Watchdog against Eircom television

Eircom should not be allowed to provide television services over telephone wires until it has opened up its network to full competition, the Competition Authority has said.

In a recommendation to telecoms regulator Ms Etain Doyle, the authority warns problems may arise if companies with market power are allowed sell bundled services which include telephony and television.

Eircom is seeking a licence from Ms Doyle, which would enable it to offer television services over its own network using asymmetric digital subscriber line (ADSL) technology.

This technology offers very high-speed Internet and multimedia services at speeds up to 30 times faster than levels possible over traditional copper wire telecoms networks.

The Competition Authority's submission to Ms Doyle expresses concern that operators with market power might engage in anti-competitive practices such as:

excessive pricing of telephony services;

pricing of telephony services, or bundles of services, at an uneconomic level with a view to expanding their market position in the telephony market;

leverage of market power from telephony into other markets, for example by a refusal to supply telephony services independently of other services.

The report concludes: "Consideration should be given to withholding a licence to provide programming services from Eircom unless and until the local loop has been unbundled."

This recommendation, which links Eircom's ability to provide television services and the charges it imposes on operators to provide services, may force compromise in the unbundling debate. Eircom wants to charge a monthly fee of €32.50 (£25.60) and a connection fee of €484 for using its network. These charges are among the highest in the world and will prevent competitors from offering cost-effective services.

The regulator has already expressed disappointment with Eircom's charges and is conducting a review which could lead to regulatory intervention. Eircom is involved in ongoing negotiations with Ms Doyle in the unbundling debate and on the issue of whether it can offer television over its network.

In submissions to the regulator, Eircom has told Ms Doyle its inability to deliver television services would "cast doubt" on the viability of its investment in ADSL broadband services. An Eircom spokeswoman confirmed yesterday the firm would have to reassess its plans if the regulator said no.

"Our business case is predicated on an assumption that we will not be discriminated against," she said.

The regulator is conducting a major review of ADSL technology and is expected to rule on whether Eircom should be allowed to offer television services within months. However, legal complications may also play a role in this decision.

Cable firms NTL and Chorus have exclusive rights to broadcast television pictures over socalled "equivalent systems". It remains unclear if this exclusivity applies to telephone networks or just cable networks.