Liz McManus (Wicklow, Labour)
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Question 11: To ask the Minister for Communications, Energy and Natural Resources his views on the merits of functional or structural separation of Eircom; his preference regarding same; the position regarding local loop unbundling here; and if he will make a statement on the matter. [10497/09]

Seán Power (Kildare South, Fianna Fail)
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There has been some debate around whether customers would be best served by functional opening of the network or by a structural split between the retail and network divisions of the business.

Functional or operational separation involves establishing separate network infrastructure and services divisions within a company to give competing providers access to the infrastructure on equivalent terms, while structural separation can mean the complete separation of these parts into separate corporate entities.

The Minister for Communications, Energy and Natural Resources has no direct role in relation to any form of restructuring of eircom or in relation to Local Loop unbundling, the promotion and regulation of which is a matter for the Commission for Communications Regulation (ComReg). ComReg is statutorily independent in the exercise of its functions.

Eircom is a private company which must implement the corporate structure that best meets its commercial needs and regulatory requirements. In this context appropriate engagement must take place with ComReg on any regulatory issues that might arise in a functionally or structurally separated company.

Given the key position of eircom in the overall Irish telecommunications industry, the performance of the company is important in terms of overall Government policy objectives in this area. In particular, the roll out of high quality, competitive broadband infrastructure is a key priority for Government and as eircom operates an extensive network, their investment and organisational plans are of importance in this regard.

The key issue for the Minister is the implementation of an operational model that provides the optimum competitive environment and promotes investment and innovation in the development of telecoms networks. This will in turn facilitate the widespread introduction of new digital devices and applications.

More generally, the EU Commission's proposals for reform of the legislative framework for the electronic communications sector include adding functional separation to the remedy tool box of national regulators. Such a remedy would only be used where there is clear evidence that the usual remedies have been tried and failed. This proposal has been supported by Ireland as effective remedies are key to realising the benefits of a competitive market.