Tuesday 18 September 2018

Telecoms watchdog ready to roll out vital broadband verdict

Who will regulate the National Broadband Plan? Will Eir have to support rural services? What about Ireland's 'mobile map'? ComReg commissioner Jeremy Godfrey speaks exclusively to Adrian Weckler

Watchdog: ComReg commissioner Jeremy Godfrey is liaising with the European Commission on regulation of the wholesale broadband market and pricing
Watchdog: ComReg commissioner Jeremy Godfrey is liaising with the European Commission on regulation of the wholesale broadband market and pricing

Adrian Weckler Technology Editor

Ireland's telecoms industry is entering its most critical period of change since the Government privatised Telecom Eireann 20 years ago. Seminal issues include radical plans from Eir's new owner to overhaul its network, the future of landline competition and an unprecedented, State-backed rural broadband rollout to 540,000 Irish homes and businesses.

Sitting in judgement is the telecom regulator, ComReg. The decisions it takes in the coming months will have a lasting effect on the lives and businesses of millions in Ireland for the next decade.

Jeremy Godfrey is currently ComReg's sole serving commissioner, and speaks here exclusively about the heavyweight issues he must soon adjudicate on.

Adrian Weckler [AW]: The scope and range of ComReg's regulatory duties have mushroomed in recent years. Do you believe that ComReg is adequately staffed?

Jeremy Godfrey [JG]: We are vulnerable with the number of staff we have at the moment. The remit of ComReg has expanded over the years. The complexity of the markets, the amount of money at stake with ComReg decisions. We have 60,000 enquires from consumers every year.

We have about 25,000 different issues that we work with on behalf of consumers, on behalf of operators. We run spectrum auctions. It's a very, very broad remit. With more resources we could do our job better and do things faster. There would be less risk of delays.

AW: Have you asked for more staff?

JG: We are in contact with the Government about what we think the right level of staff would be.

AW: Have you suggested a number?

JG: I won't comment on any precise number. Obviously there are other factors here, relating to the size of the public sector and governmental policy.

We're worried about what we need to do our job and we are telling them what we think we need.

But we also expect that we won't necessarily get everything we ask for.

AW: One current flashpoint in Ireland is Eir's new rural fibre broadband network. It says it will have 330,000 rural premises connected by next June. But major rival operators like Vodafone and Sky say that Eir is charging too much to access it for them to offer competition. Is ComReg looking at this issue?

JG: Yes. We will certainly be proposing quite substantial changes to Eir's ability to choose what the connection charge should be. When we consulted on it, we said we didn't like that charge and we didn't think it was justified and we proposed some significant changes. That will be notified to the European Commission with all the other pricing stuff.

AW: What about wholesale broadband pricing generally?

JG: This is a very high priority. In terms of what we're looking at the moment, the big project has been the regulation of the wholesale broadband market.

That's probably the most fundamental market in Ireland. It underpins the bundles of broadband and voice and, often television, to many, many consumers.

Our regulation of that market is fundamental to allowing competitors like Vodafone or Sky to use the Eir infrastructure to compete.

We've had some concerns over wholesale product development, about discrimination and fairness.

We've taken some compliance cases against Eir as well. There have been loopholes in previous rules such as service level agreements. That's taken some time to resolve. But we're reaching the end of that process.

There are three decisions we're making.

One is a fundamental decision about whether there's significant market power and what the shape of the remedies should be.

We've considered the results of a public consultation, we've revised our proposed decision and we've notified that to the European Commission. They've come back with a small number of comments.

We're about to notify on the other two decisions which are to do with pricing. That will happen in another two weeks and then the Commission will have a month to get back to us.

I expect those decisions to be made well before the end of this year.

Eir has to be transparent about its network and not favour its own service.

We have decided that there should be a price control, both on fibre to the kerb and fibre to the home and then how bundles should be treated.

The last piece of the jigsaw is what the price should actually be. But we'll wait till we get the Commission's comments and then we'll do them together.

AW: Have companies such as Eir been notified yet?

JG: We consulted on the pricing levels. In the light of what the companies said to us, we made some changes.

We haven't notified the companies of those changes.

When we notify the Commission, the notification becomes public.

At that point everyone will see what we're proposing. Our formal notification comes when we make the final decision and then we formally notify the company, which is Eir.

AW: While we're talking about Eir, are you any closer to a conclusion over how Eir should be governed in future?

JG: As you know, there was an audit of Eir's regulatory governance carried out with serious inadequacies found.

We've been clear that those inadequacies should be remedied. We are now in discussions with Eir about proposals that they are making to improve matters and that's in the context of a possible settlement of legal actions that are ongoing at the moment.

If those discussions are successful, then I think we'll see a very big improvement in Eir's regulatory governance quickly.

And that will give all the operators in the market a very high degree of confidence that they are going to be treated fairly by Eir and that they won't be discriminated against. But you can't rely on discussions reaching agreement. If we don't get it, we will end up consulting on the use of regulatory powers to secure those improvements.

But that would be a longer process, so it would be desirable to reach agreement.

AW: Are you optimistic about it?

JG: Well we're still in discussions. We're next in court with Eir on the eighth of October. I think we will either be very close by then or we'll know that we're not.

AW: Will ComReg intervene in the standoff between Eir and Enet, which is complaining about the cost of accessing Eir's rural network infrastructure to make the state-sponsored National Broadband Plan work? Eir says this is a regulated price from ComReg.

JG: No, we set a maximum price that it is allowed to charge. Eir is perfectly entitled to charge a lower price than that maximum if they want.

We've made it very clear to them that if they choose to charge a lower price in the context of the NBP, that those are unique circumstances and that it wouldn't necessarily follow that they may then have to charge the same price to everybody else for much more limited access to poles in different circumstances.

So Eir actually has quite a bit of flexibility itself on this. But we're due to look at that pricing in the next year or so anyway. Sometimes the model assumptions change and the data changes and then the price changes. But it's unlikely to change for the next year.

AW: Why a year?

JG: Because by the time we've gathered the data, assessed it, done the modelling, consulted on it, given people a chance to look at the model and come back with comments, review those comments, notify the commission and review those comments from the commission, it will typically have taken the best part of a year.

AW: On the National Broadband Plan, to what extent will ComReg be regulating the service to those 540,000 rural homes and businesses? Or are they completely under State control?

JG: We don't think it would be sensible for ComReg to duplicate provisions of the NBP contract and make the NBP contractor answer to two masters.

That said, all of the consumer protection issues are still regulated by ComReg. That will certainly continue to be the case for people living in the NBP area.

So, if a retail service provider doesn't give them proper notice of a contract change, or doesn't allow them to port their number, or hits them with hidden charges, people can come to ComReg and ComReg will take up the complaint with the service provider.

This sort of thing applies to every operator in Ireland whether they're in an urban area or NBP area, whether they're a dominant provider with significant market power or a small provider.

AW: What about other elements of regulation?

JG: Well, ComReg doesn't regulate except in cases where there is significant market power.

AW: But there will be very significant market power in the National Broadband Plan areas as there'll only be one wholesale provider there.

JG: Yes, but significant market power is based not just on your market position but also on your ability to exploit that power. So they may not be able to exploit the power because there are contractual conditions that prevent them.

In the short-term, the contract between the NBP company and the Government will address the same suite of wholesale remedies as are applied [by us] through regulation.

That's the whole design of the intervention. So we don't see that there's any point of duplicating that.

AW: Assuming the National Broadband Plan rolls out home fibre connections to 540,000 rural premises, does that not make the copper lines going into those homes and businesses redundant? What happens to the universal service obligation, requiring Eir to keep maintaining those copper lines, even where it's likely that fewer and fewer people will use them?

JG: The USO is there to protect vulnerable users, to provide a basic telephone service. Of course this can be provided over fibre, as well as over copper.

But our fundamental objective will be that people who only want a voice service can get that.

So, if people are buying a bundle of broadband and voice, we'd be a bit concerned about the people who only have a telephone line and want to keep on just having a telephone line. There must be an alternative for them.

It's not that we think you should have a right to a copper line forever.

But if a USO is justified, then they still have the right to have a telephone service.

And if there's going to be a change in technology to provide that, they shouldn't be unduly disadvantaged, they shouldn't have to pay money for the change.

AW: But if 540,000 homes have a fibre line going in, is it fair that Eir is still legally required by you to also run a copper line in there?

JG: The only obligation Eir has is to provide a service. We've said that we will look again at the scope of the USO once the NBP becomes a reality.

We're not opposed to copper withdrawal and replacement with fibre. And it's not in anyone's interest for two parallel networks to be operating at the same time.

But Eir has an obligation not to withdraw that service once it's there without ComReg's permission. The question is around the circumstances and how to manage a transition.

There has to be a replacement wholesale product so that people who move off the copper product can move onto the fibre product.

So we will need to consider whether there's a need for the USO in order to ensure that the people in the NBP area who only want a voice line get serviced.

If we do decide there's a need, we'll have to decide who should have the obligation.

AW: Telecoms Minister Denis Naughten said that ComReg will have a searchable mobile network map by the end of this year, one that will allow people to check what the coverage strength is a particular area. How is that coming along?

JG: Yes, that will be ready by the end of the year.

AW: Where is the data coming from for that?

JG: The mast data is coming from the operators. Then ComReg's own analysis will use detailed engineering models to calculate down to cells of 10 square metres.

The idea is that people can select a place and select a network and it will tell them based on ComReg's information whether they are likely or unlikely to get coverage there.

AW: There was an impression given before that the data would be updated by individuals checking in from different places to inform the map of live reception on the ground. Is that not happening?

JG: While there are possibilities to verify the data based on user experience, the crowd-sourced status is tricky to be accurate because people have different phones.

As we've seen, the antenna varies a lot. So the crowd-sourced data might not be reliable. The better engineering solution is to use the proper engineering models based on data.

AW: But that will mean it's still just a prediction, not actual data.

JG: Well we'll have the precise of the masts and the characteristics of those masts.

And the modelling will be very detailed. With these things, you want to walk before you run.

AW: Will it be available as an app?

JG: The first version will likely be a website. If we can do an app later, we might do an app. We want to do something quick rather than something perfect.

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