European Commission vetoes ComReg deregulation proposals

The European Commission has blocked a move by communications regulator ComReg to partially deregulate the fixed voice telephony market here.

Telcos have decried the decision even though it could lead to reduced costs for consumers living in urban areas.

Alto, an umbrella group that represents all the big telecom companies bar Eir, warned that while prices may drop for some customers, they could rise significantly for those living outside of major towns and cities.

Retail fixed telephony is the service that allows users to make and receive voice calls via a landline.

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ComReg had proposed to lift regulation from the retail market and to partially withdraw it for wholesale legacy fixed access and call origination services, which are used by operators to provide calls. The regulator had also intended to re-impose regulatory obligations on the incumbent Eir in sub-urban and rural areas, which cover more than one third of premises in the State.

The commission’s veto follows the launching of an investigation into ComReg’s plans in July.

It began the inquiry after expressing “serious doubts” over the regulator’s analysis contained in a draft version sent for approval a month earlier.

The commission had queried ComReg’s conclusion that the Irish telephony market needed measured deregulation given that most voice calls are now made via mobile. It also queried the regulator’s conclusion that Eir has significant power to harm competition.

Facilities

Alto, an umbrella group that represents all the big telecom companies bar Eir, had written to the commission in support of ComReg’s plan, noting the lack of migration facilities provided by Eir, and the overwhelming reliance of new entrants on wholesale line-rental services provided by the incumbent in order to access customers.

However, the commission has now informed ComReg that it must revisit its findings with the current regulation remaining in place in the interim.

“The commission considers that given the need for a sufficiently forward-looking analysis, the evidence provided in the draft measure is insufficient to conclude that the historic incumbent still holds significant market power and would therefore be in a position to behave independently of competitors and ultimately end users in this market,” it said.

“As a result, the commission considers that the proposed measure would have led to unnecessary continuation of regulation in a fixed voice telephony market,” the commission added.

Alto's chairman Ronan Lupton expressed concern over the ruling and its impact.

“In this instance the commission doesn’t know best unfortunately,” he said.

Mr Lupton said consumers living outside major towns and cities may see prices rise substantially as the original proposals required services originating in urban areas to effectively subsidise services in rural ones.

ComReg said it is reviewing the commission’s decision.