Regulator made errors, says 3

Hutchison 3G Ireland has accused the Commission for Communications Regulation (ComReg) of failing to undertake a proper economic analysis before making a ruling to regulate its pricing policy.

The mobile operator, which is branded 3, also told a new appeals panel that the regulator made a number of errors in coming to its decision.

Hutchison 3G Ireland is trying to overturn a decision by ComReg to designate it with "significant market power" (SMP).

By labelling Hutchison with SMP in the market for mobile termination rates - the fees that mobile firms charge other operators for terminating calls on their networks - ComReg could impose tight regulation on fees.

Last year ComReg designated all four mobile licence holders with significant market power, even though Hutchison had not yet launched its operation, 3.

Until now, the mobile phone industry in the Republic has not been subject to a price cap, although Eircom continues to be subject to strict price controls.

However, transcripts from the first ever hearing by the new Electronic Communications Appeals Panel (Ecap) show Hutchison 3G is arguing that ComReg did not undertake proper analysis before making a decision. It alleges that the regulator also made a number of errors in making its decision.

In the hearings, which were heard last month, Hutchison 3G said ComReg based its designation of significant market power on the conclusion that 3 had the sole power to determine its mobile termination rates.

It said this was an error in judgment and that, in fact, the bargaining power rested with other fixed line operators such as the monopoly player Eircom.

Hutchison 3G Ireland said that through the discovery process initiated by Ecap it could prove that ComReg never undertook a proper economic analysis before coming to its decision on SMP.

ComReg defended the way it evaluated the decision to designate Hutchison 3G with SMP.

It also argued that while Eircom did have some countervailing bargaining power in the negotiation of termination rates, it did not have enough to really influence 3's setting of them.

A decision on the appeal is expected next month.