Decision's effect will be to delay 'unbundling'

The downcast look on commissioner John Doherty's face as yesterday's High Court verdict was read out in court 21 reflected the scale of the defeat inflicted on the communications regulator.

Mr Doherty, one of the three commissioners at the Commission for Communications Regulation (ComReg), has in the past complained of the body's lack of power to compel firms to comply with its orders speedily. This now looks unlikely to change anytime soon given the comprehensive ruling of the court in favour of the right to appeal its orders.

The crux of Eircom's case, which was accepted by the judge, was that it had the right to appeal orders from ComReg to a newly-created Electronic Communications Appeals Panel (ECAP).

Earlier this year Eircom had sought to exercise this right by appealing a decision by the regulator to force it to negotiate new access terms with rivals to allow local loop unbundling - a process of offering access to its network.

However, in an effort to speed up implementation of "unbundling" ComReg had sought to circumvent this appeal by forcing Eircom to negotiate with rivals prior to an appeal being heard.

In court both sides debated the correct interpretation of a slew of complex telecoms regulations and the legislation governing the establishment of ECAP, which only recently heard its first case.

ComReg, which had previously lobbied against the formation of ECAP, fearing it would create legal uncertainty, lost on all the main legal arguments.

In his judgement, Mr Justice Liam McKechnie said Comreg had acted unlawfully.

There was also some implied criticism of the Minister for Communications for not asking the appeals panel to hear the case prior to the judicial review case.

The verdict is a significant victory for Eircom, which regularly does battle with ComReg in the courts. But it also represents a huge boost for ECAP, which cannot now easily be circumvented by ComReg's orders.

Unsurprisingly, Eircom was delighted with the judgement, with its commercial director, Mr David McRedmond, declaring it was proof that Eircom was not just trying to delay "unbundling".

Rivals such as Smart Telecom, which has the most to lose from a lengthy delay to "unbundling", expressed concern about further delays to the process.

Eircom will now appeal ComReg's new plan for "unbundling" to ECAP, a move that is likely to delay the implementation of the new regime for several months.

Despite evidence submitted to the court about the merits of "unbundling" and ComReg's new plan to make its easier for rivals to access Eircom's network, Justice McKechnie restricted his judgement to the right of appeal.

ECAP will now probably have to grapple with the complex issues raised by ComReg in its plan to encourage "unbundling".

In this substantive matter Eircom will face a much tougher task convincing legal and technical professionals that its opposition to "unbundling" is justified.

So far less than 3,000 out of more than 1.6 million telephone lines in the Republic have been "unbundled" for use by Eircom's competitors. This is despite an EU regulation mandating access to the incumbent firm's networks as far back as early 2001.

Firms such as Smart Telecom face severe difficulties in gaining access to Eircom's infrastructure and transferring customers to their own broadband products.

For example, any customers wishing to sign up for a unbundled broadband product from Smart Telecom have to change their phone number and face loss of their existing Eircom telephone service for several days before they can take up the service.

Problems also exist transferring customers who already use broadband products and transferring users in high volumes.

The lengthy delay in creating a viable "unbundling" regime is one of the most critical problems facing the adoption of broadband in the Republic. Without gaining full access to Eircom's infrastructure rivals are forced to repackage Eircom's own broadband product rather than being able to launch their own innovative services.

Yet no matter how frustrated ComReg or rivals feel about delays, yesterday's judgement will mean that firms have the right to appeal regulatory decisions to the appeals panel ECAP.

Such appeals will most likely take up to six months to complete and will lead to a further delay in the implementation of a viable unbundling process.