Sky television may be regulated in the Irish market from July 2003, under draft guidelines being prepared by the telecoms regulator, Ms Etain Doyle.
A decision to regulate Sky could enable Ms Doyle to extend her powers to control Sky's prices and the quality of its service, in a similar manner to the way she regulates cable TV operators here.
But the telecoms regulator will have no supervisory role over the regulation of content, such as the broadcast of Irish sporting events.
Previously, the Sky satellite service had not been regulated by Ms Doyle because it is based outside of the State.
This prompted accusations of discrimination from cable firms, which face strict price controls and pay a 3.5 per cent annual levy to the regulator, while Sky does not.
But under new European directives which will be transposed into Irish law over the next 12 months, all public services and networks would be subject to regulation, Ms Doyle has indicated.
Ms Doyle's position is outlined in a recent paper she issued on the EU's Authorisation Directive, which concerns how the rights and obligations of electronic services and networks will be conferred on operators.
In the paper, she states that all public networks should be subject to conditions outlined in general authorisations - a type of licence for operators that would be issued by regulators.
Ms Doyle will issue a consultation document shortly on the type of conditions that would apply for each type of service provider.
This would consider whether price controls, network roll-out obligations and a levy on operators are still appropriate in the current market.
However, a final decision on whether to regulate satellite broadcasters may rest with the European Commission, which is conducting a study of the European communications market. Its public consultation process is due to be completed by August 30th.
A spokeswoman for Sky said yesterday the firm was participating in the ongoing consultation process with the regulator and would follow developments closely.
An NTL spokesman gave a cautious welcome to the guidelines.
"We've been competing against Sky with a 7 per cent shortfall in our revenues because of the annual levy we must pay to the regulator and the difference in the VAT rates between the UK and Ireland," he said.
"We think the new EU package, if implemented, will reverse the lopsided regulation we're facing."
Sky has enjoyed rapid growth in the Republic over the past three years.
It currently delivers digital television services to 232,000 households, or about a quarter of the Irish market.
The package of new EU directives is due to be implemented by July 25th, 2003.