Tuesday 21 November 2017

ComReg's Fahy on 5G, Eir and the future of our communications

Should mobile operators face new geographic coverage obligations? Can the winner of the National Broadband Plan be effectively policed? Could Eir be broken up in future? How soon will 5G arrive? Gerry Fahy sits in one of the most influential positions governing Irish infrastructure. As the chairman of ComReg, he and his fellow commissioners exercise far-reaching powers over our phone and broadband futures. He spoke to Adrian Weckler about some of the biggest issues that are currently facing the country.

Gerry Fahy says ComReg would not support European Commission proposals for a relaxation of the regulatory environment. Photo by Adrian Weckler
Gerry Fahy says ComReg would not support European Commission proposals for a relaxation of the regulatory environment. Photo by Adrian Weckler
Adrian Weckler

Adrian Weckler

Adrian Weckler (AW): Assuming that the National Broadband Plan is finally completed, what does that mean for ideas such as minimum levels of service enforced by your agency, including the universal service obligation (USO)?

Gerry Fahy (GF): That remains to be seen. The flip side might be more interesting. Let's say the NBP isn't rolled out and there is a deficit in broadband. In that case, a broadband USO might be considered.

For example, in other markets where there is no NBP in play, the Government and regulator might say that the regulatory requirement is that there is a right to a minimum level of broadband. What that level might be would have to be established.

And then the question would be who is going to provide it. Interestingly, in the last year, the Swedes identified the minimum human right for access to broadband as five megabits per second. They determined that you need to be able to do your banking and your email and interact with government services. Netflix and 4K TV is not a human right, they determined.

But they say that five megabits is enough. In the UK, they have identified 10 megabits, but I don't think that's going anywhere right now, it's just a stake in the ground. So in future, that process of identification might make up what a broadband USO would be. But we're not in that space here because the National Broadband Plan is attempting to solve that deficit.

AW: What will happen about policing whichever telecoms operator wins the National Broadband Plan tender?

GF: Regulation always exists, regardless of a contract. A contract can't override that. The NBP is intended as a 25-year contract with various terms and conditions. That will sit with the Government, not us. But let's say one operator won all of the NBP contracts. The question might then arise in a regulatory context of whether that operator is dominant in that area and whether they would attract regulatory-dominance obligations. That could certainly potentially arise.

AW: Mobile phone coverage is still a controversial topic in large parts of the country. What progress are you making in measuring operators' signal performance?

GF: A number of things. We're going to be building a comprehensive composite coverage map, using a prediction tool and data provided by the operators. We'll verify that with testing to make sure the predictions are verifiable. And then we'll publish this on the ComReg website. So someone will be able to check what reception is like from operator A, B, C and D in different locations.

We also intend to have handset-sensitivity information. This will hopefully help to tell whether certain handsets improve or disprove your coverage on average. We're currently testing about 60 handsets.

Preliminary results, borne out by other tests in Europe, indicate that the hand you hold your phone in makes a difference because the antenna orientation changes and the antenna may be particularly good on one side or the other. Your hand might be covering the antenna, where it didn't before.

You'll remember previously the story with the iPhone and Steve Jobs when this cropped up and he said: "Just hold it like this"? That continues generally to be an issue. These handsets are listening to more bands and trying to do more things.

So there's a bit of a technical compromise going on.

AW: How soon will it be until we have 5G mobile services in Ireland?

GF: The real 5G happens in a different radio interface, which won't happen before 2020, I'd say. You might find that 5G is about things other than handsets, which might go for a long time on 4G Plus Plus Plus.

Before that, I think that we'll get really fast and capable 4G networks that could deliver hundreds of megabits per second, especially when you combine slices of different spectrum that operators are acquiring.

AW: Will new licences be needed?

GF: We don't license by technology, we license by spectrum. The 3.6Ghz spectrum we recently licensed is usable for mobile broadband and rural broadband but in future it can be used for 5G as well.

AW: But we had auctions for the spectrum that really enabled 4G. Can we expect similar auctions for when the technology is ready for 5G?

GF: We don't make those decisions until we arrive at that point of time. But that wouldn't be an unreasonable speculation to make.

AW: In fairness, mobile auctions are a decent source of income, aren't they?

GF: Well our objective isn't to generate income out of it. We have no remit to raise money. Our remit is that the spectrum gets assigned to those who value it most.

AW: Last year, the Communications Minister expressed an ambition to make the next mobile operator licence contingent on 100pc geographic coverage. As the entity licensing the operators, is this on the cards?

GF: We're looking at this and other issues. But 100pc geographic coverage is probably one of those things that, if it is to be delivered, probably needs some support from Government. It's a bit like the National Broadband Plan.

There is a level of coverage that is commercially deliverable and then beyond that it is society's job to close that gap. Even if you gave away the licence for nothing, what would companies do to the extent that it is commercially possible?

AW: So does ComReg need some sort of extra mandate or policy decision from the Government for 100pc geographic coverage to happen?

GF: We can identify that geographic coverage is important but I don't think that ComReg should be the arbiter of which element of geography is more important than other elements of geography.

For example, if you can't achieve 100pc, what are the priorities? Is it be the roads? The railways? The greenways? The industrial zones? Putting those in priority order would be an important piece of policy input. And I think it would be wrong for ComReg to make that choice. We need input on that choice.

AW: Taking a step back, what's your view on the immediate future regulating telecom companies in general?

GF: There's a new regulatory code being debated with the (European) Commission and we have some concerns about it. It could change things quite a bit. [Editor's note: the Commission is proposing that national telecoms regulators like ComReg might regulate operators with a lighter touch in order to encourage more investment in futuristic networks.]

Our general view is that things are pretty good the way they are, as near to optimal as you can get in a regulatory sense. There's a obviously a strong incumbent telecom lobby getting at the Commission's thinking, as well as a strong mobile-operator lobby. And so we think that the relaxation of government regulation implicit in the new (Commission) proposals is something we wouldn't be comfortable with. We don't think it's fully thought out.

AW: What is the risk that you're worried about in relaxing regulation?

GF: The risk is that the incumbent would behave in ways that would be perhaps not conducive to improve competition and the regulator wouldn't have the tools or the powers to do something about it. This is also a view reflected by other regulators in Europe.

AW: Why do you think this is happening now? Is it because of new financial pressure on operators through developments such as the end to mobile roaming fees?

GF: That could be part of the overall environment. But we would see this as an excessive focus on the incumbent as being the only vehicle for investment.

As we've seen in Ireland, you have others, such as Siro and eNet, investing in fibre. So there's a balance between investment coming from the incumbent and from alternate sources. And we think the balance is being tipped slightly in favour of the incumbent in the way the Commission is thinking.

AW: So what can you do?

GF: ComReg contributes to the debates and thinking in Berec (Body of European Regulators for Electronic Communications). Berec is a broad church but there's a surprising degree of unanimity around those sorts of issues.

Obviously Berec has credibility among the various stakeholders, such as the Commission and others. We'll see where it lands.

AW: Turning to the incumbent here, you recently published a report identifying "serious concerns" over the "quality of Eir's regulatory governance". What do you see as the immediate future for Eir's governance?

GF: We've indicated a significant degree of unhappiness with what we've found.

To be fair, we wouldn't have found those issues if Eir hadn't been open to the process. So Eir has been very open to the investigation and the work our consultants are doing.

Eir has indicated that it will be bringing forward new proposals. Whether those proposals are fit for purpose remains to be seen. Perhaps there is a landing point there that we can reach. If not, then there's a potential for collision with Eir.

AW: One of the recommendations from your commissioned consultants on this was the establishment of an independent oversight body within Eir, the majority of which could not be made up of Eir executives or staff. Would that be enough?

GF: I think that's certainly the sort of thing that will be looked for. What we've seen is that where Eir is managing its own governance, it hasn't worked out as it should do. So therefore a degree of independent oversight is something that would be essential, in our view. As to that body itself, its remit would be important.

Would it have the ability to bring in its own consultants to do work for itself independently? Or would it depend entirely on Eir's approval for that? So it's not just having a body, it's what powers and remit that body would have and how truly independent it would be. So those would be important characteristics.

AW: Would you consider a greater degree of separation between Eir's wholesale and retail arms?

GF: I think all options are on the table at the moment. But the more you go towards full separation, the more problematic that becomes and the more challenging it is for an organisation of Eir's scale.

Even if you look at the UK, which is the most advanced example of this sort of separation process in Europe, it hasn't quite gone to full separation (of incumbent telecoms operator BT). They went through a process recently and they stopped short of it.

Ofcom accepted proposals from BT in relation to the improvements that they were going to make to the independence of the organisation there.

So it's a journey and we're in the middle of a process. Let's see where we get to.

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