission was established with a membership based upon that of the Steering Committee, including representation from social partners. The Chair of the Steering Committee, Vivienne Jupp of Andersen Consulting, was appointed to chair the new Commission in mid 1997 and a part time Director of the Commission, Norman Wilkinson, was appointed in late 1997. The Information Society Commission published its first Report in February 1998. This Report noted key items of progress since the publication of the Steering Committee's Report, set a context and short term goals for the Information Society Commission and highlights areas where urgent action is required. The Report, available on the Commission's web-site at http://www.infosocomm.ie, also identifies the following three priority areas for attention in the context of the development of the Information Society in Ireland:
Broadcasting
Regulation The Minister for Arts, Heritage, Gaeltacht and the Islands announced proposals for digital television broadcasting and regulation on July 23, 1998. The proposals will give an expanded development and regulatory role to the Independent Radio and Television Commission (IRTC). The new, enlarged body, will regulate and monitor standards on up to 30 digital terrestrial television channels, grouped into 5 channel multiplexes. It will "be given the role of determining broadcasting programme and advertising standards, taking account of our national expectations, cultural values and mores and the requirement of the EU Television without Frontiers Directive." RTÉ had sought and secured approval to seek a strategic partner to devlop digital transmission systems. RTÉ is proposed to hold a 40% stake in a new transmission company. RTÉ will receive 1 multiplex for its own purposes, and TnaG will become a body independent of RTÉ with half a multiplex. A broadcasting bill was to be published before the end of 1988. Technical specifications for the operation of cable television systems were issued in May 1998 (ODTR Document 98/12). The provision of Value Added Services is governed by the Postal and Telecommunications Services Act 1983, as amended. The 1983 Act was amended by Statutory Instrument 45 of 1992, European Communities (Telecommunications Services) Regulations, regarding user access to public telecommunications networks and the liberalisation of value added and data transmission service markets. A further Statutory Instrument, 328 of 1994, European Communities (Application of Open Network Provision to Leased Lines) Regulations gave legal effect to Council Directive 92/44/EEC and 94/439/EEC, regulated the supply of leased lines. The Office of the Director of Telecommunications Regulation ("ODTR") issued its first Decision Notice, "D1/97", "Voice Telephony in the Irish Telecommunications Market" (Document No. ODTR 97/11), dated September 22, 1997. This Notice announced a "new method of access for the provision of services to the public by licensed telecommunications service providers" through "SwitchLink" access for the provision of voice and data over the PSTN, available from October 20, 1997. The Notice set out Telecom Éireann wholesale charge rates for services supplied by licensed service providers and service level agreements applying to licensed service providers. The Notice also clarified the then unauthorised status of routers and autodiallers for the provision of voice services. Currently there are over 60 licensed companies, with further applications being processed by the Office of the Director of Telecommunications Regulation. A range of companies offer managed network services, leased lines supply or call-back services. Two new services were launched prior to full liberalisation, enabling both residential (Swiftcall and Esat Home) and commercial (Swiftcall) to access cheaper international calls. For residential customers, both Swiftcall and Esat Home services require prepayment of calls, which are made by dialling the number of a freephone service centre. A third company, Torc Telecom, is targeting the international, pre-paid calling card market. Analogue (TACS-900) mobile services began in 1985; digital GSM services began in 1993. Both of these services are operated by Eircell Ltd, part of the Telecom Éireann group. In May 1996, Statutory Instrument 123 of 1996, European Communities (Mobile and Personal Communications) Regulations, opened up mobile telephony and paging services to competition. A second national mobile GSM licence was issued in May 1996 following a competitive tendering process. The contract was awarded to Esat Digifone, 45% owned by Esat Telecom, 40% owned by Telenor (Norway) with the remainder held a private Irish consortium member. This second GSM digital service commenced on March 21, 1997 with an initial 80% coverage of the population. The license, for a combined DCS 1800 and GSM service, is for a 15 year term. National coverage of at least 1/3 of the Irish population is required using DCS 1800 within 2 years of the license date of issue. 80% minimum population coverage is required within 4 years. In a press release, the Director of Telecommunications Regulation stated that Meteor "have committed to launch the service 9 months after the issue of the license". The incumbent GSM operators were not eligible for this third license. However, the Director of Telecommunications Regulation has indicated that DCS 1800 applications from these operators will be considered with a service commencement date not before January 1, 2000. The award is the subject of legal action by Orange Communications. The Telecommunications (Miscellaneous Provisions) Act enabled the issue or sale of shares in Telecom Éireann to third parties. A minority stake has subsequently been sold to KPN of the Netherlands and Telia of Sweden. The government has also agreed the sale of a 5% stake in this semi-state telecommunications utility to its employees through an Employee Share Ownership Scheme ("ESOP"), with the balance of 14.9% reserved for the scheme. The flotation of a stake in the semi-state company is also expected in the second half of 1999. Immediately prior to the flotation, the government is expected to hold 50.1% of the equity in the company, with KPN and Telia holding 35%. Results for 1997 were announced on June 25, 1998. Pre-tax profits rose by 9% to EUR 283 million, with a reduction in debt by EUR 256 million to EUR 222 million. During the same year, the number of lines grew by 8%, so that there are now 83 lines per 100 households. Revenue from voice telephone calls has declined from 80-90% of revenue five years ago to 60% now, with a reduction to 30% anticipated over the next five years. Most revenue is expected to come from data, internet and e-commerce traffic. The company has made a EUR 63.5 million provision for restructuring over the next year. The chief executive of Telecom Éireann, Mr Alfie Kane, expects the company to come under pressure on local calls, currently among the highest in the EU. The liberalisation of alternative infrastructure took place as agreed between the Irish Government and the European Commission on July 1, 1997. The provision of licenses to establish a telecommunications network is governed by section 111 (2d) of the Postal and Telecommunications Act 1983, as amended. The Director of Telecommunications Regulation is the awarding authority. A number of future network operators emerged as a result. Esat Telecom Group, a 45% shareholder in Esat Digifone and value added service provider was floated on the Nasdaq stock exchange in the US, in November, raising $78 million. Esat Telecom currently has over 3,000 customers in the corporate market. Esat Telecom is constructing a number of fibre-optic rings in Dublin and other Irish cities. The company is also developing ATM infrastructure. TCL Telecom, an Irish VAS provider, was bought by WorldCom in 1997. WorldCom Ireland, like Esat Telecom is constructing a fibre-optic ring in the City of Dublin. The State-owned Electricity Supply Board (ESB) has announced a joint venture with British Telecom (BT). The new company, Ocean, is a 50:50 venture between BT and an ESB subsidiary (ESBI) that has a 40% stake from the US insurer American International Group (AIG). has now commenced service delivery. The company is initially targeting large corporate customers. The company will have immediate access to the ESB's digital microwave network and the electricity supply network, with significant investment planned in developing a fibre optic network. Additional holders of licenses to establish telecommunications networks include Unisource Carrier Services AG (Germany), NTL Group (UK), Stentor Communications, Cable and Wireless Services, Telemedia International (part of Telecom Italia) and Cablelink. 3.6 Internet Service Providers Two company sales during 1997 led to a significant convergence between internet service and telecommunications service provision. The first of these, the sale of Indigo to Telecom Éireann in October 1997, has led to an estimated 85-90% of the market using Internet Service Providers owned by only 2 State-owned companies with the same ultimate shareholder: the Minister for Public Enterprise. Ireland On-Line, the largest Irish provider, was purchased earlier in the year by PostGem, a telecoms subsidiary of An Post while Telecom Éireann also operates the internet service provider TInet and owns a 75% stake in the Cablelink cable television company. The second sale in November 1997, saw EUnet Ireland, the State's largest corporate and longest established provider bought by Esat Telecom. Esat had previously bid for Indigo but were out-bid by Telecom Éireann. EUnet Ireland, now renamed Esat Net, is one of only two remaining commercial internet providers. Three Telecom Éireann subsidiaries, TInet, Indigo and Eirtrade, have merged administration activities. All three companies offer internet services. While Eirtrade, launched in May 1996, offered corporate services, both TInet (December 1996) and Indigo (bought in October 1997) operate in the small business and consumer sectors. Net Results, a Dublin company, has introduced ‘Net Direct’ a satellite internet service offering download speeds of 400kbps. Cable TV operator Cablelink has announced plans to deliver high speed internet services in Dublin by the end of 1998. Speeds are anticipated to be between 2 and 3 times faster than residential ISDN services. The new service will require the investment of EUR 6.3 million over the next three years (Irish Times, July 23 1998). 3.7 Broadcasting Service Providers There are currently three State-owned terrestrial television channels in Ireland. Radio Telefís Éireann (RTÉ) operate two channels, RTÉ1 and Network 2, while Teilefís Na Gaeilge (TnaG) commenced service in October 1996. TV3, a new and independent terrestrial television station, commenced broadcasting earlier than planned on Sunday, September 20, 1998, although the original broadcasting license was granted in 1989. TV3 is 45% owned by the Canadian broadcaster CanWest Global, 20% owned by the Windmill Lane group of Irish investors, with the remaining 35% placed with ACT venture capital group. Start up investment is though to be in the region of EUR 25.4 million. 85% of households were expected to be able to receive TV3 at start up. The station is targeting the 15-44 year age group and looking for 6% of the audience, taken from RTÉ and UK channels. Penetration of multi-channel television in Ireland is high, with both cable and MMDS (microwave distributions systems) offering British terrestrial channels and, in some cases, satellite services. Cablelink, owned 75% by Telecom Éireann and 25% by Radio Telefís Éireann, is the largest cable television provider in the State with 340,000 subscribers in Dublin, Galway and Cork, and a penetration rate of 80% in Dublin. The Minister of Public Enterprise, Ms Mary O'Rourke, outlined proposals for the sale of Telecom Éireann's stake in Cablelink to the Cabinet on April 7, 1998, however there are now questions over the sale due to regulatory changes. In confidential papers for prospective purchasers, Rothschild & Sons, the advisors to Telecom Éireann and RTÉ stress "high average penetration across its franchises with a monopoly in the largest franchise, Dublin" and "significantly higher basic cable revenues per subscriber than comparable European high-penetration cable markets". These are likely to be the subject of regulatory changes. The value of the company is suggested to be between EUR 178 and 254 million, with a need for substantial investment for upgrading of around EUR 152 million, Telecom and RTÉ will retain the proceeds of the sale. Other major providers include NTL Cabletel which has 62,000 subscribers and 28 cable and MMDS franchises, and Princes Holdings, part owned by Independent Newspapers. Cabletel and Princes Holdings are suing the State over a failure to eliminate the use of illegal MMDS deflectors. The two companies state that they were given exclusive licences to rebroadcast television programmes. Cabletel has also announced an upgrade to its service in the Swords/Malahide area of Dublin to offer 10,000 subscribers two-way broadband internet access. Cabletel are also exploring the provision of telephony services with PostGEM. Work commenced in summer 1998. II. Changes and adjustments over the last three months (October-December 98) 1. Framework Legislation: Copyright and Intellectual Property Rights The second bill to fully reform copyright legislation is now in draft form and has been circulated to selected bodies for comment. 2.1 Telecommunications Regulation and Liberalisation The market for telecommunications services was liberalised on December 1, 1998. 22 'General' telecommunications licences and 8 'Basic' licences have been awarded by the Director of Telecommunications Regulation. The 'General' licence permits the holder to provide telecommunications networks and services, including voice telephony; the 'Basic' licence does not include voice telephony or services involving the allocation of numbers. In preparation for liberalisation, Telecom Éireann significantly reduced its pricing in a number of areas and its interconnection rates were cut by up to 40% following an announcement on November 17, 1998. The new rates cost on average between EUR 0.76 cents and EUR 1.17 cents per minute. An external review of Telecom Éireann’s accounting system was to be completed by late autumn 1998. It is expected that this will assist the Director of Telecommunications Regulation to assess its universal service obligation and finalise interconnect rates, although the ODTR states in it's review and work programme that a "substantial on-going programme on cost accounting issues will be continued into 1999" (ODTR Review and Work Programme 1998-9). The earlier introduction of full market liberalisation significantly compressed the ODTR’s schedule, although there remains a significant workload to ensure adequate number availability and portability to different service providers. Dublin Corporation (the local authority for Dublin city) has implemented a new roadworks regime that promotes trench sharing by telecommunications companies. The director of Traffic, Mr Owen Keegan, has stated that the "proliferation of new telecom companies - each competing with the others - was one of the major causes of traffic disruption in the city". Companies which refuse to abide by new guidelines will face a "moratorium" on digging up designated streets with a "time penalty" of 1 year of more. The Corporation has appointed a telecom project management company, CGI, to plan, manage and market a shared-duct network. A decision by the European Commission Directorate General IV (Competition) regarding ownership of and access to Electricity Supply Board (ESB) infrastructure was published in October 1998. Ocean, a joint venture between the ESB and British Telecom, had sought a transfer of ownership to it, or exclusive access. These were denied, leaving the ESB free to permit access by other telecommunications companies. 2.2 Telecommunications Advisory Committee The independent advisory committee launched its report on November 18, 1998. ,The report notes progress towards developing an advanced digital economy, describing Ireland as "Europe’s premier knowledge economy" which has "developed strengths" in software, electronics, financial services and pharmaceuticals, notably through education and training. Four key areas were identified as needing to be addressed to make the State an ‘e-commerce hub’ :
The following recommendations are among the 10 made :
The full report is available at http://act.iol.ie. Following the report, provision was made in the Budget for 1999 for a EUR 15 million public-private partnership to improve Ireland’s broadband connectivity with both Europe and North America. The Department of Public Enterprise is currently seeking to "pre-qualify" international fibre optic infrastructure providers to participate in negotiated procedures leading to the awarding of a public works contract. The Minister for Arts, Heritage, Gaeltacht and the Islands, Ms Sile de Valera, has appointed a completely new 10-member board to the Independent Radio and Television Commission (IRTC). No existing board members were re-appointed ; the new board has a 50 :50 gender balance, no direct industry representation and will take office from October 17, 1998, for a period of 5 years. The IRTC is to be expanded with responsibility for broadcasting complaints, licensing new digital services and setting standards. Esat Digifone has launched a pay-as-you-go service in the run up to Christmas, to compete with Eircell’s Ready To Go service. Titled ‘Speakeasy’, 2 different tariffs are being offered: ‘Night Owl’ and ‘Early Bird’ favouring, respectively, evening or daytime usage. Fixed Telephony Services Both Esat Telecom and Ocean are now offering a full fixed telephony service, including for residential customers. Both new services offer per second billing and free itemised billing, services likely to be introduced by Telecom Éireann in 1999, and an auto-router has to be installed in customers' homes or premises. Esat Clear is targeted only at Telecom Éireann customers whose bills exceed EUR 127 every two months. This may well be a result of the limited penetration of the Esat network (in common with that of all other operators other than Telecom Éireann), but it has led to a convenient cherry-picking strategy that will not extend the penetration of fixed telephony services either directly (by increasing the number of users) or indirectly (by reducing the cost of line rental or installation). The Esat Clear terms include a local call rate for the whole of Ireland, volume discounts, and no contract or minimum signing-on fee. Telecom Éireann is disputing Esat's claims that its pricing structure is 10-15% cheaper than Telecom Éireann's. Ocean Link requires an initial EUR 25.39 subscription (refundable if more than EUR 190.46 worth of calls are made in the first 6 months) and does not offer local calls via auto-dialler, but is available to all telephone subscribers. Ocean has also entered into a 4 year EUR 91.4 million agreement with Lucent Technologies to build its network, linking Dublin, Belfast, Cork, Limerick, Galway and Waterford. Ocean is investing more than EUR 150 million in the Irish market. Telecom Éireann has also announced that it will change name to ‘Eircom’ as part of an overhaul of it’s image and identity in advance of a public share offering in spring 1999. The size of the government stake to be sold is expected to be around half of its 50.1% stake. A Postal and Telecommunications (Amendment) Bill, 1998, is to presented to the Dáil in early 1999 to facilitate this. KPN and Telia, both investors in Telecom Éireann, are also expected to exercise their options for an additional 15% of the company. On November 30, 1998, Telecom Éireann announced that it is to invest EUR 127 million in the development of broadband infrastructure, part of a EUR 444.4 million capital investment programme in 1999, leading to an 80% increase in high speed optic fibre available to the network. The company also commenced trading in Northern Ireland on December 1, 1998, offering services to both business and residential customers and is completing a new 2.5 gigabit submarine fibre optic cable to Britain. 3.3 Internet Service Providers Following public calls by the Minister for Public Enterprise, and discussions between Telecom Éireann and the European Commission (Directorate General IV, Competition), the telecommunications company has reduced peak time access charges and will, in January 1999, introduce service options that will permit flat-rate internet access. Additional services are also likely, aimed at weekend users, high usage customers and new users. These will include a 33% reduction in peak time connection charges. ADSL trials also began in November, 1998, offering Internet download speeds of 384 kbps, and video download speeds of 4 Mbps. On October 23, it emerged that An Post, a state company with similar legal status and ownership to Telecom Éireann, had filed a complaint with the European Commission Directorate General IV (Competition) in May 1998 regarding the interconnection rates charged to An Post subsidiaries PostGEM and Ireland On-Line. An Post is believed to allege that Telecom Éireann may charge its own internet service subsidiaries better rates or give preferential treatment, with possible cross-subsidisation and lack of transparency. Telecom Éireann has argued that it charges all internet service providers in the same way for infrastructure. Both parties referred the complaint to the Director of Telecommunications Regulation on October 23, 1998. MCI WorldCom is providing a new, high bandwidth service for ISPs through UUNET, a wholly owned international wholesale services subsidiary. Esat Telecom is offering pay-as-you-go internet account and access services as part of its Esat Clear package, for a small initial EUR 25.40 subscription. 3.4 Broadcasting Service Providers The Director of Telecommunications Regulation and cable television operators have engaged in protracted dialogue about new, 15 year replacement licences to replace those currently in operation. The proposed licences will regulate prices, permit competition after a period of 5 years of exclusivity, and will also allow the transmission of digital services, which are to be rolled out in accordance with a set schedule. It is understood, however, that the Regulator had declined to show cable companies the full terms and conditions which she proposed, until December 24. Cable companies have also objected to the licensing of illegal, unlicensed MMDS signal deflector companies, envisaged by the Regulator as a means of bringing them within the regulatory framework. The licensing issue has delayed the original timetable for the sale of Cablelink. NTL Cabletel is understood to have been approached by Rothschilds as a likely bidder. Cabletel has recently completed a EUR 38 million fibre-optic link between Britain and Ireland. 1.1 Copyright and Intellectual Property Rights The new copyright bill is expected to be put before the Dáil. The new broadcasting bill is expected to be put before the Dáil. The Telecommunications (Amendment) Bill, permitting the sale of Telecom Éireann will be put to the Dáil. Further legislation to extend the role of the Director of Telecommunications Regulation is also expected. 2. Regulatory Issues 2.1 The Office of the Director of Telecommunications Regulation The conclusions of the ODTR’s Task Force on long term numbering do not yet have a deadline for finalisation. Northern Ireland access numbers from the State are to change from July 1999, coinciding with the introduction of a single access code for the area by the UK telecommunications regulator. The prefix 048 will be used for all Northern Ireland numbers with the existing 080 being phased out, ending in mid 2000. Failed third licence applicant Orange Communications is taking legal action against the Director of Telecommunications Regulation. A court case will not be heard until March 1999, and commencement of service by the approved licence holder, Meteor, is delayed as a result. The telecommunications market is expected to grow substantially during 1999. Gross National Product is forecast to grow at 6% in 1999, with telecoms market growth possible at 5% over GNP. While the mobile telephony market has grown substantially, to almost 20% of the population, the small to medium sized business telephony market is still thought to be underdeveloped. Carrier pre-selection is to be available to all telecommunications users by the beginning of 2000. This will make auto-diallers, currently required to avail of services from new voice telephony providers, obsolete. The European Commission is expected to announce the outcome of its investigation into interconnection costs. The Commission has published its ruling that Telecom Éireann had abused its dominant position by overcharging for access to its network. However, the determination of an expected fine is understood to be delayed because of difficulties over assessing the responsibility and liability of the Irish government at the time of the original complaint in 1994. 3.3 Internet Service Providers Ireland On-Line, the State’s largest internet service provider, and the US Networks Telephony company are to launch an internet telephony service, offering long-distance calls over a private Internet Protocol (IP) network. 3.4 Broadcasting Service Providers The sale of Cablelink is expected to proceed once the licensing issue is agreed and a value on the company can be set. Cable companies have been invited to respond to proposed draft replacement licences by January 11, 1999. |
