Oireachtas Joint and Select Committees

Wednesday, 5 June 2019

Joint Oireachtas Committee on Communications, Climate Action and Environment

National Broadband Plan: Discussion

Mr. Jeremy Godfrey:

As regulator, we care a lot about monopolies or, to use the technical term we use, where there is "significant market power". It matters much less to us whether it is a private or publicly owned monopoly; we regulate in exactly the same way in either case. Our role is to make sure that if there is an entity with significant market power, it is not allowed to abuse that market power. We are concerned to ensure it cannot use its power to prevent competition in downstream markets and expand the scope of its monopoly beyond where it naturally arises.

In rural areas, it is not a commercial proposition even for one network to be deployed. The Government subsidy scheme is there to ensure that there is one network. Inevitably if there is one, it is an monopoly. The state aid guidelines recognise when there is a market failure and a Government intervention that will create a monopoly. That is a phenomenon not only in Ireland but in all the other markets across Europe where there have been public interventions to provide broadband. The state aid guidelines effectively require the state, the Irish State in our case, to put in place provisions in the contract that look very similar to the sorts of remedies a regulator would apply if it found significant market power in the commercial area. That is why it must be a wholesale network that is provided. It must be open to the participation of third parties, non-discriminatory in the way it treats the retail service provider and open to reasonable access requests and so on. Some of the provisions in a contract, given the state aid rules, look quite similar to a ComReg decision that imposes obligations on an operator with a significant market power. As a regulator, we are used - as the Deputy stated, this is core to our job - to looking for where there is significant market power and putting in place remedies to mitigate the impact of that significant market power. It is an inevitability in the telecoms industry.


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