Thursday, 19 October 2000
Dáil Eireann Debate
4. Mr. O'Shea asked the Minister for Public Enterprise the proposals she has to ensure fair competition between the Eircom copper network and cable television network with regard to the provision of telephony, Internet and television services; and if she will make a statement on the matter. [22711/00]
Mrs. O'Rourke: The Director of Telecommunications Regulation is carrying out a public consultation at present on whether the delivery of television services is appropriate or even possible over telecommunications networks such as Eircom's copper network using certain new technologies, known as xDSL. Obviously, that is happening now, so I cannot comment on what Etain Doyle will produce.
The increasing convergence between the broadcasting, information technology and telecommunications sectors will have a significant influence on the development of regulatory policy in this area. It is an objective of the European Community's policy relating to electronic communications that there should be fair competition between all available platforms and in the provision of services over those platforms. The European Commission has published a package of proposals setting out a new regulatory framework for the electronic communications sector. Discussions on these proposals have begun within the Council and the European Parliament.
Mr. O'Shea: Does the Minister not agree that the position developing would be unfair on Eircom in the context of convergence? Eircom will have to unbundle its local loop but there is no such obligation on cable television operators in terms of their fibreoptic cables. I am sure the Minister agrees that fibreoptic cables have much greater capacity. Cable television companies can cross-subsidise telephony, broadcasting and Internet services, a facility which is not possible with Eircom's fixed copper network. As a result, cable operators can offer a package which provides a telephony service at a low rate which destroys Eircom's market.
Mrs. O'Rourke: Two issues arise from the Deputy's comments, both of which involve elements of the truth. The issue of unbundling the local loop has gone to the European Parliament  which will complete its consideration of the matter this week. The issue will then go back to the Council of Ministers on 22 December for ratification. Two matters arise from this. First, whether Eircom will get a proper return in modern terms for the infrastructural cost of installing the copper wiring and, second, the percentage rate of return over that cost. The regulator, Etain Doyle, is pursuing this matter with the intention of fixing a fair price.
The second issue involves NTL's geographic spread. This is a real issue as NTL, and not Eircom, is the dominant entity in some urban areas. This is a matter for Etain Doyle but I will have an input into the policy issue of how that is devised.
The other issue raised by the Deputy is very important. Eircom, like other operators, has a telecommunications licence which does not allow the company to provide television services over its network. However, the company has said it would like to provide such a service and has set this as an objective. Two difficulties arise from this. First, it is uncertain whether it is technically feasible to provide television services over a copper network using the DSL technologies. Second, the use of Eircom's copper network for the provision of this type of service may or may not be seen as infringing a cable operator's exclusive franchise. Etain Doyle has sought public consultation on these issues and received replies. She is examining the situation and will announce a judgment. This is a difficult situation but a solution will have to be found if it proves unfeasible to use the copper network.
Mr. O'Shea: From her response, I take it the Minister concedes that, in the context of telephony as part of a cable operator's package – one convergence package has already been announced – this puts Eircom at great risk. This is an urgent situation and the equity issue has to be addressed. The copper network's capacity for transmitting television signals would be restricted, at best, to one or two channels over a short distance. This is a real problem for Eircom and its fixed copper network. The issue of cross-subsidisation has to be addressed in the context of the cable television operators.
Mrs. O'Rourke: The basic premise of the Deputy's comments is correct. There is a real issue if Eircom is disadvantaged by virtue of having the copper network, while another provider is advantaged, and if there is cross-subsidisation of  services by a second provider. Allied to the unbundling of the local loop this would place Eircom in a doubly disadvantaged position. The Deputy has done some work on this as his information is very up to date. The regulator will brief me on these issues and I will ask her to also update the Deputy on the technical details.
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