Doyle says users' interests are central focus

The Republic's new telecommunications market will be overseen in a light-handed manner, but with the interests of users as a central focus, the Telecoms regulator, Ms Etain Doyle, said yesterday. In a consultation document to prepare for voice telephony competition on December 1st, Ms Doyle says the regulatory environment will encourage new entrants to the market and penalise restrictive practises.

The paper outlines the major principles that will guide the regulator in devising a rulebook for the industry, and calls for comments from all interested parties by July 29th.

While the regulator stresses it is not a legal or binding document, the paper gives the clearest indication so far that she will take a "pro-competition" rather than a "pro-incumbent" stance.

"Users' interests will be best achieved by creating, through regulation, competitive forces to operate effectively . . . lighthanded regulation is preferred; regulation is appropriate only if it creates a benefit to telecommunications users," the document says.

Regulation may be needed, according to the paper:

to encourage both infrastructure and service competition

to create an environment that fosters innovation

to pre-empt the abuse of a dominant position in any market

to regulate retail prices if market forces are not producing consumer benefits

In the section dealing with fair trading, the paper says companies with significant market share have the potential to distort fair and open competition. This could occur through the bundling of services that consumers are then forced to pay for, charging customers excessive penalties if they choose to migrate to a new supplier, and discriminatory pricing.

Ms Doyle also says she wants to encourage investment, especially in high-capacity "broadband" infrastructure to the home which "has traditionally been expensive to provide and has long pay-back periods".

"The presence of such infrastructure is an essential ingredient in ensuring a competitive telecommunications environment," she adds.

One of the thorniest issues facing the regulator is that of universal service obligation - deciding who pays for the provision of service to remote or commercially unviable areas. Telecom Eireann has argued that all other entrants to the market should be forced to share this burden, but Esat and others insist the marketing advantages of a State-wide service outweigh the costs.

While the paper remarks that "there is an increasing recognition that universal service obligation may not be as costly a burden as was initially anticipated by incumbent operators", the regulator put off giving an opinion until after a study of Telecom Eireann's costs, due in the autumn.