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ElEctroniccommunicationsstratEgystatEmEnt:2017 – 2019

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2/3 Electronic communications strategy statement: 2017 – 2019

Foreword 7

executive summary 10

Trends and Challenges 12

strategic Framework 13

01 introduction 20

Why telecommunications markets need regulation 22

Our vision for the communications sector for the next five years 23

Our role, mission and values 24

Our strategy 25

02 the Economic and legal context 28

The economics of electronic communications 30

The legal context 32

03 trends and challenges 36

end-user experience: The rural/urban divide and other demographic factors 39

The electronic Communications eco-system and Related markets 44

The Internet of Things (IoT) 46

evolving Networks 49

evolving Regulation 52

04 comreg’s strategic intents 56

Competition 59

Protecting and informing consumers 59

Creating conditions for investment 60

enforcement and compliance 60

Organisation 61

05 setting the rules for Effective competition 62

Introduction 64

Competition in Fixed and mobile markets 65

monitoring markets 70

Promoting Competition and Consumer Choice 72

This is not a binding legal document and also does not contain legal, commercial, financial,technical or other advice. The Commission for Communications Regulation (‘ComReg’) is notbound by it, nor does it necessarily set out ComReg’s final or definitive position on particularmatters. To the extent that there might be any inconsistency between the contents of thisdocument and the due exercise by ComReg of its functions and powers, and the carrying out byit of its duties and the achievement of relevant objectives under law, such contents are withoutprejudice to the legal position of ComReg. Inappropriate reliance ought not therefore to beplaced on the contents of this document.

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06 Protecting and informing consumers 84

Introduction 86

Common Consumer Issues 88

The Consumer Journey 89

Communication and engagement 98

07 creating the conditions for investment 100

The Pattern of Private sector Investment 104

Facilitating Commercial Investment 107

Regulatory Incentives 111

state Intervention 117

08 Ensuring compliance with regulatory obligations 120

Culture of Compliance 126

Targeted Compliance and enforcement activities 127

effective Deterrence 128

09 Being an Effective and relevant regulator 130

Data and analysis 134

engagement 137

People and Processes 140

Resources 143

Figure 1: Home/Workplace (%) Devices Connected to FixedBroadband

42

Figure 2: Cellular m2m device connections in Ireland 2013–2025 48

Figure 3: Nga and Cga subscribers 49

Figure 4: ComReg’s strategic Framework 58

Figure 5: Regulating to Drive Competition 65

Figure 6: Retail Concentration (HHI), Q2 2013 – Q2 2016 69

Figure 7: The Consumer Journey 87

Figure 8: Breakdown of Issues Logged (Queries/Complaints), 2011 -2016

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Figure 9: Queries/Complaints Total eCs and PRs combined, 2011 -2016

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Figure 10: areas of Investment 103

Figure 11: Investment in eCs/eCN (Ireland, €million) 105

Figure 12: Investment in eCs/eCN (Ireland/eU average as % ofturnover)

105

Figure 13: Optimal enforcement 123

Figure 14: ensuring effective and Relevant Regulation 133

explanatory Box 1: market Failures 31

explanatory Box 2: The specific Directives 35

explanatory Box 3: Convergence and Bundles 45

explanatory Box 4: Predicting Future Traffic Volumes 51

explanatory Box 5: The Draft Communications Code (eCC) 54

explanatory Box 6: The Ladder of Investment 66

explanatory Box 7: markets susceptible to ex ante Regulation 74

explanatory Box 8: ever-increasing Demand for mobile Data services 80

explanatory Box 9: Consumer Behaviour 91

explanatory Box 10: Net Neutrality and Zero-rating 93

explanatory Box 11: essential and Basic services 95

explanatory Box 12: The 2012 multi-Band spectrum auction 106

explanatory Box 13: multi-agency Involvement in NRRs 115

explanatory Box 14: Public Investment in Networks 119

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FOReWORD

Investment in new networks and servicescontinued even during the severeeconomic downturn following thefinancial crisis in 2008. In that time, high-speed broadband networks covering twothirds of the population have been rolledout, 4g services have become widelyavailable, and bundles of services –involving a selection of voice, data, TV andmobile services – have become common.Daily lives have changed as a result. moreand more TV is being watched online.social media usage is widespread, andsmartphones and tablets have becomethe most common way for people inIreland to communicate and to get theinformation theyneed.

There is little sign that the pace of changewill slow down in coming years. TheInternet of Things may transform areas oflife such as transport, home security, andagriculture, by connecting objects such ascars, thermostats, cameras, alarmsystems, and soil sensors so that they canoperate intelligently without constanthuman interaction. This will place newdemands on communications networks.

at the same time, there is an increasingconsensus that the benefits of advancedcommunications should be available to asmany people as possible, irrespective ofgeographic location. a key challenge bothfor policy-makers and for independentregulation is to incentivise investment inplaces where population density is lower,and the cost to serve each user is higher.

In a networked industry likecommunications, an independentregulator like ComReg is needed to ensurethat communications markets operate inthe interests of end-users and society.Without regulation, competition wouldlikely be insufficient to drive thenecessary investment, services would beless advanced, prices would be higher,and the rights and interests of consumers– especially vulnerable users – would notbe protected.

This strategy statement examines thelonger-term context, sets out our strategicintents for the next five years, andestablishes more detailed strategies forthe near term.


Our strategic intents are:

n competition – The market deliversinnovation and the greatest possiblechoice of wholesale and retail operators

n consumer Protection – Consumerscan choose and use communicationsservices with confidence

n investment – efficient investment hasenabled affordable, high-quality andwidespread access to communicationsservices andapplications

n Enforcement and compliance –Regulated entities comply withregulatory obligations

n organisation – We are an effectiveand relevantregulator

ComReg, recognising the importance ofproviding adequately for theorganisation’s resourcing requirements,looks forward to executing this strategy,and making an important contribution toachieving our vision for the sector –that consumers and businesses inireland have affordable, high-quality,and widespread access tocommunications services andapplications that support their socialand economic needs.

kevin o’BrienCommissioner

Jeremy godfreyCommissioner

gerry FahyChairperson

FOReWORD

2017 marks thE 21st annivErsary oF irElandEstaBlishing an indEPEndEnt tElEcoms rEgulator.in that timE, thE tElEcommunications landscaPEhas BEEn transFormEd, with an incrEasinglycomPEtitivE markEt Bringing morE choicE, BEttErsErvicEs and lowEr PricEs For consumErs.



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However, in the absence of regulation, it isdoubtful if electronic communicationsmarkets would evolve in a way which meetssociety’s needs. These markets havecharacteristics (market failures) which meanthat, if left unregulated, it is likely thatinvestment would occur more slowly, thatend-users would have less choice, and thatprices would be higher.

ComReg is the regulatory authority for theelectronic communications sector in Ireland.Our vision is of a sector where consumersand businesses in Ireland have affordable,high-quality, and widespread access tocommunications services and applicationsthat support their social and economicneeds. as an economic regulator, our role isto ensure that communications marketsoperate in the interests of end-users andsociety. This document outlines who we areas an organisation and presents ourstrategy for the next five years.1

trends and challenges

efficient investment in electroniccommunications infrastructure is imperativefor future social and economic success inIreland, and connectivity is a key driver ofeconomic productivity and social inclusion.

In this context, we have identified fiveprincipal trends which are likely to shapethe sector and pose regulatory challengesover the next five years:

n non-uniform end-user experiences:accessibility and connectivity have notevolved uniformly and the experience ofend-users has not always kept pace withchanges in expectations.

n Expanding set of related marketsrelevant to the regulation ofelectronic communications: effectiveregulation requires an understanding ofthe complex electronic communicationseco-system, especially when electroniccommunications is an enabler ofinnovation in relatedmarkets.

n increase in connected “things”: Whilethe current electronic communicationseco-system focuses primarily on howpeople connect, the next wave ofinnovation is anticipated to be inrelation to connected“things”.

n continued evolution of fixed andmobile networks: Future electroniccommunications networks such as 5gnetworks are likely to have differingrequirements.

1 We also regulate the postal sector. Our vision, role, mission and values encompass both the electronic communicationsand postal sectors, but our strategy for the postal sector is published in a separate strategy statement.

n changing regulatory framework: aspart of a broader digital strategy ineurope, the regulatory framework forelectronic communications introducedin 2002 (and updated in 2009) is underrevision.

a fundamental challenge for ComReg is toanticipate and react appropriately to thechanging environment, and to ensure thatour regulatory responses are timely andeffective.

strategic Framework

Through effective and relevant regulation,ComReg facilitates the development of acompetitive electronic communicationssector in Ireland that attracts investment,

encourages innovation and empowersconsumers to choose and usecommunications services with confidence.Our activities can be categorised into fourbroad areas:

n Competition

n Consumer Protection

n Investment, and

n Compliance and enforcement.

Underpinning our ability to fulfil our roleand mission is the ongoing developmentof, and investment in, our organisation.

This strategy statement details fivestrategic Intents for ComReg over the nextfive years.

competition – The market delivers innovation and the greatestpossible choice of wholesale and retail operators

our strategic intents are:

consumer Protection – Consumers can choose and usecommunications services with confidence

investment – efficient investment has enabled affordable, high-qualityand widespread access to communications services and applications

Enforcement and compliance – Regulated entities comply withregulatory obligations

organisation – We are an effective and relevant regulator

ovEr thE Past numBEr oF dEcadEs, irish sociEty hasBEcomE incrEasingly rEliant on ElEctroniccommunications sErvicEs. innovation iscontinually changing thE contriBution oF thEsEsErvicEs to thE way wE communicatE, work and arEEntErtainEd. as such, thE ElEctroniccommunications sEctor is EssEntial to modErn liFE.



ComReg’s second strategic intent is thatconsumers can choose and usecommunications services withconfidence. Our consumer protectionstrategy emphasises the role of informeddecision-making, and has three elements,broadly corresponding to the experienceof a consumer navigating the market:

n Preparing the consumer for thepurchasing decision: To effectivelyprovide consumers with appropriateand adequate information to assistthem when choosing and usingelectronic communications services, it isnecessary that we understand theirbehaviours and preferences.

n accessing and using products andservices: ComReg monitors complianceby electronic communications andpremium rate service operators withtheir obligations. Our strategy isdesigned to ensure that consumershave access to basic services and thattheir rights are upheld, with respect to,inter alia, switching, contracts, serviceuse and billing.

n consumer complaints and redress:For consumers to have confidence inthe electronic communications sectorthey need to have access to a resolutionprocess that addresses the powerdifferential between a large operatorand an individual. ComReg’s strategy isto ensure that consumers have effectiveredress mechanisms. Over theupcoming period we will be seeking toimprove minimum standards incomplaints handling by operators and todevelop alternative dispute resolutionmechanisms, as appropriate.

ComReg aims to be an effectiveadvocate for consumers and to provideexpert input on matters affecting howmarkets work for consumers.

ComReg’s first strategic intent is that themarket delivers innovation and thegreatest possible choice of wholesaleand retail operators. Ongoing monitoringof the market is required for targetedintervention which is aimed at facilitatingcompetition. effective regulation ofelectronic communications marketsrequires a thorough understanding of thesector and its associated weaknesses, ormarket failures. ComReg has threeprincipal ways in which competition andconsumer choice can be promoted:

n access to markets – promotingcompetition via the smP Framework:ComReg has a commitment toencouraging the development ofcompetition in markets which are noteffectively competitive, promotinginvestment to the deepest level of thenetwork that is economically efficient,and exiting the regulation of marketswhich are effectively competitive.

n access to inputs – effectivemanagement of spectrum andnumbering: ComReg’s strategy for theupcoming period is to ensure that themanagement of the national spectrumand numbering resources take accountof the promotion of competition, andthe potential impact that theassignment and allocation of theseinputs may have on downstreammarkets.

n access to consumers – activeswitching by consumers: effectivecompetition is, among other things,dependent upon the ability andwillingness of consumers to switchproviders in response to better dealsavailable in the marketplace.

ComReg’s strategy for the upcomingperiod in this latter context forms partof a wider strategy aimed at protectingconsumers.


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The market delivers innovation and the greatest possible choiceof wholesale and retail operators

stratEgic intEnt

Consumers can choose and use communications services withconfidence

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ComReg’s fourth strategic intent is toensure that regulated entities complywith regulatory obligations. ComRegrecognises that market regulation is onlyeffective and meaningful if regulatedentities comply with obligations. as such,this strategic intent supports the threealready outlined. ComReg is active in arange of different complianceenvironments; this is reflected in ourapproach at an operational level. Ingeneral terms our strategy has threeelements:

n culture of compliance: ComReg’s viewis that the optimum situation is whereregulated entities are fully cognisant oftheir obligations, comply with them andhave an internal culture of compliance.ComReg strongly encourages operatorsto have robust internal controls andpolicies intended to prevent and detectnon- compliance. Where appropriate,ComReg will utilise engagement anddialogue to help foster desiredbehaviours.

n targeted compliance andenforcement: Targeted compliance andenforcement activities involve directingresources toward activities in a way thatmaximises effectiveness. The differentenforcement settings in which ComRegis active means that prioritisation needsto be tailored to the relevantcircumstances.

n Effective deterrence: The effectivenessof the regulatory regime depends notonly on bringing non-compliant conductto an end but also on deterring futurenon-compliance. It is ComReg’s strategyto ensure that we have an effective setof powers to incentivise compliance andeffectively monitor and enforce. as such,ComReg will advocate for legislativeamendments that will enable it todeliver on its strategy, based on itsexpertise and experience ofregulation.

ComReg’s third strategic intent is thatefficient investment has enabledaffordable, high-quality and widespreadaccess to communications services andapplications. Underlying all of ComReg’swork is the belief that effectivelycompetitive markets drive commercialincentives which will motivate theinvestments necessary to bring innovativeproducts and services to market, and togenerally improve service quality.ComReg’s strategy over the upcomingperiod focuses on:

n Facilitating commercial investment:ComReg aims to ensure thatcompetitive incentives drive commercialinvestment in infrastructure andservices to the widest extent possible.ComReg’s role in this can involvemandating the supply of wholesaleinputs under the smP regime, settingprices that allow an adequate return oninvestment, effectively managing theradio spectrum and goodadministration of the nationalnumberingresource.

n creating regulatory incentives toinvest where necessary: Unregulated,electronic communications marketsmay not provide the right, or adequate,incentives for investment. Reliance onmarket-based incentives alone wouldalso lead to non-provision of services tonon-economicend-users.

n assisting policymakers: Where directstate intervention is required, forexample, in delivering broadband on anationwide basis, it is ComReg’s strategyto assist policymakers to designinterventions that complement marketrealities. as such, ComReg aims toprovide expert input based on itsknowledge and experience of electroniccommunications and relatedmarkets.


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The final strategic intent is to ensurethat comreg is an effective andrelevant regulator. ComReg recognisesthe need to ensure that, in the contextof changing technological, market andpublic policy circumstances, regulationcontinues to be effective and relevant.ComReg’s view is that we cannot adopt apassive stance. Instead, we will strive tobe an active and dynamic organisationthat is capable of responding to the

rapidly changing environment and ispositioned, in terms of expertise, robustanalytics and up-to-date information, aswell as resources, to address issues thataffect our ability to fulfil our mission.accomplishment of this strategic Intentensures a greater likelihood of successfor ComReg in achieving its other fourstrategic Intents.


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investment would otherwise beuncommercial.

1.8 ComReg is the regulatory authority forthe electronic communications sectorin Ireland. This strategy statementsets out our vision, role and missionand our strategy for the sector for thenext five years2.

1.9 In setting our strategy for the nextfive years, ComReg has adopted avision of the communications sector.ComReg cannot deliver the vision onits own. That will require acombination of government policyinterventions, regulatory

interventions by ComReg, and ofcourse investment by industry.Nonetheless, we consider our strategyshould be guided by a vision of theoutcome which we aim to help tobring about.

1.10 some of the ways communicationsare used today would have beendifficult to predict even five years ago.similarly, looking forward, it isimpossible to foresee the game-changing innovations of the next fiveyears. What does appear certainhowever, is that digital connectivitywill continue to grow in importance,both economically and socially.

1.11 Our vision is of a sector whereconsumers and businesses in Irelandhave affordable, high-quality, andwidespread access tocommunications services andapplications that support their socialand economicneeds.

1.1 electronic communications productsand services – such as broadband,mobile, and the plain old telephoneservice – make a large contribution tosocial and economic life. Thecontribution that these services maketo the way we live is constantlychanging as a result of innovation. Overtime, we have become more reliant onelectronic communications as a supportfor a greater proportion of our needsand wants.

1.2 The advent of the smartphone almost adecade ago, and the investment overthe years that followed in the highcapacity fixed and mobile networksnecessary to support the explosion inthe demand for capacity capable oftransmitting ever increasing quantitiesof data, have clearly beentransformative. From how we stay incontact with friends and family, throughto how we consume our entertainment,work or conduct our business, to howwe interact with public services, there isvirtually no part of our lives that is notpotentially affected by the ability toconnect digitally.

1.3 However in the absence of regulation, itis doubtful whether electroniccommunications markets would evolvein a way which meets society’s needs.There are many sources of potentialmarket failure (see Chapter 2) andalmost every country and economy inthe world has established a regulator toset and enforce rules to address someor all of the possible market failures.

1.4 Over the past five years, many end-users in Ireland have benefited fromaccess to new networks offering high-speed data communications both atfixed locations and on the move. On thefixed side, they have had a wider choiceof providers and have been offered awider range of service bundlesincluding voice, internet access, TVcontent and mobile.

1.5 Regulation has been a critical factor inenabling this investment to occur.Decisions made by ComReg havecreated a competitive incentive toinvest in new networks and to upgradeexisting ones. at the same time, ourdecisions have enabled retail operatorsto compete in the fixed broadbandmarket even if they do not havenetworks of their own. In the mobilemarket, ComReg assigned spectrumrights of use which have been used bythe operators to rollout their 4gnetworks.

1.6 Without regulation it is likely thatinvestment would have been slower tooccur, end-users would have had lesschoice, and prices would have beenhigher.

1.7 Despite the positive results that theregulated market has delivered formany end-users, not everyone hasbenefited equally. The economics ofnetwork deployment mean that newservices are usually deployed first inmore densely populated areas. Thereare many parts of Ireland where highspeed broadband is not available, andmany locations where end-users aredissatisfied with mobile coverage. Up toa point, regulation can assist thebenefits of new services to bedisseminated more widely, morequickly. But even the best- regulatedmarket cannot achieve all of society’sgoals and sometimes a stateintervention is needed because the


INTRODUCTIONINTRODUCTION

our vision for thecommunicationssector for thenext five years

consumers and businesses in ireland haveaffordable, high-quality, and widespread accessto communications services and applicationsthat support their social and economic needs. vi

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2 We also regulate the postal sector. Our vision, role, mission and values encompass both the electronic communicationsand postal sectors, but our strategy for the postal sector is published in a separate strategy statement.

whytelecommunicationsmarkets needregulation

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1.16 Previous strategy statements haveadopted a two-year horizon. We havedecided on this occasion to take alonger, five-year, perspective. Thisenables us to focus on longer termdevelopments and to begindeveloping our thinking on what therole of regulation might be in enablinginnovation and in dealing with issuesthat might arise in future. It also

allows stakeholders to plan in asimilar fashion.

1.17 In the short-term, ComReg hassomewhat limited discretion aboutthe activities we undertake and ourapproach to them. Our functions,objectives and powers are set out innational and eU law. We reduced ourstaff numbers during the financialcrisis and, as a result, much of ourresources are devoted to activitiesthat we are obliged by law toundertake.

1.12 Our role and mission set out thecontribution that ComReg makestoward achieving the vision for thesector. as an economic regulator, ourrole is to ensure thatcommunications markets operatein the interests of end- users andsociety. ensuring a well-regulatedmarket is one of the most importanttools in working towards the vision ofthe communications sector.

1.13 We take a broad view of what itmeans for a market to operate in theinterests of end-users and society,rather than basing our approach on anarrow view of economic efficiency orof market prices. For instance, weconsider it desirable that the marketshould provide as many end-users aspossible with advanced services. Thisreflects both the economic value of alarge communications network as wellas the social value of maximisingopportunities to participate in thedigital society. Other examples of the

broader interests of society includethe provision of services such asemergency calls and the adaptationof services so that, for example,people with disabilities can participatefully in society.

1.14 Our mission reflects this broad view ofour role. It remains unchanged fromour previous strategy statement:Through effective and relevantregulation, to facilitate thedevelopment of a competitivecommunications sector in Ireland thatattracts investment, encouragesinnovation and empowers consumersto choose and use communicationsservices with confidence.

1.15 In order to be effective as aneconomic regulator, it is importantthat stakeholders have confidencethat we discharge our functionsindependently, based on good- qualityevidence and analysis, that we are notbiased towards any marketparticipant and that we do not sufferfrom so-called “regulatory capture”.Our values – also unchanged from thelast strategy statement – enablestakeholders to have this confidence.


our role, missionand values

Integrity

Impartiality

Effectiveness

ExcellenceTransparency

VALUES

our strategycomreg’s role is to ensure that communicationsmarkets operate in the interests of end-usersand society. ro

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through effective and relevant regulation, wefacilitate the development of a competitivecommunications sector in ireland that attractsinvestment, encourages innovation andempowers consumers to choose and usecommunications services with confidence.

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1.20 In what follows, we first explain theeconomic and legal framework thatwe operate within. We then identifysome of the principal trends andchallenges that are likely to impacton effective and relevant regulationby ComReg over the next five years.We then set out our five statements

of strategic intent in the context ofour overall strategic framework.Then, chapter by chapter, in relationto each of the five strategic intents,we set out the related goals andparticular programmes of workwhich ComReg intends to undertakeover the period 2017-2019.

1.18 However when taking a five-yearview, we are able not only to considerwhat we will do in the short termwith our current powers andresources, we are also able toconsider what enhancements to ourpowers might be useful in addressingboth current and future issues. Wecan also consider what additionalresources we should seek in order toenhance our work programme. Inthis strategy statement, we not onlyset out our priorities given existingpowers and resources, we alsohighlight where we think it would beuseful for our powers and resourcesto be expanded.

1.19 The tools available to us to deliver ourrole and mission derive from ourstatutory powers. These can besummarised into four maincategories: setting rules to promoteeffective competition, upholdingconsumer rights, creating anenvironment that supportsinvestment, and making sure thatregulated entities comply with therules. additionally our ability to usethese tools depends on ourorganisational capability. For each ofthese areas, we have developed astatement of strategic intent, andgoals that support the strategicintent.


a 5 year view

strategic intents 2017-2021

competition – The market delivers innovation and thegreatest possible choice of wholesale and retail operators

consumer Protection – Consumers can choose and usecommunications services with confidence

investment – efficient investment has enabled affordable,high-quality and widespread access to communicationsservices and applications

Enforcement and compliance – Regulated entities complywith regulatory obligations

organisation – We are an effective and relevant regulator

WHeN TakINg a FIVe-yeaR VIeW,We aRe aBLe NOT ONLy TO

CONsIDeR WHaT We WILL DO INTHe sHORT TeRm WITH OUR

CURReNTPOWeRs aNDResOURCes, WeaRe aLsO aBLeTO CONsIDeRWHaTeNHaNCemeNTsTO OUR POWeRsmIgHT Be UseFULIN aDDRessINgBOTH CURReNTaND FUTUReIssUes.



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THe eCONOmIC aND LegaL CONTexTTHe eCONOmIC aND LegaL CONTexT

2.1 electronic communications marketsinclude the retail markets for broadbandaccess, and fixed and mobiletelecommunications services, as well aswholesale markets where operators sellservices to one another or provideaccess to one another’s networks.

2.2 There are several reasons why thesemarkets are at risk of not operatingefficiently, and in the interests of end-users and society.

2.3 First, private operators will not servemarkets that they consideruncommercial. For example, thecommercial nature of private investmentmeans that high-quality networks mayonly be rolled out in areas wherepopulation densities are such thatpotential revenues from the end-users inthose areas exceed costs. Further, thequality of basic networks may not bemaintained in areas where costs arehigh and competition is correspondinglyweak or non-existent.

2.4 similarly, the price at which electroniccommunications services would beoffered on a commercial basis maymean that some services are notaffordable for certain end-users.Further, for reasons other than serviceavailability or affordability, certain end-user groups may be unable oruninterested in adopting newtechnologies. However, investmentdecisions made on this basis may notfully take into account the economic andthe social value to society as a whole ofmore widespread service adoption.

2.5 second, there are market failures whichmean that markets do not alwaysfunction efficiently (see explanatory Box1). One such failure is that an operatormight possess significant market power,i.e., the ability to operate withoutconstraint from competitors. This canarise, for example, for historical reasonsor because the relative cost of networkrollout compared to potential revenuesmeans that there are parts of the marketwhere only one operator can profitablysurvive. Unchecked, significant marketpower can lead to high prices, poorquality of service, or the prevention ofthe entry of competitors in other partsof the market which are potentiallycompetitive.

2.6 even when there is no single operatorwith significant market power, there maybe oligopolies – situations where thereare too few operators for competition tofunction optimally. This can arisebecause there are significant entry costswhen rolling out networks. It can alsoarise when operators need to make useof the radio spectrum, since spectrum isa limited resource.

2.7 There are other reasons why electroniccommunications markets might fail. Forexample, the products are oftencomplex, and qualitative aspects of aservice can be difficult for end-users toknow or understand. an example is thepurchase of the mobile phone whichinvolves choosing a handset, a serviceprovider and a plan, often as part of thesame bundle.

2.8 This often leads to an asymmetry ofinformation between operators andend- users. This may lead to anunderinvestment in quality by operatorsand, just as problematic, it may leaveend-users vulnerable to unfair treatmentin the marketplace.


the economics ofelectroniccommunications

market failures impede the ability of the normal competitive process to yield welfare optimal outcomes.The objective of economic regulation is to attempt to correct or compensate for the presence of marketfailures through appropriate interventions. It is possible to map many of ComReg’s statutory function andobjectives back to an underlying market failure. The three classic market failures are: market power (ormonopoly power in the extreme), externalities (related to public goods) and information asymmetry.

market power refers to the ability of one operator to raise prices above, or reduce quality below, thatwhich would prevail in a competitive market. market power may stem from two principle sources, thereluctance or inability of consumers to switch in response to a degradation of terms and conditions. Thismay occur because switching is difficult/costly for example, or because there are no or limitedcomparable alternatives available, or in other words, because the market structure is monopolistic. Inelectronic communications markets, both of these sources of market power are present, though it is thelatter source – the monopolistic market structure – which has been the traditional focus of regulation inthe sector.

The monopolistic structure of some electronic communications markets arises because of the oftenlarge sunk costs associated with establishing a physical network. This provides the motivation for thewholesale regulation of such markets. The Framework Regulations3 enable ComReg to designate certainoperators as having significant market Power (smP). smP is a legal concept which characterises theextent of market power as being “a position of economic strength affording it the power to behave to anappreciable extent independently of its competitors, customers and ultimately consumers”.4 ComRegmay then impose particular obligations on operators with smP which may include requirements toprovide network access to other operators at regulated prices and to act in a non-discriminatory manner(see explanatory Box 2).

Externalities refer to the costs or benefits of any economic activity which are not fully felt by theeconomic actor undertaking the activity. activities that generate negative externalities are undertakenmore than issocially desirable, but those with positive externalities are underprovided. Intervention isthus required to promote behaviour that yields positive externalities and discourages activities withnegative externalities. There are examples of both positive and negative externalities in electroniccommunications markets.

Interference between radio transmissions is an example of a negative externality. Here, one actor usingspectrum without coordinating with others can cause harmful interference, impacting on the quality oftransmissions by other operators, and reducing the overall value of spectrum. The presence of negativeexternalities motivates the need for spectrum management arrangements which involve the assignmentand enforcement of spectrum rights.

Positive externalities are also present. at the most basic level, the more people connected tocommunications service the more valuable the service is to other end-users. This is sometimes referredto as a network externality and is sometimes used to motivate interventions aimed at ensuring thatparticular operators may interconnect.

Finally, information asymmetry refers to the situation where parties to a transaction have differentinformation. an example of asymmetric information in the electronic communications markets can occur,for example, if a consumer does not understand the specifications or terms and conditions of productsand services. Having incomplete information about a good or product makes it difficult for a consumer todetermine how much they value it – essentially, it prevents the price mechanism from working effectivelyand may lead to consumers overpaying for a product, or not purchasing something that actually suitstheir needs. ComReg tackles this particular information asymmetry by requiring accurate productdescriptions and quality guarantees.

ExPlanatory Box 1:markEt FailurEs

3 The european Communities (electronic Communications Networks and services) (Framework) Regulations 2011, s.I. No.333 of 2011 (“the Framework Regulations”).

4 Regulation 25(1) of the Framework Regulations.


2.9 a third characteristic of electroniccommunications markets is that theyform part of a wider eco-system, whichincludes a range of related marketssuch as markets for content andservices delivered over the internet.much of the economic and societalvalue of electronic communicationsmarkets derives from their role as anenabler of innovation in these markets.There are complex dynamics to theinter-relationships among thesemarkets and it is important thatelectronic communications markets donot evolve in a way which inhibitsinnovation.

2.10 Digital connectivity andcommunications are key public policyissues, and are increasingly viewed asessential for social inclusion andeconomic development. given themarket realities and potential marketfailures, the outcomes that would beyielded by an unregulated marketwould be unlikely to be optimal, oreven adequate, from a societalperspective.

2.11 For these reasons, ComReg haspowers to intervene to control andmitigate the adverse effects ofsignificant market power where itoccurs in electronic communicationsmarkets, ComReg has powers tointervene in markets to ensureservice provision in some non-commercial circumstances and touphold consumer rights and,ComReg has powers to manage theuse of the radio spectrum.

2.12 ComReg was established by theCommunications Regulation act, 20025

as the successor to the Office of theDirector of TelecommunicationsRegulation (ODTR), which had itselfbeen established in 1996. 2017therefore marks twenty one years ofeconomic regulation of thecommunications sector in Ireland.

2.13Over the last two decades thescope of the regulatory remit haschanged, reflecting changes indomestic and european policytowards communications marketsas well as changes in technology.ComReg’s core remit nowencompasses:

n The regulation of electroniccommunications networks andservices6

n The management of the radiofrequency spectrum and nationalnumbering resource7, and

n The regulation of postal services.8

2.14 ComReg also has a number ofadditional functions, including inrelation to the regulation of PremiumRate services (PRs)9 and emergencyCall answering services (eCas).10


5 The Communications Regulation act, 2002 has been amended by inter alia the Communications Regulation(amendment) act 2007, the Communications Regulation (Premium Rate services and electronic CommunicationsInfrastructure) act 2010 and the Communications Regulation (Postal services) act 2011 (“the 2002 act”). TheCommunications Regulation act, 2002 has been amended by inter alia the Communications Regulation (amendment)act 2007, the Communications Regulation (Premium Rate services and electronic Communications Infrastructure) act2010 and the Communications Regulation (Postal services) act 2011 (“the 2002 act”).

6 section 10(1)(a) of the 2002 act.7 Ibid. section 10(1)(b).8 Ibid. section 10(1)(ba) and (c).9 Ibid. section 10(1)(cb).10 Ibid. section 10(1)(ca).


2.15 many of our regulatory powersderive from eU directives andregulations, and the legislation thatimplements them in Irish law (see theTable below11). The directives thatcomprise the eU electronic

Communications Framework (theeCF) are detailed in explanatory Box2. There are also recent eU lawswhich, for example, give Regulatorsduties in relation to roaming12 andnet neutrality.13

11 For clarity, the list of powers outlined here is not intended to be an exhaustive list. For more detail on ComReg’sfunctions and powers, please see ComReg’s website - https://www.comreg.ie/about/legislation/other-key-legislation/

12 Regulation (eU) 2015/2120 of the european Parliament and of the Council of 25 November 2015 laying down measuresconcerning open internet access and amending Directive 2002/22/eC on universal service and users’ rights relating toelectronic communications networks and services and Regulation (eU) No 531/2012 on roaming on public mobilecommunications networks within the Union.

13 Regulations 9 and 25 of the Universal service Regulations, Regulation (eU) 2015/2120 of the european Parliament and ofthe Council of 25 November 2015 laying down measures concerning open internet access and amending Directive2002/22/eC on universal service and users’ rights relating to electronic communications networks and services andRegulation (eU) No 531/2012 on roaming on public mobile communications networks within the Union (“the NetNeutrality Regulations”).

14 For clarity, the list of powers outlined here is not intended to be an exhaustive list. For more detail on ComReg’sfunctions and powers, please see ComReg’s website - https://www.comreg.ie/about/legislation/other-key-legislation/

comreg’s Powers and Functions include the following14

Competition Powers to impose ex ante obligations on operators found to have significant market power,with the aim of mitigating potential competition problems.Powers to undertake ex post investigations of abuse of dominance and collusion in electroniccommunications markets.The function of managing the radio spectrum with the objective of ensuring its efficientmanagement and use.Powers to ensure ease of switching of end-users between service providers.The function toresolve disputes between operators in respect of ex ante obligations.

ConsumerProtection

Powers in relation to access, affordability and quality of universal services. Powers in respect of fraud and misuse in relation to numbers and services.Powers in respect of the security and integrity of electronic communications networks andservices. Powers in respect of data privacy.Powers in relation to end-user contracts and the provision of related information to end-users. Powers in relation to billing, roaming, net neutrality and switching.Powers in relation to equivalence of access and choice to disabled end-users. Powers in relation to assisting end-users with complaints against operators.Powers in relation to the provision of transparency and publication of information to end-users. Powers in relation to consumer protection rules in the general authorisation.Powers in respectof PRs.

Investment Powers in relation to designating a Universal service Provider to ensure that all reasonablerequests for certain fixed communications service are met.Obligation to take into account investment when considering the imposition of an ex anteaccess obligation on operators with significant market power.Powers to assign radio spectrum rights of use and to manage the use of telephone numbers.The function to resolve disputes between operators in respect of access to physicalinfrastructure for electronic communications networks and services.

enforcementandCompliance

The function to ensure compliance with regulatory obligations and to carry outinvestigations. Powers to take civil or criminal enforcement actions.Powers to conduct authorised officer visits and to require persons to give evidence. Powers to issue Fixed Payment Notices.Powers to issue Directions in respect of ex ante obligations.

the legal context



2.16 In addition, ComReg has sharedpowers with the Competition andConsumer Protection Commission inrespect of certain ex post competitionlegislation and consumer protectionlegislation, insofar as they apply tothe electronic communications andPRs15 sector.16 ComReg has someshared and complementary powerswith the Office of the Director of DataProtection Commissioner in respectof specific aspects of data privacy.17

ComReg also has a variety of otherpowers and functions derived fromnational legislation.

2.17 The 2002 act and the FrameworkRegulations set out a number ofstatutory objectives for us to followand include:

n Promoting the interests of end-usersof communicationsservices

n Promoting investment andinnovation

n Promoting competition, and

n ensuring efficient managementand use of the radiospectrum.

2.18 When exercising our statutorypowers, we make individualdecisions based on the evidence,taking action in a proportionatemanner having regard to ourstatutory objectives. Ourstatements of strategic intent andour strategic goals are consistentwith our statutory objectives andare used to help us establishpriorities.

2.19 The european Commission hasrecently proposed significantchanges to the eCF. TheCommission’s proposals arediscussed further in Chapter3.


15 In the case of PRs, powers are limited to consumer protection. 16 ComReg has cooperation agreements (Document 03/06 and Document 15/121) in place with the Competition and

Consumer Protection Commission. The agreements are intended to facilitate co-operation in relation to (i) consumerprotection and (ii) issues of competition between undertakings.

17 see Regulations 30 and 33 of european Communities (electronic Communications Networks and services) (Privacy andelectronic Communications) Regulations 2011.

18 Directive 2009/140/eC of the european Parliament and of the Council of 25 November 2009 amending Directives2002/21/eC on a common regulatory framework for electronic communications networks and services, 2002/19/eC onaccess to, and interconnection of, electronic communications networks and associated facilities, and 2002/20/eC on theauthorisation of electronic communications networks and services.

19 Directive 2002/21/eC of the european Parliament and of the Council of 7 march 2002 on a common regulatoryframework for electronic communications networks and services as amended (“the Framework Directive”) astransposed in Ireland by the Framework Regulations.

20 Directive 2002/20/eC of the european Parliament and of the Council of 7 march 2002 on the authorisation of electroniccommunications networks and services, as amended (“the authorisation Directive”) as transposed in Ireland by theauthorisation Regulations.

21 Directive 2002/19/eC of the european Parliament and of the Council of 7 march 2002 on access to, and interconnectionof, electronic communications networks and associated facilities, as amended (“the access Directive”), as transposed inIreland by the access Regulations.

22 Directive 2002/22/eC of the european Parliament and of the Council of 7 march 2002 on universal service and users’rights relating to electronic communications networks and services, as amended (“the Universal service Directive”) astransposed in Ireland by the Universal service Regulations.

23 Directive 2002/58/eC of the european Parliament and of the Council of 12 July 2002 concerning the processing ofpersonal data and the protection of privacy in the electronic communications sector (Directive on privacy and electroniccommunications) as transposed in Ireland by the european Communities (electronic Communications Networks andservices)(Privacy and electronic Communications) Regulations 2011, s.I. No. 336 of 2011 (“the Data Protection andPrivacy Regulations”).

The eCF is part of the ‘Telecoms Package’, adopted in 2002 and amended in 200918 to take account of the rapiddevelopment of the sector. In addition to the Framework Directive19 itself, which among other things sets out thetasks of the national regulatory authorities (NRas), as well as the principles underpinning their operations, thepackage includes four other Directives, the so called “specific Directives” which regulate specific aspects of electroniccommunications.

nThe authorisation Directive20 creates a legal framework to ensure the freedom to provide electronic communicationsnetworks and services throughout the european Union. This Directive introduced a system of general authorisation,instead of individual or class licences, to facilitate entry in the market and reduce administrative burdens onoperators. The authorisation Directive entitles authorised operators to negotiate interconnection with otherproviders in the eU and to obtain access to or interconnection from other providers. While the system of generalauthorisation applies to the use radio frequencies, it provides that member states may still may make the use ofradio frequencies subject to the grant of individual rights with a view to ensuring, among other things, efficient useof spectrum.

nThe access Directive21 establishes a regulatory framework for the relationships between suppliers of networks andservices. Where an operator is identified as having significant power in a given market, the NRas may impose pro-competitive obligations regarding access and interconnection. such obligations, depending on the circumstances,may include obligations relating to transparency, non-discrimination, accounting separation, obligations of access to,and use of, specific network facilities, or obligations relating to cost recovery and price controls.

nThe Universal service Directive22 seeks to ensure the availability of a minimum set of good-quality electroniccommunications services accessible to all end-users at an affordable price, while minimising market distortion. TheUniversal service Directive also sets out certain consumer protection rights, for example, in relation to the receipt ofinformation enabling consumers to understand the services to which they subscribe, pricing and tariffs, and inrelation to switching service providers. The Directive also imposes corresponding obligations on operators, forexample, in relation to the notification of end-users when contractual conditions are changed.

nThe Directive on Privacy and electronic Communications23 sets out rules to ensure security in the processing ofpersonal data, the notification of personal data breaches, and confidentiality of communications. It also bansunsolicited communications where the user has not given their consent.

Regulation (eC) No 1211/2009 establishes a Body of european Regulators for electronic Communications (BeReC).BeReC was established to contribute towards consistent regulatory practice. It is a forum for cooperation amongNRas, and between NRas and the Commission, in the exercise of the full range of their responsibilities under the eUregulatory framework.

The eCF is currently under review once more. In september 2016 the Commission published a proposal for adirective establishing the european electronic Communications Code (the eCC), which is intended to replace the eCF.

ExPlanatory Box 2: thE sPEciFic dirEctivEs



trEn

ds

an

dch

all

Eng

Es 03


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TReNDs aND CHaLLeNgesTReNDs aND CHaLLeNges

2009, in response to evolving marketand political developments, is againunder revision. a challenge forComReg is to contribute effectivelyto the process of evolvingregulation and, as an institution, toitself evolve in response, ensuringthat we continue to be an effectiveand relevant regulator.

3.5 These five factors are discussed inmore detailbelow.

3.6 Over the past 5 to 10 years, advancesin electronic communicationtechnologies have enabled people toconnect in ways they never have

before. From how we stay in contactwith friends and family, work andconduct our business, there isvirtually no part of our lives whichremains untouched by innovationsin digital connectivity (see Figure 1for a breakdown of devices used athome and at work). In particular:

n In the personal sphere in 2016 justover two-thirds of Irish adults had aFacebook account while about aquarter had LinkedIn, Twitter,google+ or Instagram accounts.24 Thediversity of these networks, rangingfrom professional or socialnetworking to video and photosharing, shows the range of servicesavailable. With respect toentertainment, on average IrishNetflix users spend seven hours perweek using Netflix services with morethan half of these users indicatingthat this has impacted on the amountof scheduled or live television theywatch.25

3.1 Technological advances in electroniccommunications technologies –networks and devices – have had atransformative effect, both socialand economic, on the lives of manyIrish citizens.

3.2 In addition to phones, tablets andPCs, there is an expanding range ofdevices that connect digitally overnetworks. This connectivity hasbecome central to life andcommerce in 21st century Ireland.Connectivity is seen as a key driverof economic productivity and socialinclusion. as a result, access to high-quality electronic communicationsinfrastructure and services isincreasingly regarded as essential.For this reason, efficient investmentin electronic communicationsinfrastructure is imperative forfuture social and economicsuccess.

3.3 From a regulatory perspective,these trends, technological, socialand economic, give rise to a numberof challenges:

n While technological changes haveaffected expectations of the end-user experience, the actualexperience of end-users has notevolved uniformly. For example, end-users increasingly wish to accessservices from their mobile devices atany time and place, both indoors andoutside. While the rollout of highcapacity fixed and mobile networksmeans that, increasingly, this ispossible, it is not always so.

n Technological change also affects theelectronic communications eco-system. This comprisestelecommunications companiesoffering a variety of retail andwholesale services using bothnetworks that they own, andwholesale services provided byothers. It also includes companies in

related markets, such as thoseproviding content and services overthe internet. Regulators must takeaccount of the complexity of this eco-system, including possible fluidity inthe boundaries between electroniccommunications markets and certainrelated markets, and the role ofelectronic communications as anenabler of innovation in thosemarkets.

n Whereas much of the innovationarising from technological advancesin electronic communications hasrelated to how people connect, thenext wave of innovation is anticipatedto be in relation to connected “things”and the so called “internet ofthings”. It is uncertain at presentwhether this wave of innovation willcreate any additional requirements interms of regulation, but what is clearis that the potential for lifestyle andproductivity enhancement issignificant and in this context,ComReg is conscious of its role inrelation to the facilitation ofinnovation andinvestment.

n each of these trends points towardthe differing requirements of thefuture underlying electroniccommunications networks in termsof capacity, speeds and otherimportant characteristics. Forexample, for wireless, 5g is touted asa kind of unifying standard capableof meeting these requirements,though no standard has yet beendefined. From a regulatoryperspective it is unclear what theeffective regulation of evolvingnetworks will entail.

3.4 Finally, the european regulatoryframework itself is changing. as partof a broader digital strategy ineurope, the regulatory frameworkfor electronic communicationsintroduced in 2002, and updated in


24 source: Ipsos mRBI, social Networking Tracker, October 2016.25 source: ComReg Consumer ICT survey, ComReg 15/123a, November 2015.

End-user Experience:the rural/urbandivide and otherdemographic factors

IN 2016 JUsT OVeR TWO-THIRDs OF IRIsH aDULTsHaD a FaCeBOOk aCCOUNT

aBOUT a QUaRTeR HaDLINkeDIN, TWITTeR,gOOgLe+ ORINsTagRam aCCOUNTs.

2⁄3 1⁄4



26 source: european Commission, Digital agenda scoreboard key Indicators.

n In a commercial context, onlinechannels for commerce have createdopportunities for consumers andbusinesses alike. In 2015, 51% of Irishpeople ordered goods or servicesonline, and electronic sales accountedfor 37.4% of total turnover in Irishenterprises, compared to just 17.2%across the eU as a whole.27 Irish firmsare capitalising on this trend; threequarters of Irish firms used a websitein 2015, with almost two thirds of Irishenterprises active on social media.28

27 source: european Commission, Digital agenda scoreboard key Indicators.28 source: european Commission, Digital agenda scoreboard key Indicators.

IN 2015, JUsT OVeR40% OF PeRsONsemPLOyeD IN IReLaNDWeRe PROVIDeD WITHa PORTaBLe DeVICe ByTHeIR emPLOyeR, aFIgURe WeLL aBOVeTHe eU aVeRage OF20%

51%OF IRIsH PeOPLeORDeReDgOODs ORseRVICesONLINe IN 2015

IN 2015 eLeCTRONICsaLes aCCOUNTeD FOR

OF TOTaL TURNOVeRIN IRIsH eNTeRPRIses

37.4%

n In the work environment, the impactof advances in electroniccommunications technologies is alsoevident. The advent ofwireless/mobile communicationsdevices has facilitated a wide varietyof working practices and patterns withpeople able to check emails,participate in video calls and even logonto their desktops using portabledevices. many employers now providetheir staff with portable devices suchas laptop computers, tablets orsmartphones. In 2015, just over 40%of persons employed in Ireland wereprovided with a portable device bytheir employer, a figure well abovethe eU average of 20%.26

20%vs

40%



principal intervention aimed atbridging the digital divide betweenurban and rural areas. The objectiveis to ensure every premises inIreland will have access to a high-quality network with capacity todeliver at least 30 mbps speed.ComReg recognises the importantcomplementary role that privateoperators (using fixed and/orwireless technologies) can play inrolling out high-quality networks inrural areas where populationdensities, though lower relative tomore urbanised areas, may still becapable of supporting a degree ofcommercialinvestment.

3.9 existing mobile networks donot have an obligation toprovide ubiquitous coverageor to provide services toevery premises. While mobilecoverage in Ireland hasexceeded well over 90% of thepopulation (as distinct fromgeography) for 2g and 3g for manyyears and the rollout of 4gnetworks continues, there appearsto be a trend of growingdissatisfaction among end- userswith the quality of coverage incertain geographic areas. In thefuture, improved access toapplications from mobile devices willdepend not only on improvedcoverage of mobile networks, butalso on the ability of services to roamseamlessly between mobile and Wi-Fi networks so that, for instance,indoor voice coverage could takeadvantage of the extension of fixedbroadband driven by the NationalBroadband Plan.

3.10 On the demand-side, a number ofdemographic and socio-economicfactors are relevant to the take-up of

innovations afforded bytechnological advances in electroniccommunications technologies. Forexample, age is an important factor.Figures from 2015 show thatyounger people are significantlymore likely to use the internet; 95%of those aged 16-24 go online atleast weekly, compared to just 35%of those aged over 65. similarly, levelof educational attainment alsoinfluences access to the informationsociety, with only half of those withlow education using the internet atleast weekly compared to 96% ofhighly educated individuals.30

3.11 From a regulatory perspective, achallenge for ComReg is to betterunderstand the end-user experience,to be cognisant of the range of policyinstruments and actors active in thearea, so that it may optimise the useof regulatory tools at its disposal. Inthe 2014-16 strategy statement,ComReg emphasised its intention tobe mindful of the needs of Ireland’srural population. ComReg’s view isthat such considerations will be asimportant over the coming strategyperiod.

3.7 although we are seeing rapidchanges in communicationtechnologies and how they canfacilitate economic and socialengagement, the trends are notuniform. supply- and demand-sidefactors are bothrelevant.

3.8 On the supply-side, commercialrealities mean that network rollout,

both fixed and mobile, occurs firstin areas with higher populationdensities. However, commercialrealities also mean that rollout maynot occur at all in geographic areaswhere the population is sparse. Inrelation to high speed broadbandnetworks, the government’sNational Broadband Plan is the


29 source: ComReg ICT survey, 2015.

Figure 1: home/workplace (%) devices connected to Fixed Broadband.29

0% 20% 40% 60% 80% 100%

Work Home

mP3/Digital music player

mobile gaming device

eReader

mobile internet device

smart TV

Desktop computer

gaming console

Tablet computer

smart Phone

Laptop computer

30 source: eurostat, Digital economy and society.

internet usage

96%highly

educated

95%aged16-24

35%aged

over 65



3.16 a third trend concerns theincreasing importance of relatedmarkets where complementaryproducts or services are sold.Complementary products orservices in this context refer tomarkets for products or servicesconsumed alongside electroniccommunications services andwhich can have a significantinfluence on the consumer’sexperience of the electroniccommunications service, e.g.,

end-user equipment. The end-user’s experience of line speeds(i.e. broadband download andupload speeds), for example, isinfluenced by the quality of themodem that the end-user hasinstalled, though the service andmodem are most often providedby the same service provider.similarly, the quality of servicesexperienced by end-users ofmobile phones depends on avariety of factors in addition to

the electroniccommunications eco-systemand related markets

3.12 an additional consequence of thetechnological and market advances ofthe last 5 to 10 years is that the set ofmarkets relevant to the regulation ofelectronic communications marketshas evolved. a number of trends arediscernible.

3.13 First, there is the matter ofconvergence which refers to the trendwhereby telecommunicationsservices, information technology andmedia sectors that originallydeveloped and operatedindependently of one another, aregrowing together and becomingdependent on one another. Theprocess of platform convergence,whereby different communicationsservices (TV and radio, voicetelephony, online services), whichpreviously were delivered on differentplatforms, and are increasinglyavailable on a single platform, impliesa change to the competitivelandscape. For example, what wouldhave been traditionally regarded asmedia companies are now competingwith the traditionaltelecommunications operators. In thiscontext, a closely related issueconcerns the emergence of bundleswhich, alongside eCs elements, alsocontain non- eCs related products orservices, for example, media content(see explanatory Box 3 for furtherdiscussion).

3.14 a second related trend concernsOver-The-Top (‘OTT’) service providers.OTTs are services that use theinternet for their delivery. These canrange from messaging apps andsocial networks, to online video andsubscription services (e.g. Netflix,

spotify, and digital print services). Thedigitisation and delivery of servicesover the internet has removedgeographic boundaries that havetraditionally existed for telephony,television and media services. Thearrival of OTT operators in the eco-system surrounding electroniccommunications markets raises anumber of issues relevant to effectiveregulation. Of particular interest is theissue arising in relation to theregulation of electroniccommunications markets where OTTservices overlap or replace what wethink of as traditionaltelecommunications services such asmessaging and voice.

3.15 another issue concerns the ability ofnetwork operators, who controlinfrastructure bottlenecks, over whichOTT services are delivered, toinfluence competitive outcomes. Thiseffect may occur as a consequence ofunilateral action by networkoperators who may block or reducethe quality of certain OTT services ortypes of content that may competewith the operator’s offerings. a similarforeclosing effect may also occur byvirtue of an agreement or partnershipwith selected OTT service providers.While outright blocking by networkoperators is less common (and nowprevented under the Net NeutralityRegulations, see explanatory Box 10in Chapter 6) we are increasinglyseeing partnership arrangementsbetween the operators and OTTservice providers. For the operatorthese partnership arrangements withOTT service providers may provide away of boosting data revenues to off-set a reduction in revenue from adecline in voice and other services.For the OTT service provider,partnering with an operator may be away of helping their brand exposurein a competitive market.


Convergence in this context refers to the trend whereby telecommunications services, informationtechnology and media sectors that originally developed and operated independently of one another, aregrowing together and becoming dependent on one another.

at a technical level, convergence can be thought of as any infrastructure being able to transport any type ofdata. On the consumer side, convergence can be thought of as the bringing together of relevant services(video, telephony, music, applications) which can be consumed regardless of the end-users device.

Bundling refers to a practice of service providers combining, or bundling, two or more services together.For the bundle provider, the benefits of bundling are that they can reduce customer churn and help retaina customer for longer. That is, the bundle may provide a level of ‘stickiness’ for the provider. The benefits ofbundling for the consumer is that the bundle may come at a discount compared with purchasing theservices individually. There is also the convenience benefit of having to pay a single bill for the services. Inthe electronic communications sector, we have seen the popularity of bundles increase significantly overthe past 5 years, matched by a decline in the popularity of single services.

as we look towards 2021, we think there are two principal issues in relation to convergence and bundlingand how they impact the market:

n Bundling affects the competitive dynamic. Bundling has benefits for both the provider and theconsumer. However consumer ‘stickiness’ raises questions around whether there are any barriers tothe consumer switching away from bundles to either individual services or to a competitors bundle.Further, the ‘stickiness’ of the consumer may strengthen as we see more offerings including contentservices.

n We may be starting to see a structural change in the market, driven by the recent trend of mergers andacquisitions by media companies of telecommunications providers, and of telecommunicationsproviders by media companies. For example, recently we have seen eircom purchase setanta sports,and Virgin media purchase UTV Ireland. While we have seen consolidation within thetelecommunications sector these new types of convergence mergers and acquisitions are likely tocontinue to have an effect on market structures.

Finally, convergence raises another concern in relation to competition which is that the practice of bundlingmay afford operators with market power in one market the opportunity to leverage sales in anothermarket. For example they might leverage power in a broadband market to sell a group of products in abelow cost manner thereby damaging competition.

ExPlanatory Box 3: convErgEncE and BundlEs



anticipated over the next numberof years. Currently, there are 1billion connected homes and 5billion connected people globally.However, predictions pointtoward 20 to 30 billion connectedthings by 2020 (Note that thesenumbers of connected thingsexclude smartphones, tablets andcomputers). For Ireland thepredictions are that by 2020 thenumber of connected devices willexceed 1 million (see Figure 2).

3.21 The nature and functions of thesenew connected devices is as yetunknown, but key areas currentlybenefiting from IoT servicesinclude automotive, e- healthservices, smart metering/smartgrids, smart homes, smart cities,industry/automation andagriculture.

3.22 The advent of IoT will yieldparticular challenges for ComReg.In particular, the connectivityrequirements for IoT devices areparticularly wide and will requirenew service offerings to meet theindividual requirements. Inaddition, the rollout of IoT devicesmay require significantnumbering resources. given thesignificant potential for lifestyleand productivity enhancementassociated with IoT, ComReg isconscious of its role in relation tothe facilitation of innovation andinvestment.

the received strength of thetransmitted mobile signal, suchas the weather, local topography,and in the case of indoor use, thequality of home insulation.another key factor however is theperformance of the handsetitself. It is well known that theextensive functionality built intosmartphones, has come at a costto how well they receivetransmitted mobile signals. In thecontext of making appropriatepolicy and regulatoryinterventions in the context of adebate about mobile coverage, itis important that ComRegmaintains an understanding ofrelated markets and technologies,such as in the case of handsetsfor example.

3.17 Finally, there are input markets.such markets include markets fornetwork equipment which tendto be global in nature but whereharmonisation andstandardisation are importantissues. There are also inputsrelating to access to civilengineering infrastructure suchas poles, ducts and sites.Following the introduction of theeuropean Union (Reduction ofCost of Deploying High- speedPublic CommunicationsNetworks) Regulations 201631

(“the Broadband CostsRegulations”) which implementthe so-called “Broadband CostsDirective”32 in Ireland (seeChapter 5), ComReg has a disputeresolution role with respect toaccess requests to non-electroniccommunications infrastructure.

3.18 Overall, a challenge for effective

regulation in electroniccommunications markets is oneof understanding the importanceof related markets and the “eco-system” of operators active inthose markets, and in particular,of the potential for innovationarising in these markets. It isimportant that ComReg be awarethat features of electroniccommunications markets, or theregulation of such markets, mayhave the potential to facilitate orinhibit the realisation of welfaregains arising in, or as a result ofinnovations in related markets.The story of the last decadeshows that innovation arising inrelated markets has been at leastas important in terms of thedriving lifestyle and productivityenhancements as technologicaladvances in electroniccommunications technologies.

the internet of things (iot)3.19 The concept of the Internet of

Things (IoT) goes beyond simplythe notion of the internetconnecting people together to theinternet connecting devicestogether. as part of the IoT,devices have the ability to interactwith their environment, and eachother, without the physicalconstraints of geography. a rangeof connected devices are alreadyin the public domain, includingsmart home devices such asthermostats and cameras, as wellas connectedcars.

3.20 However, a surge in the range andscale of such devices is


31 s.I. No. 391/2016.32 Directive 2014/61/eU of the european Parliament and to the Council of 15th may 2014 concerning measures to reduce

the cost of deploying high-speed electronic communications networks.

5 BILLIONCONNeCTeDPeOPLegLOBaLLy

CURReNTLy, THeReaRe 1 BILLIONCONNeCTeDHOmes

&



Evolving networks3.23 Over the last number of years

operators have continuedinvesting in both fixed andmobile networks (see Chapter 7for more discussion ofinvestment and network rollout).With respect to fixed networks wehave seen eircom upgrading itscopper network to allow for thedelivery of Nga services34, andVirgin media has upgraded itsnetwork to DOCIs 3.0. Withrespect to mobile networks, therollout of 4g networks continues.Figure 3 illustrates that thenumber of subscribers on Nganetworks now exceeds those onCganetworks.

3.24 a consequence of the growingcoverage of high-speed, high-quality fixed broadband networksis that operators will begin to lookat retiring elements of the legacynetwork such as some or all of thecopper local loop, and the use ofPsTN technology to provide voiceservices. It is probable that themigration to all-IP networks, withvoice provided over IP willaccelerate over the coming fiveyears, although it may not becomplete within that timeframe.


Figure 3: nga and cga subscribers35

1,000,000

900,000

800,000

700,000

600,000

500,000

400,000

300,000

200,000

100,000

0

34 services that provide a speed of greater than 24 mbit/s35 Cga includes Cga Bitstream, Cga saBB & LLU. Nga includes Nga Bitstream, VUa, Cable and FTTH. source: ComReg

Quarterly key Data Report.

Q1

2010

Q2

2010

Q3

2010

Q4

2010

Q1

2011

Q2

2011

Q3

2011

Q4

2011

Q1

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2012

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Q1

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Q2

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Nga

33 source: analysys mason, Forecast February 2016.

2.00

1.80

1.60

1.40

1.20

1.00

0.80

0.60

0.40

0.20

0.002013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

mill

ions

of D

evic

es

Cga

THe eND UseRexPeRIeNCe

eLeCTRONICCOmmUNICaTIONseCOsysTem

INTeRNeTOF THINgs

eVOLVINgNeTWORks

eVOLVINgeUROPeaNRegULaTION

Figure 2: cellular m2m device connections in ireland 2013–202533




3.25 as we look towards 2021, weknow that people and businesseswill be conducting more of theirdaily tasks online, and at the sametime a large number of newdevices will require connectivity.as part of a recent consultationby ComReg on the costs andbenefits of repurposing the700mHz band36 ComRegcommissioned Frontiereconomics to look at the likelydemand for mobile data into thefuture. Frontier ran a number ofdifferent scenarios to look atdemand and under their basecase scenario they estimated thatin 2035, the total data trafficcarried on 3g and 4g mobilenetworks will reach 33 times theircurrent levels.37,38 This increaseduse will have an impact on the

capacity and capability thatnetworks will be required todeliver and will put significantpressure on existing fixed andmobile networks to add capacityto meet end-user demand.

3.26 From an infrastructureperspective it seems likely thatproviding increased capacity willrequire fibre to be pushed outfurther towards the user. Havingfibre closer to the end-user willallow network operators todeliver the capacity needed forfixed networks as well asdelivering capacity for wirelessnetworks.39 With a prediction that78% of Western europe’s internettraffic will be video in 2021, highthroughput networks will berequired.40

It is instructive to look at the predictions of traffic volumes produced by Cisco and others in order toappreciate the impact of end-user demands on electronic communications networks.For example, Cisco predicts that, globally:

n IP traffic will increase nearly threefold over the next 5 years, and will have increased nearly ahundredfold from 2005 to 2020.

n Busy-hour internet traffic (or the busiest 60–minute period in a day) will grow more rapidly thanaverage internet traffic. Busy-hour internet traffic will increase by a factor of 4.6 between 2015and 2020, while average internet traffic will increase twofold, and traffic from wireless andmobile devices will account for two-thirds of total IP traffic by 2020.

n By 2020, wired devices will account for 34 percent of IP traffic, while Wi-Fi and mobile deviceswill account for 66 percent of IP traffic.

n mobile video will increase 9-fold between 2016 and 2021, and by 2021, video will represent 78%of total mobile data traffic.

n The average smartphone will generate 6.8 gB of traffic per month by 2021, a fourfold increaseover the 2016 average of 1.6 gB per month.

n global mobile data traffic will increase sevenfold between 2016 and 2021.

To put this growth in context, global internet traffic in 2020 will be equivalent to 95 times thevolume of the entire global internet in 2005. Broadband speeds are also increasingly rapidly; it isexpected that broadband speeds will nearly double by 2020 reaching 47.7 mbps. mobile connectionspeeds are also increasingly and will surpass 20 mbps by 2021, up from 6.8 mbps in 2016.

With respect to Western europe in particular, Cisco predicts that:

n Internet video traffic will grow 4-fold from 2015 to 2020, a compound annual growth rate of31%. IP video traffic will account for 82 percent of traffic by 2020.

n monthly IP traffic will reach 25 gB per capita by 2020, up from 10 gB per capita in 2015.Internet traffic will reach 21 gB per capita by 2020, up from 7 gB per capita in 2015, and 1 gBper month in 2008.

n In 2000, per capita internet traffic was 10 mB per month, and mobile data traffic will grow6-fold from 2015 to 2020, a compound annual growth rate of 45%, with non-PC devicesproducing 67% of total IP traffic in 2020, up from 42% 2015.

n By 2021, 65% of mobile devices and connections in Western europe will have 4g+ capability.

(source: Cisco Visual Networking Index, June 2016 and global mobile Data Traffic Forecast Update, 2016–2021 White Paper, February 2017)

ExPlanatory Box 4: PrEdicting FuturE traFFic volumEs

WITH a PReDICTION THaT78% OF WesTeRNeUROPe’s INTeRNeTTRaFFIC WILL Be VIDeO IN2021, HIgH THROUgHPUTNeTWORks WILL BeReQUIReD.

36 see ComReg Document 15/62, 15/62a and 15/62.37 This level of growth corresponds to a Compound average growth Rate (CagR) of 18% for the period. The initial period

of modelling up to 2025 has a higher CagR of 28% falling to more conservative 9% for remaining years to reflect theinherent complexities of forecasting long-term growth.

38 Frontier economics, 2015, a Cost Benefit analysis of the Change in Use of the 700 mHz Radio Frequency Band In Ireland– a Report Prepared for ComReg, June.

39 Fibre to base stations and small cells will allow wireless operators to provide the capacity for their users.40 Cisco Visual Networking Index, June 2016 and global mobile Data Traffic Forecast Update, 2016–2021 White Paper,

February 2017.



3.31 The Commission’s ambitions forthe Dsm extend beyondeconomic benefit however. TheCommission also notes that aninclusive Dsm offersopportunities for citizens,provided they are equipped withthe right digital skills. enhanceduse of digital technologies canimprove citizens’ access toinformation and culture, improvetheir job opportunities. It canpromote modern opengovernment.

3.32 The Dsm is built on three pillars:

n access: better access forconsumers and businesses todigital goods and services acrosseurope

n Environment: creating the rightconditions and a level playing fieldfor digital networks and innovativeservices to flourish,and,

n Economy and society:maximising the growth potential ofthe digital economy.


3.27 global IP traffic from non-PCdevices was 42% of total IP trafficin 2015, and will be 67% of total IPtraffic in 2020 (see explanatoryBox 4).41 Non-PC devicesgenerally require some type ofwireless connection betweenthemselves and the physicalnetwork. The move towardsmobile devices and user mobilitywill present challenges for howspectrum is managed tomaximise its efficientuse.

3.28 Network architectures mayrequire new levels of complexitydue to different requirementsbeing placed on them. Thesenetworks will need to be capableof providing people with highcapacity, while accommodatingthe connection of a large numberof new ‘things’ which will havedifferent network requirements.as end-user demands evolveand different use-cases andbusiness models becomeestablished, it is difficult to sayhow the underlying technologyand infrastructure will evolve.While still in the specificationstage, 5g is aiming to provide aflexible and adaptive operatingstandard that will be able to bedeliver connectivity over a widerange of licensed and licence-exempt spectrum. This is an areawhere we will continue tomonitor andresearch.

Evolving regulation3.29 as evidenced above, electronic

communications markets arehighly dynamic with newtechnologies and sectoral playersemerging, in some cases rapidly.In order to provide effective andappropriate responses, theregulatory environment mustalso be dynamic and responsive.The necessity for this has beenrecognised at a european level.Under its Digital single market(Dsm) strategy, the Commissionhas proposed a modernisation ofthe current eU eCF.

3.30 electronic communicationsmarkets are one component ofthe Dsm. The vision for the Dsm isof a european internal market inwhich free movement is ensuredand where the individuals andbusinesses can seamlessly accessand exercise online activitiesunder conditions of faircompetition, and a high level ofconsumer and personal dataprotection, irrespective of theirnationality or place of residence.The Dsm strategy, adopted onthe 6 may 2015, includes 16initiatives which, the Commissionestimates, once implementedcould contribute €415 billion peryear to europe’s economy, createjobs and transform publicservices.42

41 Ibid.42 see: https://ec.europa.eu/commission/priorities/digital-single-market_en

aCCess TOINFORmaTION

JOBOPPORTUNITIes

mODeRN OPeNgOVeRNmeNTCULTURe



3.33 Within the environment pillarfalls those Dsm strategies relatingto electronic communicationsmarkets. In particular, Dsmstrategy proposes a revision to theregulatory framework. Inseptember 2016 the Commissionpublished a draft directiveestablishing the eCC (seeexplanatory Box 5 for morediscussion of the draft eCC andComReg’s views). TheCommission has stated that theprovisions of the eCC areintended to stimulate increasedcompetition and investment,enhance consumer protectionmeasures and reform theinstitutional setting.

3.34 The draft eCC and BeReCRegulation are now subject to theeU legislative process, which willinclude input from both theeuropean Parliament andmember states (through theCouncil). ComReg will play anactive role during this process byproviding expert andindependent advice, asrequested, and, through itsmembership of BeReC, to theeuropean institutions. ComRegalso recognises the challenge foritself, as an institution, to evolvein response to any changes in theregulatory framework, ensuringthat we continue to be aneffective and relevant regulator.


43 Proposal for a Directive of the european Parliament and of the Council establishing the european electronicCommunications Code.

In september 2016 the Commission published a draft directive establishing the european electronicCommunications Code (eCC)43 , which is intended to replace the Framework, access, authorisation and Universalservices Directives that comprise the current Framework into a single recast and updated Directive. TheCommission has claimed that the provisions of the eeC are intended to:

n Increase competition and predictability for investments

n stimulate competition and reduce regulation where rival operators co-invest in very high-capacity networks

n Provide for better use of radio spectrum, including longer licence durations

n ensure stronger consumer protection, with a particular focus on ensuring that vulnerable groups have theright to affordable internet contracts, and

n Create a safer online environment for end-users and fairer rules for all players, including, whereproportionate, new online players (i.e. OTTs).

In a further proposed update to the regulatory landscape in europe, the Commission also published its draftproposals to update the BeReC Regulation. The Commission stated its intention in this revised legislation is toreinforce both the role of NRas and BeReC to ensure a more coordinated, harmonised application of the rulesthroughout the eU.

ComReg welcomes the Commission’s proposal to update the Framework to reflect the technological andcompetitive developments in the telecoms market and supports the retention of the core regulatory objectivesof the current Framework, namely, the promotion of competition, the internal market and the interests of enduses. ComReg also supports the Commission’s proposal to raise the profile of the specific objective ofpromoting connectivity, without prioritising one regulatory objective over another. However, ComReg has anumber of concerns about the eCC. In particular, ComReg’s preliminary opinion is that certain provisions arenot justified and inappropriate, while others have the potential to reduce ComReg’s flexibility to adapt tonational circumstances and may not contribute to the intended outcomes. These include:

n european Commission veto power on proposed remedies

n mandatory peer-review of spectrum management decisions by BeReC, the european Commission andother national regulatory authorities

n setting a licence duration of at least 25 years for harmonised spectrum

n The european Commission power to adopt binding implementing acts on specific aspects of spectrummanagement

n maximum harmonisation for end-user provisions

n The conversion of BeReC into an eU agency, where the executive Director would not be drawn from an NRa,and

n Light or no regulation in circumstances where certain co-investment criteria are met.

The draft Communications Code and BeReC Regulation are now subject to the eU legislative process, which willinclude input from both european Parliament and member states (through the Council). ComReg will play anactive role during this process by providing expert and independent advice, as requested, and, through itsmembership of BeReC, to the european institutions. ComReg also recognises the challenge for itself, as aninstitution, to evolve in response to any changes in the regulatory framework, ensuring that we continue to bean effective and relevant regulator.

ExPlanatory Box 5: thE draFt communications codE (Ecc)



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4.1 ComReg’s role is to ensure thatcommunications markets operateeffectively in the interests of end-users and society. Througheffective and relevant regulation,we facilitate the development of acompetitive communicationssector in Ireland that attractsinvestment, encouragesinnovation and empowersconsumers to choose and usecommunications services withconfidence.

4.2 The tools we have to deliver ourrole and mission can becategorised into four broad areas:

n Competition

n Consumer Protection

n Investment, and

n Compliance and enforcement.

4.3 Underpinning our ability todeliver is the development of ourorganisation. This relationship iscaptured in our strategicframework which is illustrated inFigure 4 above.

COmReg’s sTRaTegIC INTeNTsCOmReg’s sTRaTegIC INTeNTs

4.4 given the trends identified inChapter 3, we have developedfive statements of strategicintent, describing what we hopeto achieve over the next fiveyears through the use of thetools at our disposal.


Figure 4: ComReg’s strategic Framework

Vision Mission role PrinciPlEs

setting the rules for effective competition

protecting and informing consumers

Creating the conditions for investment

THe TOOlsaT Our

dIspOsalensuring compliance with regulatory obligations

effectivestakeholderengagement

a deepunderstanding

of marketsincluding relate

markets

robust dataanalyticsincluding

service qualityand availability

HOw wesuppOrTOur rOle

Maintaining an agile, skilled and motivated organisation

Integrity Impartiality effectivenessexcellence Transparency

OurValues

strategic intent 01:

comPEtitionsetting therules forcompetition

The market deliversinnovation and thegreatest possible choiceof wholesale and retailoperators

Protecting and informingconsumers4.6 Protecting and informing

consumers involves setting rulesto ensure that consumer canaccess basic services, that theyare armed with the informationthey need to engage with themarket with confidence. Thestrategic intent associated withthis role is that consumers canchoose and usecommunications services withconfidence. Better informed end-users who are ready and able toswitch providers, help drivecompetition.

competition4.5 setting the rules for effective

competition involves settingmarket rules relating to marketaccess and the conduct ofoperators with significant marketpower. It is also involves effectivemanagement of the spectrumand numbering resources asessential inputs in the supply ofservices in electroniccommunications markets. Thestrategic intent associated withthis role is that the marketdelivers innovation and thegreatest possible choice ofwholesale and retail operators.

strategic intent 02:consumErProtEction

Protectingandinformingconsumers

Consumers can chooseand use communicationsservices with confidence


COmReg’s sTRaTegIC INTeNTsCOmReg’s sTRaTegIC INTeNTs

4.11 To enable us to undertake our roleand adapt to the changingexpectations we believe we will needto continue to focus on being aneffective and relevant regulator. Wesee the fundamental elements ofthat as including effectivestakeholder engagement, robustdata analytics (including servicequality and availability), a deepunderstanding of markets, includingrelated markets, and maintaining anagile, skilled and motivatedworkforce. We also recognise theneed for adequate resourcing todeliver on ourstrategy.

4.12 The electronic communications sectoris fast-moving, complex andincreasingly fundamental to thefunctioning of Irish society andbusiness. We recognise that we needto continually reflect on our activitiesand change as necessary in order tobest fulfil our mission and uphold ourvalues in the face of changingdemand, changing consumerbehaviour, changing technologies anda changing internationalenvironment.

4.13 In Chapters 5 to 9 we set out thestrategic goals associated with eachof these five strategic intents.

creating conditions forinvestment

4.7 effective competition is the principaldriver of efficient investment and assuch ComReg seeks to create theconditions for investment primarilyby promoting competition. Thisinvolves promoting efficientinvestment and innovation in newand enhanced infrastructures,including by ensuring that accessobligations take appropriate accountof the risk incurred by those makinginvestment in infrastructure. Thestrategic intent associated with thisrole is that efficient investment hasenabled affordable, high-qualityand widespread access tocommunications services andapplications.

4.8 Where additional investment isrequired to achieve desired marketoutcomes, beyond what would bedelivered in an effectively competitivemarket, for example, in relation toconsumer protection measures, suchinvestment should be undertaken in amanner which creates minimalmarket distortions and does not, forexample, crowd out commercialinvestment. Further, creating theconditions for investment involvesundertaking our regulatory functionsin an appropriate and predictablefashion, thus providing regulatorycertainty, increasing attractiveness ofthe sector to investors.



invEstmEntcreating theconditionsforinvestment

efficient investment hasenabled affordable, high-quality and widespreadaccess to communicationsservices and applications

strategic intent 04:EnForcEmEnt& comPliancE

Ensuringcompliancewith regulatoryobligations

Regulated entitiescomply withregulatoryobligations


organisation

organisation We are an effective andrelevant regulator

organisation4.10 The perpetual challenge of being an

effective and relevant regulator ofelectronic communications markets iskeeping up with technological andmarket developments. It is clear thatthe electronic communications sectorsand related markets are becomingmore complex and that where oncethere may have been bright linesbetween different parts of the eco-system, this is increasingly not thecase.

Enforcement andcompliance

4.9 Regulatory obligations have no effectunless regulated entities comply withthem. It is ComReg’s function toensure compliance by operators withobligations. such obligations maystem directly from the legislation orfrom measures implemented byComReg in the exercise of itsregulatory functions. an effectivecompliance and enforcement strategyunderpins the previous three strategicintentions. The strategic intentassociated with this role is thatregulated entities comply withregulatory obligations. a keyconsideration informing ComReg’sstrategy in relation to enforcementand compliance is that incentives tocomply with obligations arise fromexternal factors relating to thedeterrent effect of the regulatoryregime as well as factors internal tothe regulated operator.



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seTTINg THe RULes FOR eFFeCTIVe COmPeTITIONseTTINg THe RULes FOR eFFeCTIVe COmPeTITION

5.7 This Chapter sets out ComReg’sstrategic goals associated withsetting the rules for effectivecompetition with the high levelobjective of realising electroniccommunications markets whichdeliver innovation and thegreatest possible choice ofwholesale and retail operators.as illustrated in Figure 5,ComReg’s view is that regulatingto drive competitioninvolves:

n monitoring markets,including related markets,such that market failures arewell-understood, thus,

n enabling targetedintervention,

n aimed at facilitatingcompetition.

5.8 ComReg recognises that this is adynamic process requiringcontinual monitoring, updatingand adjustment, and that overtime, the scope of regulationshould reduce.

introduction5.1 Our guiding principle is that

effectively competitive marketsdeliver optimal outcomes interms of investment and price,quality, choice and innovationbenefiting consumers.

5.2 We recognise that markets, evenwell-functioning ones from acompetition perspective, do notalways deliver outcomes whichare adequate from society’sperspective. Our regulatoryinterventions should be designedsuch that they give rise tominimal market distortions.

5.3 ComReg recognises the differencebetween so called static efficiencyand dynamic efficiency.Interventions aimed at promotingstatic efficiency mean drivingprices toward cost in the shortterm. Dynamic efficiency on theother hand, refers to investmentand innovation over time. To theextent that driving prices towardscost in the short term reducesincentives to innovate over time,there is a trade-off.

5.4 This trade-off is especiallyimportant in electroniccommunications markets wheretechnology changes rapidly and,as a consequence, significanteconomic welfare gains may beavailable where innovation isfacilitated.

5.5 In this context, ComReg alsorecognises that developments inrelated markets are importantfrom a competition perspective. Inparticular, ComReg recognisesthat investment and innovation inelectronic communicationsmarkets will come not only fromtraditional operators (in fixed andmobile markets) but also fromother operators, such as OTTservice providers.

5.6 When carrying out our functionsin pursuit of this first strategicintent, ComReg will considerappropriate measures topromote competition (e.g. newentry) where objectively justifiedand proportionate and minimisedistortions in those marketsdirectly affected, as well as inrelatedmarkets.


strategic intent 01: thE markEt dElivErs innovationand thE grEatEst PossiBlE choicE oF wholEsalE andrEtail oPErators.

whatdoesthislooklike?

n There is a choice of providers in wholesale and retail electroniccommunications markets

n Competition is as strong as possible; with rules to mitigate harmwhere competition is weak

n Quality of electronic communications products and services is amongthe highest in our peer group

n There is clear evidence of:− Competition over time

− Innovation in electronic communications and in related markets, and

− Consumers exercising choice

monitoring markets

Facilitatingcompetition

targetedintervention

competition in Fixed andmobile marketscompetition on fixednetworks5.9 Two forms of competition

involving fixed electroniccommunications networks can bedistinguished: services-basedcompetition and infrastructure-based competition. Pure services-based competition is said tooccur where entrant operatorsutilise the incumbent’s networkto supply their own services,without making infrastructureinvestments of their own. Pureinfrastructure-based competitionoccurs when entrants makeinvestments in infrastructure anddo not rely on inputs supplied bythe smP operator to compete forcustomers in downstreammarkets.

Figure 5: regulating to drive competition



essentially involves a reselling of theincumbent’s product. However,facilitating service level competitiondoes enhance competition, forexample, by allowing operators tooffer a full bundle of services.moreover, the promotion of servicelevel competition, as part of aregulatory strategy to facilitate entryand expansion, allows entrantoperators to establish a subscriberbase and attain scale economiesbefore making the requisiteinfrastructure investment necessaryfor infrastructure-basedcompetition.

5.12 In Ireland, eircom is the formerincumbent monopoly fixed networkprovider. eircom’s network hasalmost ubiquitous coverage of the 2million premises in the state. since2011 eircom has also been rollingout its next generation accessnetwork, based on fibre to thecabinet (FTTC), exchange-launchedVDsL (eVDsL) and fibre to the home(FTTH) technology. eircom’s nextgeneration access network passes1.6 million premises, currentlyserving approximately 500,000subscribers.46

5.13 eircom faces varying degrees ofindependent network levelcompetition from both Virgin mediaand sIRO, the latter being a jointventure between esB Networks andVodafone. Virgin media’s networkpasses 807,50047 premises (almostall of these being homes), with367,70048 internet subscribers.Virgin media’s network is largelyconfined to the urban areas of

Dublin, Cork, galway, Limerick, andWaterford. sIRO, which commencedrollout of an Nga network in 2015,is a more recent entrant to thesector and, to date, network rolloutis limited, reported to be around36,500 homes passed.49 sIRO hasannounced plans to pass 500,000premises in 51 towns by the end of2018.50 There are also a number ofother network operators, e.g.,magnet.

5.14 eircom also faces competition fromBT, Vodafone, sky and a variety ofother smaller operators (includingfixed wireless operators) who havemade varying levels ofinfrastructure investment, in largepart due to the availability ofwholesale access productsmandated by regulation. as is to beexpected, the extent ofinfrastructure rollout is deeper inurban areas where thepopulation/premises densities aregreater. In such areas BT andVodafone have moved further upthe ladder of investment (seeexplanatory Box 6 for a discussionof the ladder of investment).

competition on mobilenetworks

5.15 as with fixed networks there aretwo main forms of competition inthe mobile sector. First there isnetwork level competition betweenthe mobile network operators(mNOs). second, there is a form ofservice level competition whichinvolves so called mobile virtual

5.10 In practice, there are degrees ofcompetition between these twoextremes which involve serviceproviders making certaininfrastructure investments and thenpurchasing appropriatecomplementary wholesale inputssuch as bitstream access.44 Ingeneral, over time greater or“deeper” investment is made bycompeting service providers in moredensely populated areas than inother less densely populated areas

where such investment cannot besupported by a more thinly spreadsubscriber base.

5.11 Competition based on “deeper”network investment allows entrantoperators a greater degree ofcontrol of the products and servicessupplied over those networks as wellas the price they are supplied at.Pure service level competition isregarded as being much less capableof delivering the benefits associatedwith robust competition as it


44 Bitstream access is a wholesale product that consists of the provision of transmission capacity in such a way as to allowaccess seekers to offer their own retail broadband service (or other value-added services) to end-users. Bitstreamrequires the existence of a copper or fibre access path (or hybrid of copper and fibre) but does not grant the accessseeker control over the access path nor are they allowed to add other equipment.

45 Cave, martin, 2006, encouraging Infrastructure Competition via the Ladder of Investment. Telecommunications Policy,Volume 30 (Number 3-4). pp.223-237.

46 source: ComReg Quarterly key Data Report, Q4 2016 at :https://www.comreg.ie/publication/irish-communications-market-quarterly-key-data-report-data-q4-2016/

47 source: Virgin media Consolidated Financial statements 2016 at: http://www.libertyglobal.com/pdf/fixed-income/Virgin-media- December-31-2016-FINaL.pdf

48 source: ComReg Quarterly key Data Report, Q4 2016.49 source: https://www.siliconrepublic.com/comms/siro-ftth-broadband50 source: http://siro.ie/siro-invest-e40-million-roll-6-new-towns-end-2016/

The reason for access regulation in the electronic communications sector is to develop competition.effective competition drives prices down, improves quality, and delivers more choice and innovation in themarketplace. Certain industries (like electronic communications, electricity and water) have high barriers toentry such that, without regulatory incentives, entrants may be slow or unable to surmount the entrybarriers and competition can be slow to emerge, if it does at all.There are two main ways of trying to promote this competition, one is through providing competitorsaccess to certain parts of the incumbents network (in this case eircom), in addition to service providerssupplying termination, or by providing investment, or regulatory incentives to rollout a competing network.The ladder of investment approach proposed by martin Cave45 tries to encourage service-based entry andinfrastructure-based entry as complements in promoting competition. This approach attempts to balancethe trade- off between short-term gains from service-based competition without impeding facility-basedentry in the longer term.The ladder involves a number of ‘rungs’ which the competing providers can ‘climb’, as a competitor climbsthese rungs they are required to make greater investments but this is rewarded with greater control overthe network as well as being able to utilise scale and increase their operating margin. The rungs can rangefrom pure resale of the incumbents services to local-loop unbundling which gives the competitor access tothe copper pair to the home and nothing else.

ExPlanatory Box 6: thE laddEr oF invEstmEnt



network operators (mVNOs)purchasing capacity from one of thenetwork operators, instead ofbuilding their own mobile accessnetwork (towers, masts andassociated backhaul). a keydifference between the mobile andfixed network competition is thatwhereas the incumbent operatoreircom is required by regulation tooffer wholesale access products toother service providers and thusfacilitate the emergence ofcompetition, no such regulatorymeasures are in place in, or havebeen deemed necessary, withrespect to mobile networks (seeexplanatory Box 7 for a discussionof the markets susceptible to exante regulation).

5.16 another key difference withcompetition in mobile networks isthe presence of commercialnetwork sharing arrangements.Network sharing arrangementsallow two or more networkoperators to share certain parts oftheir networks. In mobile networks,sharing arrangements can rangefrom the sharing of passiveinfrastructure (such as sites, mastsand antennae) to more active partsof their network including somecore infrastructure. The benefits formobile operators in sharinginfrastructure is an ability to reducecosts.51 On the downside there maybe a diminution of competition as

operators lose control over somenetwork operations and strategictechnology choices.

5.17 at present there are three principalmNOs offering services over mobilenetworks in which they haveinvested in themselves; eircom,Vodafone and Three. Three andeircom however, operate a networksharing arrangement. There are alsoa number of mVNOs, for example,Tesco mobile and iD who do nothave their own networks, but haveinstead entered into agreementswith Three enabling them to supplymobile services. Other mVNOsinclude Virgin media, Lycamobileand Postfone.

the state of competition inretail markets – fixed andmobile

5.18 Figure 6 below shows the level ofmarket concentration in retail fixedbroadband, fixed voice and mobilevoice markets. With respect to thefixed markets, the gradual decline inretail market concentration which isconsistent with a much longer termtrend, for voice and broadband, isindicative of increased competitionin these markets. The caveat is that,at the moment, there is limitedfacilities based competition outsideof the most urban areas.52


51 Communities can also be favourable to sharing arrangements as it can reduce the number of cell-sites required toprovide service or they get access to connectivity sooner due to reduced network deployment costs for the operators.

52 One exception to this characterisation is the leased lines market where facilities based competition has emerged evenoutside the most urban areas.

Figure 6: retail concentration (hhi), Q2 2013 – Q4 201653

3,5003,4003,3003,2003,1003,0002,9002,8002,7002,6002,5002,4002,3002,2002,1002000

Q2 2013Q3 2013

Q4 2013Q1 2014

Q2 2014Q3 2014

Q4 2014Q1 2015

Q2 2015Q3 2015

Q4 2015Q1 2016

Q2 2016Q3 2016

Q4 2016

Fixed VoiceFixed Broadband mobile Voice

HH

I Lev

el in

poi

nts

53 source: ComReg Quarterly key Data Report.



5.24 In this context ComReg considers itwould be desirable for theeffectiveness of competition tobe regularly monitored acrosscommunications markets,including fixed and mobile, andrelated markets.

5.25 This activity would complementthe analysis of markets under theaccess Regulations. It wouldprovide context for the use ofour regulatory powers inrecommended markets. Further, itwould help us identify where wemight consider discretionary useof our existing powers, such asconducting market analysis of non-recommended markets under theregulatory framework.

5.26 The activity would also help us toidentify the potential for marketfailures in electroniccommunications markets thatmay cause problems in othermarkets, and vice versa. Inparticular, it would enable us toknow whether innovation inrelated markets was beingenabled or inhibited bycharacteristics of electroniccommunications markets. Thiscould identify whether theregulatory regime needs to beenhanced so that these issuescan be addressed.

5.27 This would also guide ourpriorities in considering whatfurther regulatory action toconsider, or what additionalpowers we might need. (In thisregard, we note that in someother jurisdictions, such as theUk, the powers under the eCF arecomplemented by powers undernational competition law toaddress market failures that arisefrom market characteristics otherthan significant market power.)Unlike market analysis under theaccess Regulations, this type ofassessment would not leaddirectly to the imposition ofregulatory obligations, so that theinitial assessments could beconducted at a higher-level withmore detailed assessment beingconducted whereneeded.

5.28 This type of activity, is notmandated by the legalframework. Despite itsimportance, it therefore has to bea lower priority pending ComRegsecuring sufficient staff toresource the task. The scope ofthe monitoring activity will bedetermined by resourceavailability and by the degree oflinkage between the marketsbeing monitored and the coreelectronic communicationsmarketsthat we are bound toregulate.

5.29 In the context of this goaltherefore, over the coming period:

n market monitoring:ComReg will initiate, onceresources are available, aprogramme of work whichwill aim to develop ourunderstanding ofcompetition in fixed, mobileand related markets. This

5.19 The figure illustrates a differentstory on the mobile side. Thejump in the measure of marketconcentration corresponds to theacquisition by Three of O2 in mid-2014. Up until the merger, thelong term trend in retail mobilemarkets had been one ofdecreasing concentration. Theprincipal consequence of mobilemerger was to eliminate anetwork level competitor. Thepackage of remedies accepted bythe european Commissioninvolved the creation of twomVNOs. Furthermore, while onenetwork sharing arrangementwasterminated as a consequenceof the merger, another networkshare was amended andstrengthened. The ultimateimpact on competition in mobilemarkets remains to be seen.

monitoring markets5.20 To effectively regulate electronic

communications markets, it isimportant to have anunderstanding of how wellmarkets are working, where themarket failures are, and howdifferent markets - fixed, mobileand related markets – affect oneanother.

5.21 ComReg devotes substantialresources to conducting marketanalysis required by theregulatory framework. Thepurpose of this market analysis isto determine whether anyoperator has significant marketpower and if so how any

competition problems might beremedied. The europeanCommission has maderecommendations as to whichmarkets are to be analysed andfor the methodology to be used.

5.22 However market power is not theonly reason that markets may notwork well or deliver outcomeswhich society deems adequate.markets may not work well, or asexpected, due to the presence of,for example, asymmetries ofinformation, externalities or evenbehavioural biases, as well as dueto the fundamentaluncommercial nature ofsupplying certain markets ormarket segments.

5.23 We consider it important forComReg to complement marketanalysis under the regulatoryframework with monitoring theeffectiveness of competition inother markets within theelectronic communications eco-system. This can includeelectronic communicationsmarkets that are no longerrecommended for marketanalysis (such as wholesaleaccess to mobile networks54),markets involving the supply ofessential inputs (such as accessto poles, ducts and cell sites),markets for products that arecommonly bundled with eCs(such as media content), andmarkets for products thatcritically affect the end-user’sexperience of eCs (such asmobile handsets).


54 see explanatory Box 7 for a discussion of the Commission’s recommendations on markets susceptible to ex anteregulation.

effectiveness of competition regularlymonitored across communicationsmarkets, including fixed and mobile, andrelated markets.

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in the marketplace should suchchoices materialise (for example, inthe event of entry).

5.33 across each of these categories ofactivity, ComReg seeks topromote effective competitionand facilitate consumer choicewithin the single market. asnoted in Chapter 2, from aneconomic perspective, the notionof a single market goes hand inhand with the objective topromote competition. Byfacilitating entry and expansion innational and regional markets,competition is enhanced andusers enjoy the associatedbenefits in terms of price, choiceand quality.

market access: the smP Framework

5.34 The ability to enter markets andgrow market share by competingon the merits is fundamental tothe notion of effectivecompetition. ComReg’s strategicgoal in relation to promotingeffective competition through thesmP Framework is that regulationmitigates market power andfacilitates market entry andexpansion where feasible inwholesale and retail electroniccommunications markets.

5.35 Under the regulatory framework,where an operator is identified ashaving significant power in a givenmarket, ComReg may impose onsuch an operator a range of pro-

competitive obligations asappropriate, including thoserelating to access, pricing, non-discrimination and transparency.such obligations are designed topromote competition by enablingentrants to compete on a levelplaying field with the smPoperator. In this context it isimportant that access seekersenjoy an adequate quality ofservice in supply of wholesaleinputs by the smP operator. Withinthe smP Framework, ComRegcurrently regulates nine markets(see explanatory Box 7).

5.36 In examining whether electroniccommunications markets warrantsmP regulation it is oftennecessary to distinguish betweenretail (or downstream) marketswhere operators sell services toconsumers, and wholesale (orupstream markets) whereoperators sell wholesale inputs toother operators, which they then,in turn, use to deliver retailservices to consumers (and/orwholesale services to otheroperators). ComReg’s objectivesare to only impose regulation toaddress those markets wherecompetition is not likely to beeffective and, in doing so, toaddress competition concerns byimposing regulatory obligations atthe most upstream level possible.In practice this typically involvesregulation aimed at addressingbottlenecks at the wholesale ratherthan the retail level. Wherewholesale regulation deliverseffective competition indownstream retail markets,ComReg will exit regulation ofthose retail markets. ComReg willalso exit regulation of wholesalemarkets where effectivecompetition develops.

programme of work willcomplement the deepermarket assessments that arecarried out in the context ofthe smP Framework (seebelow) and will be used toinform ComReg’s activitiesacross the breadth of itsfunctions.

n market investigationpowers: ComReg will studythe experience of otherjurisdictions in using marketinvestigation-type powerswhich allow agencies to carryout detailed marketexaminations and imposeremedial measures wherecompetition is not workingwell, and will advocate forsuch powers in Ireland if weconsider themappropriate.

5.30 This leads to the motivation forComReg’s second goal. specifically,it is ComReg’s goal that regulationof electronic communicationsmarkets is targeted atmitigating market failure andpreventing harm. a developedunderstanding of why marketsmay not be working well for end-users will allow ComReg to bettertarget regulatory interventionsacross the breadth of its functions.moreover, in this context, anunderstanding of related marketswill facilitate an awareness of thepotential that the regulation of

electronic communicationsmarkets has to inhibit innovationand the realisation of welfaregains.

Promoting competition andconsumer choice5.31 There are three principal ways in

which ComReg may promotecompetition and consumer choicein electronic communicationsmarkets:

n Promoting competition viathe smPFramework

n ensuring that themanagement of the nationalspectrum and numberingresource takes account of thepotential impact that theassignment and allocation ofthese essential inputs mayhave on downstreammarkets, and

n ensuring customer mobility(i.e. that customers arewilling and able to switch inresponse to better deals inthe marketplace).

5.32 While the first two types ofintervention are primarily supply-side interventions related to theavailability of those inputsnecessary to enter and compete inmarkets, the latter is a demand-side intervention whose purpose isto ensure the user is free to takeadvantage of the choices available


Regulation of electronic communicationsmarkets targeted at mitigating marketfailure and preventing harm.

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Our work seeks to promote effectivecompetition and facilitate consumerchoice within the single market.

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Regulation mitigates market power andfacilitates market entry and expansionwhere feasible in wholesale and retailelectronic communications markets.

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5.37 Where smP regulation isnecessary however, ComRegwill continue to focus on theimposition of obligations thatencourage both infrastructureand service based competitionas they are complementaryand support the ‘ladder ofinvestment’ principle (seeexplanatory Box 6). ComReg’sregulatory approach will, however,seek to facilitate opportunities thatenable greater infrastructurebased competition, whereappropriate, as this ultimatelyenables the development of moreeffective and sustainablecompetition In this respect, whereappropriate we will continue toseek to impose obligations thatenable operators to gain effectiveaccess to smP operator’s passiveinfrastructure network assets,including access to ducts, poles,dark fibre and other necessaryassociated facilities.

5.38 eircom has been designated ashaving smP across a range ofwholesale markets, as well as insome retail access markets.ComReg has imposed a range ofregulatory obligations on eircomdesigned to promote competitionby enabling other operators tocompete on a level playing fieldwith eircom. However, despite theimposition of these regulatoryobligations, ComReg has concernsthat, given eircom’s verticallyintegrated structure (whereby itcompetes at both the retail andwholesale levels) and its smPposition in certain markets, that ithas both the ability and theincentive to engage in behavioursthat discriminate againstcompeting operators.

5.39 It is our view that while de-regulation of retail anddownstream wholesale markets isdesirable this process depends toa large extent on the effectivenessof regulation in upstreammarkets. We have in the recentpast imposed proportionateremedies in wholesale marketswhich we believe will increase thechances of this happening. as anexample we are currentlyproposing to mandate theincreased use of equivalence ofInputs whereby eircom must usethe same IT systems to supply itsRetail arm and its Wholesalecustomers. We are also proposinga more detailed specification ofobligations governing operators’access to eircom’s passiveinfrastructure, including its ducts,poles and other physical networkassets.

5.40 In relation to this goal, over thecoming period:

n market analysis: ComReg isrequired to periodicallyupdate its assessment ofmarkets. ComReg devotessubstantial resources to thisactivity and is currentlyanalysing the markets set outin the Commission’s 2014Recommendation. markets 1and 2 are wholesale fixedvoice call termination andmobile voice call terminationmarkets and ComReg expectsto issue a public consultationon an updated analysis ofthese termination markets in2017. markets 3a and 3b arewholesale local access andwholesale central accessmarkets. ComReg published apublic consultation on thesemarkets in 2016 and expects


55 The Commission Recommendation of 9 October 2014 on relevant product and service markets within the electroniccommunications sector susceptible to ex ante regulation in accordance with Directive 2002/21/eC of the europeanParliament and of the Council on a common regulatory framework for electronic communications networks andservices.

ComReg is responsible for assessing whether certain electronic Communications markets in Irelandare effectively competitive in accordance with the eCF as transposed into national law. Thesemarkets have changed over time and are identified in various european Commissionrecommendations. The current recommendation is the 2014 Recommendation on RelevantProducts and service markets55 (the “2014 Recommendation”) and it identifies five markets as beingsusceptible to ex ante regulation.

n market 1: Wholesale call termination on individual public telephone networks provided at afixed location

n market 2: Wholesale voice call termination on individual mobile networks

n market 3a: Wholesale local access provided at a fixed location

n market 3b: Wholesale central access provided at a fixed location for mass-market products;and

n market 4: Wholesale high-quality access provided at a fixed location.

ComReg’s analyses of the markets identified in the 2014 Recommendation are currently under way.Therefore, the existing decisions are based on markets identified in the previous Commissionrecommendation from 2007. ComReg, subject to certain conditions being satisfied, may alsoregulate markets not identified by the Commission as being susceptible to ex ante regulation.ComReg regulates a number of markets on this basis.

The markets that ComReg currently regulates based on a finding of smP are:*

n Wholesale Call Termination on Individual Public Telephone Networks Provided at a FixedLocation (01/2014)

n Wholesale Voice Call Termination on Individual mobile Networks (02/2014)

n Wholesale local access provided at a fixed location (03a/2014)

n Wholesale central access provided at a fixed location for mass-market products (03b/2014)

n Wholesale high-quality access provided at a fixed location (04/2014)

n Retail access to The Public Telephone Network at a Fixed Location (01/2007)

n Wholesale Fixed access and Call Origination on the Public Telephone Network Provided at aFixed Location (02/2007)

n Broadcasting market a – Wholesale access to National Terrestrial Broadcast Transmissionservices (18/2003)

n Broadcasting market B – Wholesale access to DTT multiplexing services (18/2003)

* The naming convention notes the market number and the year of the relevantrecommendation. For instance, (02/2014) refers to market 2 of the 2014 Recommendation.

ExPlanatory Box 7: markEts suscEPtiBlE to Ex antE rEgulation



such as functional separationwould need to be considered.We stated that we wouldconduct a review of theeffectiveness of theprogramme once it had beenin place for a sufficient lengthof time. In this context in2016 ComReg thereforebegan a review of eircom’sregulatory governance froman operational and structuralperspective with theobjective of establishingwhether its regulatorygovernance arrangementsand practices are and can besufficiently robust to theextent that they demonstrateand ensure ongoingcompliance with regulatoryobligations. The outcome ofthe review will assist ComRegin identifying whether anyfurther actions arerequired.

5.41 Finally, outside the smPFramework, ComReg has a role infacilitating access to physicalinfrastructure for the purpose ofproviding electroniccommunications under section57 of the 2002 act and also underthe Broadband Cost ReductionRegulations.58

5.42 section 57 of the 2002 act setsout a network operator’s right tonegotiate an agreement to sharephysical infrastructure with aphysical infrastructure providerfor the purpose of providingelectronic communicationsservices. ComReg’s role undersection 57 of the 2002 act is to :

n specify the period forcompletion of negotiations,and

n To act as the disputesettlement body in the eventof a dispute arising inrelation to the negotiation ofphysical infrastructuresharing. ComReg haspublished its process tohandle disputes arising inrelation to section 57 of the2002 act. 59

5.43 The Broadband Cost ReductionRegulations became effective on20 July 2016 and their primarypurpose is to put in place aframework of rights andobligations for network operatorsaimed at facilitating and reducingthe cost of deploying high-speedpublic communications networksultimately to the benefit ofbusinesses and consumers. TheBroadband Cost ReductionRegulations are of relevance topublic communications networkoperators (such as broadbandnetwork providers) and utilitiesnetworks operators (i.e. thoseoperating in the gas, electricity,water, rail, road, ports andairportssectors).

5.44 ComReg has three functionsunder the Broadband CostReduction Regulations, namely:

n The function of ensuringcompliance with theBroadband Cost ReductionRegulations.

n The functions of the nationaldispute settlement body in

to make a final determinationin 2017. market 4 relates towholesale high-quality accessand ComReg issued a publicconsultation on its analysis in2016, and a decision is alsoexpected to issue in 2017.

n legacy networks: Theremedies imposed on eircominclude an obligation not towithdraw access to facilitiesonce granted withoutComReg’s consent.56 Ifeircom wishes to migrate toan all-IP network, this wouldlikely involve withdrawal ofor changes to certainwholesale (and retail)products and services.ComReg has alreadypublished a call for inputs onthe implications of copperwithdrawal57 in which wehighlighted the need toensure that there is noadverse impact oncompetition and thatconsumer rights are upheldduring the transition. In July2016 eircom wrote toComReg requesting priorapproval for the retirementof legacy networks andservices. ComReg is of theview that consideration ofthese issues is timely andnecessary and has requestedthat eircom undertake ananalysis and an impactassessment, including plansand timelines, of thewithdrawal of legacy services.When ComReg has a betterunderstanding of eircom’s

plans and is in receipt of itsanalysis, ComReg plans tocommence a wideengagement with all relevantstakeholders, including apotential public consultation,in order to develop anapproval process thatconsiders all of the issuesand the implications of anyrequest for approval. Thisengagement will includeconsideration of, inter alia,the criteria which should beapplied in assessing anyapplication from eircom forconsent to withdrawwholesale access.

n Eircom’s verticallyintegrated structure: asnoted above, ComReg hasconcerns that, given eircom’svertically integrated structureand its smP position incertain related markets that ithas both the ability and theincentive to engage inbehaviours that discriminateagainst competing operators.In our previous strategystatement published in 2014,we noted that eircom hadembarked on a programme itcalled “Wholesale Reform”with the objective ofinstitutionalising compliancewith its regulatoryobligations. We signalled thatthe effectiveness of thisprogramme could make adifference to the detail ofremedies that we considerednecessary to impose and towhether structural remedies


56 see also Chapter 7 for a discussion of ComReg’s strategy in relation to investment by eircom, the designated UsP, in thelegacy copper network.

57 see ComReg Document No. 16/01.

58 The european Union (Reduction of Cost of Deploying High-speed Public Communications Networks) Regulations 2016(s.I. 319 of 2016)

59 ComReg, 2012, Resolution procedures developed taking account of section 57 of the Communications Regulation act2002, 12/108, October.



use a radio frequency band and isan important activity ininternational harmonisationprocess, as discussed later inChapter 7. ComReg’s radiofrequency plan for Ireland62 setsout Ireland’s radio spectrumallocations and this plan isupdated regularly in line withdevelopments at an internationallevel.

5.48 spectrum assignment refers tothose spectrum managementactivities which involve the issueof, and authorising the use of,rights of use for radio frequencies.In Ireland, the possession and/oruse of radio equipment requiresauthorisation from ComReg andthis authorisation may take theform of either a licence or alicence exemption under theWireless Telegraphy acts, 1926-2009. The majority of ComReg’sspectrum management workrelates to the licensing ofspectrum. For example, (a)determining the precise nature ofspectrum rights (e.g. technicalconditions, geographic dimension,licence duration, licence conditionsetc.), (b) designing andimplementing awards of spectrumrights, and (c) granting rights ofuse/licences on foot of same.

5.49 In relation to the assignment ofspectrum rights for electroniccommunications services, ComRegdetermines the appropriatespectrum assignment approach ona case by case basis in light ofspecific facts and circumstancesthat arise. Notwithstanding this,ComReg63:

n Notes the clear benefits thatauctions offer for the awardof spectrum rights of use inbands harmonised forfixed/mobile wirelessbroadband services, andobserves that both Irish andinternational spectrummanagement experiencesupport the continuedappropriate use of auctionsgenerally, and

n Considers that incompetitions for spectrumrights (and, in particular,auctions), spectrumcompetition caps are animportant tool by which tosafeguard and promotecompetition – both forspectrum rights anddownstream competition.

the event of disputes arisingbetween network operatorsin relation to the BroadbandCost Reduction Regulations.ComReg has published itsprocess to handle disputesarising in relation to theBroadband Cost ReductionRegulations60, and

n The functions of a “singleInformation Point” (sIP) tofacilitate access toinformation regardingstatutory permits for civilworks required to developelements of a high-speedpublic communicationsnetworks. The sIP ispublished on the ComRegwebsite.61

access to Essential inputs:spectrum and numberingresources

spectrum5.45 Radio spectrum, as a medium

over which data can betransmitted, is an essentialinput in the supply of electroniccommunications services whichare radio based. mostcommunications networks, evenfixed networks contain wireless

segments. The availability ofspectrum is therefore necessaryfor the entry and expansion ofmany operators in electroniccommunications markets. Thedemand for radio spectrumcontinues to grow, driven bysociety’s ever-increasingrequirements in terms of access todata intensive services while onthe move (see explanatory Box 8for more discussion). In thiscontext it is ComReg’s goal thatspectrum management forelectronic communicationsmarkets takes account of, interalia, the promotion ofcompetition.

5.46 Radio spectrum is a scarceresource having many differentpotential uses and end-users.Broadly speaking, spectrummanagement is the process ofregulating the use of radiofrequencies to promote itsefficient use in the interests ofsociety. Radio spectrummanagement involves aconsideration of a broad range offactors (e.g. administrative,regulatory, social, economic andtechnical). In particular, spectrummanagement involves spectrumallocation and assignment, aswell as the monitoring, complianceand enforcement of licenceconditions and equipmentstandards.

5.47 spectrum allocation refers to thedesignation of given frequencybands for use by one or moretypes of radio communicationsservices, where appropriate, underspecified conditions. This identifiesthe services that could potentially


60 ComReg, 2016, Broadband Cost Reduction Regulations - Dispute Process, 16/77r, september.61 see https://www.comreg.ie/industry/electronic-communications/single-information-point-bcrr/single-information-point-

sip/

spectrum management for electroniccommunications markets takes account,inter alia, of the promotion ofcompetition.

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62 ComReg Document 13/118R.63 see Chapter 7 of ComReg’s spectrum management strategy for 2016 to 2018 (Document 16/50) for ComReg’s current

thinking on a number of topical spectrum management issues, including the use of auctions for awarding spectrumrights of use for eCs and competition caps on spectrum.



5.50 Over the coming period, related tothis goal ComReg intends toundertake the following:

n spectrum leases: ComRegintends to establish aframework for spectrumleases. spectrum transfersand/or leases is a spectrummanagement tool that, alongwith other measures, canincrease the efficient use ofspectrum rights. spectrumtransfers in the Radiospectrum Policy Programme(RsPP)65 bands in Ireland isprovided for the WirelessTelegraphy (Transfer ofspectrum Rights of Use)Regulations 2014 (“theTransfer Regulations”) andRegulation 19 of theFrameworkRegulations.66

n spectrum award design:ComReg will ensure thataward process(es) to assignspectrum rights of use areappropriately designed inlight of prevailingcircumstances includingrelevant legislation and policygoals.

n release of harmonisedspectrum that can be usedfor mobile, nomadic, andfixed wireless broadbandservices: ComReg intends tocomplete the award processfor the 3.6 gHz band by Q32017, and to significantlyprogress the award

process(es) for the 700 mHz,1.4 gHz, 2.3 gHz and/or 2.6gHz bands over the comingtwoyears.

n release of other spectrum:ComReg will continue tomake available and assignradio spectrum in a timelymanner to support thediverse range of actual andpotential spectrum users.

n Expiry of spectrum rights:ComReg will continue toconsider the expiry ofexisting radio spectrumrights significantly in advanceof licence expiry, and set outComReg’s spectrumassignment proposals inrelation to same.

numbers5.51 access to numbers is essential to

the functioning of electroniccommunications markets. ComRegregulates the telecommunicationssector in Ireland in accordancewith eU and domestic legislationand is tasked with themanagement of theNational Numbering scheme,including attaching conditions for


64 ComReg, 2016, Radio spectrum management strategy statement 2016-2018, Document 16/50, June.

65 Decision 243/2012/eU of the european Parliament and of the Council of 14 march 2012 establishing a multi-annualradio spectrum policy programme (RsPP). This Decision is intended to create a roadmap contributing to the internalmarket for wireless technologies and services, particularly in line with the europe 2020 initiative and the Digital agendaforeurope.

66 ComReg notes that the transfer of spectrum rights in the harmonised bands, in Ireland and elsewhere in europe, hasprimarily occurred in the context of broader corporate control transactions (i.e. mergers or acquisitions such asbetween mNOs). The Transfer Regulations do not, however, apply to spectrum transfers forming part of a merger oracquisition which is required to be notified to the Competition and Consumer Protection Commission or to theeuropean Commission.

Number management facilitatescompetition.

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since 2012, data usage on the mobile networks has increased significantly. While mobile voiceservices have increased by over 10% in the period Q1 2012 to Q1 2016, mobile data usage hasincreased by over 500%. Further, as of Q1 2016, the average traffic per smartphone user reached2.7 gB of data per month, while the average traffic per dedicated mobile broadband subscriber was7.4 gB of data per month. This represents a 69% year-on-year increase for smartphone usage anda 7% year-on-year increase for mobile broadband usage. In the same period in 2012, the averagetraffic per smartphone user was 300 mBs of data per month and 2.8 gBs per month for mobilebroadband per month.

These increases are likely due to a number of factors including:

n increased 3g and 4g network capability and coverage

n increased smartphone penetration - currently around 84% of all mobile

n subscriptions (excluding dedicated mobile broadband and m2m)

n rising mobile data caps, and "all you can eat" plans, and

n the increasing use of video and over-the-top (OTT) applications

User demand for mobile data is expected to further increase due to increased penetration andcapability of devices (particularly 4g smartphones). a 2015 report for ComReg by Frontiereconomics conservatively estimated that, between 2015 and 2035, user demand for mobile datawill increase 33 times.

Future mobile data traffic is expected to grow significantly due to mainly, though not only, thedevelopments in the mobile smartphones, which is linked to the increasing consumption of mobileinternet and smart apps by end-users. With increased penetration and use of smartphones, itappears that end-users increasingly expect to access mobile internet/video services at any timeand place similar to the service enjoyed with voice calls in terms of nationwide access. In addition itappears that smartphone end-users increasingly expect to access mobile internet/video serviceswith service levels similar to those enjoyed in the home / Wi-Fi hotspot in terms of data speeds andreliability.

To meet these expectations, the delivered speeds and capacity of dedicated mobile networks willneed to continue to evolve over time, and the deployment of technology advances, such as carrieraggregation, will increasingly be required.

(source: Radio spectrum management strategy statement 2016-201864)

ExPlanatory Box 8: EvEr-incrEasing dEmand For moBilE data sErvicEs


demand-side Factors: switching

5.55 effective competition in electroniccommunications marketsdepends not just on supply-sideconsiderations relating to theease of entry to markets or theavailability of essential inputs.effective competition alsodepends on demand- sidefactors, and principally theability and willingness ofcustomers to switch suppliers inresponse to a better deal in themarketplace. If end-users are forsome reason immobile, newoperators will not be able to builda customer base and existingoperators will have no incentiveto compete by offering betterfinancial terms, improved qualityor innovative products.

5.56 Consumer immobility can bethought of in terms of barriers toexercising choice. such barriersmay arise for a wide variety ofreasons, forexample:

n Due to the presence ofrestrictive contracts

n Because services arepurchased as part of bundles

n Because the informationnecessary for decision-making is costly to acquire (orsimply unavailable), or

n Because information isdifficult to understand orassimilate.

5.57 These considerations are allsignificant in the context ofelectronic communicationsmarkets. In the context ofpromoting competition, it istherefore one of ComReg’sstrategic goals to ensure thatthere are low barriers toconsumers exercising theirchoice. ComReg’s second highlevel strategic intention to protectand inform end-users, and theassociated strategic goals andspecific programmes of work arediscussed in detail in the nextchapter.

rights of use of numbers.ComReg’s role is to balance theneed to conserve this finitenational resource while ensuringthat there is always an adequatesupply of numbers to support thedemands of existing and newcustomers and service providers.In this context, it is ComReg’s goalthat number managementfacilitates competition. anynew conditions of use thatsupport competition andinnovation nevertheless need toensure that consumers remainprotected against numbermisuse.

5.52 Numbers are likely to remain themost common universalidentifiers between now and2021 and well beyond. Numbersare trusted because they arecoordinated at national level (byNRas) and international level (bythe ITU).

5.53 Two trends are likely to berelevant to effective regulationover the period to 2021. First,with respect to the IoT, manymachines will need numbers. Noideal global solution currentlyexists for international mobile tomobile (m2m) communicationsservices. second, emergingbusiness models will need to beconsidered. OTT services andapps that use numbers willundoubtedly proliferate over theperiod to 2021. Traditional mobileoperator networks and businessmodels will evolve too. servicessuch as ‘Wi-Fi calling’, native orotherwise, will likely becomecommonplace. Handset providersmay leverage reprogrammablesIms to move further up themobile value chain. Thenumbering and interoperability

framework needs to adapt tocater for these new models. Theremay also be implications for thewholesale interconnectionframework and a need to cater formore complex end-user switchingscenarios.

5.54 Related to this goal, ComReg willbe undertaking thefollowing:

n numbering Plan: Provide anongoing numbering planmanagement function tomake sufficient numbersavailable on an equivalentand transparent basis to allservice providers that needthem.

n numbering conditions:Update the NumberingConditions of Use andapplications Process in 2017and at least every 2 yearsthereafter, to support newmarket and technologydevelopments (e.g. new FmCproducts, m2m, OTT, esIm),while also ensuringconsumers remain protected.

n numbering for mobile, ottand m2m: Conduct a fullreview of numbering formobile, OTT and m2mservices in 2017, with the aimto support innovative newservices (particularlyinternational m2m services)but without requiring anynumber changes for existingmobileend-users.



There are low barriers to consumersexercising their choice.

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6.4 This Chapter sets out ComReg’sstrategic goals associated withprotecting and informingconsumers with the high levelobjective of ensuring thatconsumers can choose and usecommunications services withconfidence. We can think of theconsumer navigation of themarket, or “journey”, andComReg’s role therein, in threebroad phases, shown in Figure 7below:

n Before the purchasingdecision is made when theconsumer is attempting todevelop an understandingand assimilates information

n This leads the consumer topurchase, which may involveswitching current suppliers,and enter a contract forservices for which they areultimately billed, and

n Finally, in the event that theproduct or service does notmeet expectations, thecustomer may have acomplaints experience.introduction

6.1 effective competition shouldmaximise benefits for consumers.However, markets, even well-functioning ones, do not alwaysdeliver outcomes which areoptimal from society’s perspective.market power is only one potentialdriver of market failure and poorconsumer outcomes. additionally,interventions to address marketpower in wholesale supplymarkets for example, may notaddress potential issues for allconsumer segments in retailmarkets.

6.2 There are issues for consumers inelectronic communicationsmarkets which do not necessarilyarise from competitive conditions.For example, lack of access tobasic services, consumer inertiadue to switching difficulties, lack oftransparent or comparableinformation, including, in respectof quality of service, can preventconsumers from making and

acting on fully informed choices.Issues may also arise in respect ofservice providers not upholdingconsumers’ rights or not providingadequate complaints and redressmechanisms when problems arise.enhanced consumer rights, amongother things, aim to ensure easeand speed of switching serviceprovider. Furthermore, while allconsumers may at times bevulnerable to detriment, someconsumers may be particularlyvulnerable.

6.3 The ability of consumers toexercise choice in the marketplaceis essential to the functioning of acompetitive market. evolvingconsumer protection legislationaims to redress the informationand power imbalance forconsumers when undertakingpurchasing decisions. empoweredconsumers, as the engine ofcompetitive markets, can play avital role in improving economicperformance and drivinginnovation.


PROTeCTINg aND INFORmINg CONsUmeRsPROTeCTINg aND INFORmINg CONsUmeRs

strategic intent 02: consumErs can choosE and usEcommunications sErvicEs with conFidEncE


n essential and basic services are available for all as technology changesn Vulnerable users are protectedn Consumers are empowered through clear and adequate information

and effective redressn Consumers are treated fairly by eCs and Premium Rate services (PRs)

providersn Consumers get the service they contract and pay for

understanding

contact

information

switching

Billing complaints

Figure 7: the consumer Journey



the consumer Journey

Preparing the consumer for the decision6.9 Telecommunications products and

services can be complex products.This complexity is increasing as, forexample, services are bundled innew and varied ways. In thiscontext, decision-making can bedifficult for consumers meaningthat markets may not functioneffectively. a compounding factorwhich ComReg recognises is that

consumers do not always make“economically rational” decisions(see explanatory Box 9) andchoose the best quality product forthe lowest price. In this context, itis our goal that comregunderstands evolving consumerneeds, preferences, behavioursand perceptions. We believe thisis essential if we are to know whatinfluences consumer decision-making, and therefore makeeffective regulatory interventions.In this context, ComReg willcontinue to conduct regularconsumer research. This workshould complement the proposedmarket assessments discussed inthe previous chapter (see thediscussion in relation to goal 1) aswell as the independent researchprogrammes at the esRI thatComReg is involved in. However,ComReg also has more targeted

common consumer issues6.5 On the whole, electronic

communications markets continue todeliver choice and value forconsumers. Take-up of servicescontinue to grow, including growth ofIP based /OTT services which drivesdemand for higher speed fixed andmobile services. and, consumers areincreasingly purchasing bundles.significant numbers of consumerscontinue however to have issues withproviders.

6.6 Consumers may contact ComReg’sconsumer line with issues relating toboth eCs and PRs Providers.67 Inrelation to the breakdown of eCsissues raised: billing, contractual andservice issues have been and remainthe main issues raised by consumers(see Figure 8). However, othercategories, in particularin relation toPRs service issues and switching areclearly also issues.

6.7 There are some sub-trends which arenotable. The number of issues raisedby consumers relating to billing,

encompassing issues such asovercharging, and disputed charges,have been increasing. In contrast,contractual issues, which encompassissues relating to terms andconditions, and contractualcancellation penalties, have beendecreasing. PRs remains a significantissue and increasing concern interms of the number of issues raisedbyconsumers.

6.8 Not all issues raised by consumersgive rise to a formal complaint. If aconsumer has not raised their issuewith a service provider ComRegadvises the consumer to lodge aformal complaint with the serviceprovider and we logthis as a query(and the contact is logged as such).However, if the complaint is notresolved within 10 working days theconsumer may revert to ComReg andwe can then raise the complaint withthe service provider (and the statusof the contact is changed from queryto complaint on our internal system).Figure 9, below, shows the relativevolumes of queries versuscomplaints.


Billing PremiumRate

service

service Contractual switching Other Installation Customerservice

2011/12 2012/13 2013/14 2014/15 2015/16

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

Figure 8: Breakdown of issues logged (Queries/complaints), 2011 - 201668

67 ComReg reports consumer line statistics on a quarterly basis. available at: www.comreg.ie/publications/68 source: ComReg. 69 source: ComReg.

2011/12 2012/13 2013/14 2014/15 2015/16

30,000

25,000

20,000

15,000

10,000

5,000

0

Figure 9: Queries/complaints total Ecs and Prs combined, 2011 - 201669

Total Queries Total Complaints

ComReg understands evolvingconsumer needs, preferences,behaviours and perceptions.

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and issue-specific ways of engagingwith and understanding consumerneeds, preferences, behavioursandperceptions.

6.10 The principal ways that we gaininsights into consumers’preferences and experiences inrespect of electroniccommunications which areevolving is through:

n research: ComReg conductsregular market surveys tounderstand the changingpreferences, behaviours andperceptions of consumers.We also conduct marketsurveys in the context ofparticular regulatoryactivities. Over the comingperiod ComReg intends todevelop this work in thecontext of an overall datastrategy (see Chapter 9).

n advisory panels: ComReghost panels periodically togain insights into consumerissues including issues forpeople withdisabilities.

n Queries and complaintsdata: ComReg analyses thisdata received fromconsumers to get an insightinto consumer trends andissuesarising.

6.11 Imperfect information is aparticularly pertinent issue withchallenges, including, rapidlyevolving technologies, complexpricing models including bundlesand detailed legal contracts.Without adequate guidance orsupport, consumers could feelunable to make an informedchoice, and may postpone makinga decision, possibly indefinitely.Therefore, key to enabling theconsumer to make informedchoices is that all consumers,including vulnerable users, haveaccess to clear and adequateinformation that facilitatesinformed choice. Often we can seeproducts or services presented inways that may not accuratelyrepresent or can mislead theconsumer. We have the ability toset rules around the ways certainproducts and services arepresented to the consumer. Havingsufficient information in a form thatis useful and comparable andaccurately represents the productor service should help enable theconsumer to make an informeddecision.


all consumers, including vulnerableusers, have access to clear and adequateinformation that facilitates informedchoice.

gOaL 09

70 Lunn, Pete et al, 2016, PRICe Lab: an Investigation of Consumers’ Capabilities with Complex Products, esRI.

Traditionally, consumers have been viewed as “rational economic” actors, who have full informationabout a particular transaction, interpret this information accurately and make the decision whichwill maximise their personal welfare. However, it has been increasingly recognised that consumers’decision making processes are more complex than this. an increasing amount of work is beingundertaken into the biases inherent in consumers’ behaviour that can yield suboptimal outcomes.

Research by the esRI suggests that there are features specific to the telecommunication marketthat pose particular challenges to consumers in terms of decision making;

n eCs products or services are often complex by nature, a problem compounded by the fact thateCs services are often purchased with complementary technologies (e.g., handsets) andservices (e.g. content). This decision making process is further complicated by the consumers’uncertainty about future levels of usage.

n The value of the service is unrelated in many ways to the quality of the product or the provider,but is rather determined by the uses to which the user puts the technology.

n The rate of technological change means purchase decisions are made without the consumerhaving tested the product.

n The availability of internet access on a range of devices means that consumers make multipleand varied decision on a daily basis about what content to consume and when. They have topredict this decision making at the point of purchase.

These market characteristics make it difficult for consumers to make rational decisions increasingthe possibility of suboptimal results.

The possibility that persistent consumer biases may be yielding suboptimal outcomes maynecessitate the development of appropriate remedies and may also undermine the effectiveness ofcurrent interventions. In particular, it has generally been implicitly believed that consumers canassimilate information accurately and that the provision of additional data facilitates more accuratedecision making.

However, this assumption is undermined by the esRI Price Lab research which found thatconsumers are unable to make good purchasing decisions when descriptions of products forcethem to think about too many things at once.70 Once consumers have to weigh up more than twoor three factors at the same time, they struggle to identify good deals. This is of particular interestin telecommunications as the increasingly complex nature of bundles will make it even moredifficult for consumers to compare options.

The findings of the Price Lab study suggest that consumers can benefit if product ranges anddescriptions are kept simple. The report also notes that independent price comparison sites whichintegrate information can help consumers struggling with the volume or complexity of productinformation; we currently have a price comparison tool on our website:www.comreg.ie/price-comparison/

Behavioural economics is an ongoing area of research which is providing insights into the natureand behaviour of consumers and will continue to inform us.

ExPlanatory Box 9: consumEr BEhaviour



6.12 Related to this goal over thecoming period, some of the workwe are doing in relation toproviding improved access toinformation, for the purposes ofenabling consumers to makeinformed choices when productsand offers are becoming morecomplicated, is as follows:

n website: Our website is a keytool for engaging withconsumers (as well as otherstakeholders). In 2016, ourwebsite was entirely updatedand consolidated and is nowhighly accessible on alldevices, including screenreaders and other resourcesfor those with accessibilityrequirements. Our websitehosts a price comparison toolto facilitate decision-makingby consumer and other end-users(https://www.comreg.ie/price-comparison/).

n Price comparison: During2017, ComReg intends tointroduce a new pricecomparison tool thatencompasses thefollowing:

- The triple and quad playbundles in the market

- Transparency with respectto the cost of terminalequipment, in particular,upfront costs whenentering into a contractfor a communicationsservice, and

- more accurate estimationof usage for example byoffering the ability to

download an app on yoursmartphone and/orupload abill.

n Publishing of consumerline statistics: In Q3 2015,ComReg commencedpublishing quarterly statisticsin respect of issues raised byconsumers who contactedthe consumer line. Thesepublications assistconsumers in understatingthe kinds of issues beingexperienced. ComReg plansto provide further granularityin these reports in thefuture.

n code of Practice forcomplaint handling:ComReg is currentlyconsulting on settingminimum requirements forservice providers’ codes ofpractice for complainthandling. ComReg is planningto subsequently initiate anawareness campaign so thatconsumers are betterinformed in relation to codesof practice and the processinvolved in seekingredress.

n net neutrality: New NetNeutrality legislation71 hastransparency requirements inrespect of contracts(including in relation tospeeds) and we will beensuring that theserequirements are met byservice providers (seeexplanatory Box 10 for adiscussion of Net Neutralityand the related concept of“zero-rating”).


71 Regulation (eU) 2015/2120 of the european Parliament and of the Council of 25 November 2015 laying down measuresconcerning open internet access and amending Directive 2002/22/eC on universal service and users’ rights relating toelectronic communications networks and services and Regulation (eU) No 531/2012 on roaming on public mobilecommunications networks within the Union (“the Net Neutrality Regulations”).

Internet Highway Route 00110001

FASTLANE

FASTLANE

SLOWLANE

72 Ibid.

net neutrality

Net neutrality is the concept that all classes of traffic should be treated equally. That is, an IsP shouldnot block or restrict access to particular type(s) or class(es) of traffic based on where they come from.For example, an IsP should not be able to block or restrict Netflix traffic in favour of traffic fromamazon Prime. Neither should an IsP be able to prevent a user from visiting a particular website orusing a particular service.

Net neutrality is seen as a founding principle of the internet. Net neutrality allows new applicationsand services to be developed and delivered over the internet while competing on their merits as aservice without restriction.

Net Neutrality Regulations72 have been adopted which prohibit IsPs from blocking or slowing down ofinternet traffic except where necessary.

Zero-rating has come into focus with these regulations as zero-rating can be viewed as a form ofdiscrimination based on who is sending or receiving the traffic. The regulations allow for zero-rating incertain circumstances.

Zero–rating

‘Zero-rating’ is when an internet service provider (IsP) applies a price of zero to the data trafficassociated with a particular application or class of applications (and the data does not count towardsany data cap in place on the internet access service). For example, an IsP may not charge a user forthe data used to access a specific music streaming application or all music streaming applications.

Zero-rating is more prevalent for mobile offerings and can offer the consumer benefits in allowingthem to consume certain types of data (video, music, social media) without eating into their dataallowance or incurring excess data charges.

While zero-rating may offer some benefits for consumers there have been concerns around raised inrelation to the practice on competition and net neutrality grounds. From a competition point of view,the concern is that the practice of zero-rating may enable network operators to pick winners by tiltingthe playing field in favour of particular OTT service providers. a zero-rated OTT service provider wouldhave an advantage over rivals whose end- users would have to pay data charges to use.

ExPlanatory Box 10: nEt nEutrality and ZEro-rating



6.16 In addition to these basic rights,consumers also enjoy protectionsin relation to:

n Purchasing and providingconsent

n switching

n The contract

n Using the service

n The bill, and

n Complaint redress.

6.17 The switching process forconsumers can be difficult, inparticular, during migration to new

advanced networks, as theconsumer has to deal with boththe provider they are leaving andthe provider they are moving to.When switching, terms in aconsumer’s existing contract canmean that, if within the minimumterm or if there has not been acontract change, a consumer mayneed to give a notice period.Further, time to switch betweenservices can lead to a person beingwithout any service for a period oftime. This process can becomeeven more difficult when we lookat bundled services which includenon-eCs services.

6.13 as discussed previously, thereappears to be a trend of growingdissatisfaction among end-userswith the quality of coverage incertain geographic areas. Indeed,mobile coverage is an issue ofnational importance ashighlighted by its inclusion as apriority in the programme forgovernment, and the formationof a mobile Phone and BroadbandTaskforce. For its part, ComReghas initiated a work stream tobetter understand the factorsaffecting the mobile consumerexperience. Over the comingperiod we intend to:

n handset testing: ComRegintends to provideinformation on handsetsensitivity due to antennaperformance and networkcoverage, allowingconsumers to make informedchoices about the level ofsignal they can expect fromdifferent handsets.

n consumer Perceptions:Undertake market researchaimed at developing a betterunderstanding of consumers’experience of mobilecoverage.

n coverage information:ComReg intends to generateand publish online acomposite national coveragemap, which will helpconsumers choose thenetwork provider that bestmeets their needs for wherethey live and work. The aim isto publish the map in 2018.

accessing and usingproducts and services

6.14 empowered with clear andadequate information, the nextphase of the customer journey,involves the decision to purchase,access and use products andservices. In this context, it isComReg’s goal that consumerrights throughout their journeyare upheld by their serviceproviders.

6.15 The basic consumer protectionmeasures are the universalservice, access to emergencycalling services and measures toensure equivalence in access andchoice for disabled end-users.Universal service is the provisionof a defined minimum set ofservices to all end-users at anappropriate quality and anaffordable price. The universalservice which assures reasonableaccess to an electroniccommunications network andcurrently primarily a voice serviceat a fixed location73 is a safety netensuring that all Irish citizens haveaccess to basic electroniccommunications services (seeexplanatory Box 11 for morediscussion).


Consumer rights throughout theirjourney are upheld by their serviceproviders.

gOaL 10

73 There are also obligations in place in respect of payphones and printed directories.

The purpose of Universal service is to ensure that basic fixed line telephone services are available at anaffordable price. The scope of universal service is defined by the 2002 eU Directive which was implementedin Ireland by the european Communities (electronic Communications Networks and services) (Universalservice and User’s Rights) Regulations 2003 – s.I. No.308 of 2003 (as amended).

universal service obligations (uso)

eircom is the current designated ‘Universal service Provider’ (UsP) and has a number of obligations regardingthe provision of certain services.

n Provision of a telephone line: eircom must meet every ‘reasonable’ request for a phone line. The serviceprovided must be capable of local, national, and international phone calls; fax communications; and datacommunications at rates that are sufficient to permit functional internet access eircom must deliveraccess at a fixed location at a uniform price and at a specified quality.

n Provision of public payphones: eircom must provide payphones throughout the state to meet thereasonable needs of end-users in terms of geographical coverage, accessibility and the quality ofservices. Payphones that are covered under the UsO are those available on the street and in other publicareas available to the public at all times.

n Provision of directory services: eircom must provide consumers with a printed phone book, free ofcharge. This may be provided by eircom on an opt-in basis. every user has the right, through theirservice provider, to an entry in the telephone directory.

n Retail price cap: The existing price cap was imposed on eircom from October 2007 and provides asafeguard on PsTN and IsDN BR line rental and connections fees. The price cap ensures that eircomcannot increase the prices by more than the rate of inflation as published by the Central statistics Office.

In addition to the Universal service, consumers are also entitled to access emergency call answering services.all providers of publicly availably telecommunication services must provide free access to emergencyservices.

ExPlanatory Box 11: EssEntial and Basic sErvicEs



supporting consumerinformation campaign into2018 and other tarifftransparency measures.

n net-neutrality monitoring:In light of the newrequirements on serviceproviders in respect of netneutrality, ComReg isimplementing a monitoringand compliance programmein respect of elementsincluding traffic managementpractices and consumercontracts, in accordance withour powers.

n roaming: ComReg willcontinue to monitorcompliance of mobile serviceproviders with theimplementation of theamended RoamingRegulations.74

consumer complaints andredress

6.23 as just discussed, the consumerjourney has a number of steps andthroughout this process there ispotential for consumersandproviders to disagree on:

n Whether the customeragreed to purchase aservice75

n What was agreed, or

n The quality of the product orservices that has beenprovided,and/or

n How much they are beingcharged.

6.24 For consumers to have confidencein the process they need to have aresolution process that addressesthe power differential betweenthat of a large operator and themas an individual. In this context it isComReg’s goal that consumershave effective redressmechanisms. In all instances theconsumer must raise the matterwith their service Provider inadvance of contacting ComReg. alleCs Providers are obliged in law tohave a Code of Practice forcomplaints handling in order tocommunicate how they deal withdisputes and what steps aconsumer must follow. If theconsumer has not had theircomplaint resolved within 10 daysthey can then contact ComReg.ComReg offers a service toconsumers who can contact theconsumer line by phone, emailandtext.

6.25 In this context, ComReg over thecoming period will be pursing thefollowing:

n complaints: ComReg isobliged to ensure thatcomplaints and redressprocedures for end-users ofelectronic CommunicationsProviders, as outlined inRegulation 27 of the Users’Rights Regulations are

6.18 Once a consumer has initiated theswitching process, the contractneeds to set out clearly the serviceofferings associated with the priceplan. Contracts will often contain alevel of detail on the terms andconditions of the service which thecustomer may claim to be unawareof when they decided to purchasethe product or service. There is arequirement in law that sets outthe minimum information thatservice Providers mustcommunicate to consumers in acontract.

6.19 Consumers need to be treatedfairly in accordance with theirconsumer rights also during anymigration period. Importantly, end-users must be notified of anychanges to the contractual termsand conditions that would apply toany new or replacement services.Consumers must give informedconsent to any new contracts, asrelevant.

6.20 While it is important that contractsfairly represent the product orservice, it is just as important thatconsumers have appropriate rightswhen the product or service doesnot meet expectations. Forexample, a mobile service may notmeet a consumer’s expectations ifthe consumer did not haveaccurate information aboutcoverage at the locations wherethey live, work and travel. In thiscontext, ComReg recognises that itis much easier for consumers toenter a contract than it is to exitwhen expectations are not beingmet. ComReg welcomes initiativessuch as one mobile operator’soffer of a no-quibble option tocancel contracts and returnhandsets within 30 days in order togive consumers a chance to

experience the service before theycommit. On the other hand,contract provisions such as longnotice periods as mentioned abovecan have the effect of preventingconsumers exercising their choicewhich can dampen the competitivedynamic in the industry.

6.21 another component of theconsumer experience concernsthe bill. The bill that a consumerreceives should accuratelyrepresent the products andservices that the consumer agreedto contract for and purchase.Often, a consumer can be billedfor services that they are notreceiving, or the bill includes othercharges that they were unaware ofat the time of entering the contractor even incorrect charges, or theconsumer faces usage charges, forexample, for calls to certain non-geographic numbers, where thereis poor tariff transparency.

6.22 In relation to his goal, ComReg willundertake the following:

n monitoring compliance:ComReg will continue tomonitor compliance ofservice providers withobligations including inrelation to access toemergency services,universal service, numberportability, switching,contracts, billing, netneutrality androaming.

n non-geographicnumbering: ComReg willcomplete its review of non-geographic numbers in 2017,to ensure reasonable pricesfor both consumers andbusinesses and also toensure that pricing is clear tocallers. This may require a


Consumers have effective redressmechanisms.

gOaL 11

74 Regulation (eU) 2015/2120 of the european Parliament and of the Council of 25 November 2015 laying down measuresconcerning open internet access and amending Directive 2002/22/eC on universal service and users’ rights relating toelectronic communications networks and services and Regulation (eU) No 531/2012 on roaming on public mobilecommunications networks within the Union.

75 This is a particular issue in respect of PRs.



implemented. ComReg isaware that some codes ofpractice fall short ofComReg’s view of appropriateminimum standards. ComRegis currently seeking toimprove the minimumstandards in codes ofpractice for complaintshandling and bring aboutchange which willstandardise commitments,for example response times,across all electronicCommunications Providers,as well as encouraging amore systematic approach tothe requirements of codes ofpractice in general.

n alternative disputeresolution (adr): Weconsider ComReg best placedto deal with eCs and PRsdisputes. In 2015 there wasnew law introduced inrespect of alternative disputeresolution for consumerdisputes (s.I. No 343 of2015). In 2017, we willconsult ComReg’s complainthandling process and this willencompass relevant aDRaspects.

communication andEngagement

6.26 We engage with end-users in avariety of ways. These includedirect contact with individual end-users by phone and email, theprovision of information throughour website and on social media,and indirect engagement throughthe media. We also engagethrough contacts withrepresentative bodies and wegather information about end-userneeds through market researchsurveys. We keep the mix ofengagement channels underreview to ensure continuingeffectiveness.

6.27 In order to promote the interestsof end-users, we can look both toour own regulatory powers and tothe possibility of using ourinfluence with other regulatorybodies and with industry. We aimto be an effective advocate forconsumers. For instance, in thepast, we have worked with theadvertising standards authority ofIreland to assist them to set rulesrelating to claims made bytelecom service providers. Wehave also worked with theindustry to influence them tovoluntarily provide certainservices, including services forpeople with disabilities.


ComReg is an effective advocate forconsumers.

gOaL 12

We aIm TO Be aN eFFeCTIVe aDVOCaTe FOR CONsUmeRs.



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as possible. This can involvemandating the supply ofwholesale inputs under thesmP regime, setting pricesthat allow an adequatereturn on investment,effectively managing theradio spectrum and goodadministration of thenational numbering resource.

n incentivised investment:some investment occurs as adirect result of marketintervention by ComReg. Forexample, all publiclyaccessible telephone serviceproviders are required toinvest to ensureuninterrupted access to theemergency call answeringservice.

n state intervention: someinvestment that occurs in thecontext of a directintervention by the state in

the marketplace, e.g., theNational Broadband Plan.While such investment may inpractice involve a privatedimension, it would not occurwithout direct financialinvolvement by a public body.even though ComReg is notdirectly involved in suchsituations, it still has a role toplay in advising andsupporting the state so thatinterventions support theeffective functioning of themarket.

7.5 Finally there is investment thatoccurs, not directly in electroniccommunications markets, but inrelated markets. The manner inwhich ComReg undertakes its rolein respect to electroniccommunications markets mayaffect incentives to invest incertain related markets and viceversa.

7.1 as previously discussed, central toComReg’s view of regulation is theprinciple that well-functioningmarkets deliver optimaloutcomes in terms of prices,quality, choice and innovation.This principle extends to the levelof investment made by operators.That is, well-functioning marketsdrive commercial incentiveswhich can be relied on to ensurethat private operators capitaliseon technological advances andmake the investments necessaryto bring innovative products andservices to market, and generallyimprove service quality.

7.2 However, ComReg recognisesthat unregulated electroniccommunications markets maynot function well enough toprovide the right incentives forinvestment. In addition, even thebest regulated markets may notdeliver outcomes which areoptimal or adequate. In particular,market-based incentives alonemay not lead operators inelectronic communicationsmarkets to make the investmentsnecessary to deliver services tonon-economicend-users.

7.3 This chapter sets out ComReg’sstrategic goals associated withcreating the conditions forinvestment with the high-levelstrategic intention of ensuringthat efficient investment hasenabled affordable, high-qualityand widespread access tocommunications services andapplications. ComReg recognisesthat, at a fundamental level,creating the conditions forinvestment is as much aboutregulatory certainty as it is aboutshaping operatorincentives.

7.4 In one sense, all investmentmade in electroniccommunications markets isaffected by ComReg’s presence,but the impact of our presencevaries. It is useful to distinguishthe different settings in whichinvestment occurs (see Figure 10):

n commercial investment:There is investment that ispurely commercial in nature.ComReg’s principal role inthis context is to facilitateinvestment by fosteringregulatory certainty, loweringbarriers to entry andensuring the availability ofthe necessary inputs as much


CReaTINg THe CONDITIONs FOR INVesTmeNTCReaTINg THe CONDITIONs FOR INVesTmeNT

strategic intent 03: EFFiciEnt invEstmEnt has EnaBlEdaFFordaBlE, high-Quality and widEsPrEad accEss tocommunications sErvicEs and aPPlications


n Infrastructure coverage that enables all end-users to participate in thedigital society

n Competing infrastructure providers where economically feasiblen Wholesale eCs services that meet market demandn a sector that is attractive to investors

Figure 10: areas of investment

Public investment

market investment

inve

stm

ent

ina

djac

ent

mar

kets investm

ent ina

djacent markets

Purecommercial

incentivised byregulation



the Pattern of Privatesector investment7.6 Private investment in the

electronic communications sectorincreased over the period 2009 to2015, as shown in Figure 11. Overthis seven year period, totalinvestment amounted to €3.79billion. The peak in 2012corresponds to ComReg’s multi-Band spectrum award. Duringthat year, €482 million of the totalinvestment of €804 million wasattributable to radio spectrum.

7.7 Figure 12 shows the trend from2009 to 2014 in investment as apercentage of overall industryrevenue, for Ireland and the eU27 average. In 2014, €37.1 billionwas invested in the eU’selectronic communicationsinfrastructure, including €566million invested in Ireland. Thisequates to 14.8% of total revenuein the Irish electroniccommunications sector in thatyear, which exceeds the eUaverage of 12.4% for that year. Itis noticeable that investment as a

proportion of total revenue hasexceeded the eU average since2012, likely reflecting positiveeconomic sentiment associatedwith the recovery of the Irisheconomy.76

7.8 Operators have invested in bothfixed and mobile networks. Infixed networks we have seeneircom upgrading its coppernetwork to allow for the deliveryof Nga services77, Virgin mediahas upgraded its network toDOCIs 3.0 and sIRO has begunrolling out its FTTH networkmaking use of existing esBinfrastructure. Over the period2011 to 2016, there has been amarked increase in downloadspeeds driven by the rollout ofVDsL, cable and fibretechnologies (see Figure 3,Chapter 3, for the number ofNga and Cga subscriptionsbetween 2010 and 2016). By theend of 2016, 70% of addresses inIreland had access to a highspeed broadband service(30mbps or greater).


76 source: european Commission, Digital agenda scoreboard key Indicators.77 services that provide a download speed of greater than 24 mbit/s.

Figure 11: investment in Ecs/Ecn (ireland, €million)78

2009

€900

€800

€700

€600

€500

€400

€300

€200

€100

€-

2010 2011 2012 2013 2014 2015

mill

ions

€

investment in Fixed and mobile services/networks

Figure 12: investment in Ecs/Ecn (ireland/Eu average as % of turnover)79

2009

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%2010 2011 2012 2013 2014

Ireland eU 27

78 source: ComReg Quarterly key Data Report.79 source: european Commission, Digital agenda scoreboard key Indicators.

% o

f Tur

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7.9 With respect to mobile networks,whilst mNOs do not have anobligation to provide ubiquitouscoverage or to provide services toeverypremises:

n all mNOs claim nationwideoutdoor population coveragefor the existing 2g services(i.e. voice and text)

n 3g outdoor coverage isgenerally available for morethan 90-95% of thepopulation80, and

n With respect to 4g,Vodafone81 claims over 90%population coverage in everycounty of Ireland, eircom82

claims 95% populationcoverage and Three83 isinvesting €300m in upgradingits network.

7.10 While the rollout of 4g services isstill ongoing in Ireland, it is aheadof those in other eU memberstates at 93.7% of householdscompared to 84.4% in 2016.84 Thisearly rollout was in part enabledby our 2012 multi-Band spectrumauction, which doubled theamount of spectrum available formobile services operating below 2gHz (see explanatory Box 12). Thispaved the way for operators tolaunch new and advancedservices.

Facilitating commercial investment

access to markets: the smPFramework7.11 electronic communications markets

which are effectively competitivedeliver optimal outcomes in termsof prices, quality, choice andinnovation. as discussed, thisprinciple extends to the level ofinvestment made by operators inthe sense that competitiveincentives should drive operators tomake the requisite investmentsnecessary to bring innovativeproducts and services to market,and generally improve servicequality. This motivates ComReg’sfirst strategic goal relating toinvestment which is thatcompetitive incentives facilitateefficient commercial investmentin infrastructure and services tothe widest extent possible. Thismeans that when regulating,ComReg will employ measuresaimed at driving, and safe- guarding,the competitive market process asthe best and principal means ofensuring that operators invest: thegreater the scope for drivingcompetition, the greater will be theextent of commercial investmentmade by private operators.


Competitive incentives facilitate efficientcommercial investment in infrastructureand services to the widest extent possible.

gOaL 13

80 For example, meteor claims nationwide 3g coverage with 99% population coverage network including dual carrier HsPa+for 80% population. second Quarter and six months Results announcement to 31 December 2016, 27 January 2017

81 see www.vodafone.ie/network/ (30 march 2017).82 second Quarter and six months Results announcement to 31 December 2016, 27 January 201783 http://www.three.ie/explore/about-three/ (30 march 2017)84 The eU Digital economy and society Index (DesI) for 2016, DesI Components, Indicator 1b2 4g coverage

In 2012, ComReg completed the multi-Band spectrum award (mBsa) process to release 140 mHz ofpaired spectrum in the 800 mHz, 900 mHz and 1800 mHz bands.

The mBsa successfully assigned all the long term spectrum rights of use in each of these bands to2030, with an additional 150 mHz being assigned, almost doubling the amount of paired spectrumassigned (particularly in the sub 1 gHz bands) and thereby facilitating the subsequent provision ofnew and improved services to consumers.

The mBsa auction allowed mobile operators to expand 3g coverage and rollout new 4g services.These rollout figures are reflected in the graph below which shows a strong increase in 4gsubscriptions through late 2014 to the end of 2016.

It should be noted that while older technologies such as 2g and 3g will likely get phased out over thelonger term, 4g is not a replacement technology, in the sense that 4g subscriptions includes accessto 3g and 2g, and 3g includes access to 2g.

ExPlanatory Box 12: thE 2012 multi-Band sPEctrum auction

100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%

mobile subscriptions by technology used, Q1 2015 - Q4 2016

13%

66%

21%

17%

63%

21%

21%

62%

17%

27%

57%

16%

31%

54%

15%

34%

51%

15%

39%

47%

14%

42%

45%

13%

Q1 2015 Q2 2015 Q3 2015

2g

Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016

3g 4g

(source: ComReg Quarterly key Data Report)



equipment (which lowers both thecost of deploying wirelessnetworks and the cost of wirelessdevices for consumers).Importantly, from an investmentperspective, the internationalharmonisation process is a keyfactor determining the technologyroadmaps adopted by suppliers ofradio equipment, many of whomare global in nature.

7.17 International harmonisation forradio spectrum involves manyaspects such as the harmonisationof technology standards inorganisations such as eTsI 3gPP,and the harmonisation of radiospectrum allocations and technicalconditions in organisations such asthe ITU, eC, RsPg and CePT.Harmonisation activities focus onadvancing the use of radiospectrum, e.g., via technologiessuch as 5g85, and ComReg,together with the Department ofCommunications, Climate actionand environment (DCCae), playsan active role in internationalforums to ensure that, as far aspossible, decisions relating to theinternational radio spectrumregulatory frameworkaccommodate Ireland’s specificrequirements.

7.18 at domestic level, participation inthe international harmonisationprocess assists ComReg in activelytaking into account and actingupon relevant developments in atimely manner in the exercise of its

spectrum management functionsin Ireland. at a practical level,investment in radio spectrum isincentivised via the actionsComReg takes to assign spectrum,as discussed in Chapter 4 above,and the conditions attached tospectrum rights of use. In thisregard:

n ComReg, where appropriate,favours and promotes theapplication of technology-and service-neutrality in linewith the relevantharmonisation measures,and

n ComReg is cognisant thatcollaboration, such as thesharing of networkinfrastructure and/or thesharing of spectrum betweentwo or more wirelessoperators in the provision ofwireless/mobile service canincentivise investment.86

7.19 Over the coming period, related tothis goal ComRegintends:

n 5g technology: ComReg willdevelop and promoteIreland’s position in relationto the spectrummanagement aspects of 5gtechnology and its candidatebands as it evolves.

n licence conditions: Forfuture spectrum awards, suchas that for the 700 mHz band,ComReg will consider the rolethat could be played by

7.12 as discussed in Chapter 5, ComRegmay impose obligations on smPoperators relating to cost recoveryand price controls, includingobligations for cost orientation, inrelation to specific interconnectionand/or access products. In suchsituations, the lack of effectivecompetition means that theoperator concerned may:

n Have incentives to sustainprices at an excessively highlevel,or

n Have incentives to apply aprice squeeze, to thedetriment ofend-users.

7.13 In line with the regulatoryframework, ComReg recognisesthat it is appropriate thatregulation allows for areasonable rate of return,including for both wholesaleand retail operators. Inparticular, the method of costrecovery should be appropriate tothe circumstances taking accountof the need to promote efficiencyand effective competition andmaximise consumer benefits

7.14 In the context of these two goalsrelating to marketaccess:

n access and relatedremedies in markets wheresignificant market Power(smP) is found: ComReg willalso encourage investmentsby other authorised

operators in downstreammarkets by mandating andenforcing appropriate accessto inputs controlled by thesmP operator on fair,transparent and non-discriminatory terms. Inorder to encourageinvestments by the smPoperator, including in nextgeneration networks,ComReg shall take intoaccount the investmentmade by the operator, andallow a reasonable rate ofreturn on adequate capitalemployed, taking intoaccount any risks specific to aparticular new investmentnetwork project. as discussedin Chapter 5, ComReg willrevise relevant accessobligations as appropriate.

access to Essential inputs: spectrum

7.15 It is ComReg’s goal that themanagement of spectrumfacilitates efficient investment.

7.16 With respect to the managementof radio spectrum, there areinternational and domesticconsiderations. The internationalharmonisation process for radiospectrum is a key driver ofinvestment in the sector as itfacilitates economies of scale inthe manufacture of radio


The management of spectrum andnumbers facilitates efficient investment.

gOaL 15

85 There is currently extensive work under way in the International Telecommunications Union (the ITU), the Conference ofeuropean Post and Telecommunications administrations (CePT), the european Commission including the Radiospectrum Policy group and the Radio spectrum Committee to (i) define the standards for 5g and (ii) ensure aharmonisation framework is in place to facilitate the rollout of 5g services in 2020.

86 ComReg is also aware that the benefits and drawbacks of any particular collaboration will depend on the specifics andcontext of the arrangement. While, ComReg does not hold a firm view on spectrum rights sharing (or pooling) or networksharing, ComReg would look more favourably on agreements that would not unduly restrict competition and woulddeliver demonstrable benefits that are shared with end-users.

Regulation allows for a reasonable rateof return, including for both wholesaleand retail operators.

gOaL 14



regulatory incentives

universal service obligations7.20 The Universal service Regime

allows for ComReg to intervene ifuniversal services are not beingdelivered by the market. It isComReg’s goal, as necessary, andmaintaining the principle oftechnological neutrality, toimplement a uso to ensure thatbasic services are delivered, asappropriate. In the currentcontext of the transition to newnetworks, ComReg is cognisant ofthe need to avoid unnecessaryinvestment in legacy networks.

7.21 The Universal service Directiveand the Regulations placeprimary responsibility onComReg, as the independentelectronic communicationsregulator for Ireland, tosafeguard and ensure theprovision of a minimum set oftelecommunications services inthe state. ComReg may designatean undertaking, or undertakings,to satisfy any reasonable requestto provide, at a fixed location, aconnection to the publiccommunications network and apublicly available telephoneservice over the networkconnection that allows for

originating and receiving ofnational and international calls.The connection must be capableof supporting voice, facsimile anddata communications at datarates that are sufficient to permitfunctional internet access. Theserequirements are referredcollectively as access at a fixedlocation (aFL UsO).

7.22 In July 2016, eircom wasdesignated as the Universalservice Provider (UsP) for theperiod 29 July 2016 – 30 June202188 meaning that eircom mustsatisfy any reasonable end-userrequest for aFL UsO. ComReg hasmodified the definition of“reasonable access request” andintroduced new reasonableaccess thresholds (which takeaccount of the presence ofalternative Infrastructures). TheDecision is intended to lesseneircom’s obligations as the UsP tosatisfy end-user requests for aFLUsO in those parts of the statewhere there is alternativeinfrastructure/serviceproviders.

7.23 The Decision supports atransition by the UsP, as relevant,to being the provider of lastresort. During the transitionperiod when alternative networksare being deployed, ComReg’sobjective is to ensure thatreasonable requests for access ata fixed location are met, butwithout requiring unnecessaryinvestment in the UsP’s legacycopper network and withoutinhibiting the retirement of thatnetwork, once an alternative isavailable.

licence conditions (includingcoverage conditions) inpromoting investment, eitherdirectly or by enhancingcompetitive incentives toinvest.

n regulatory certainty:ComReg publishesinformation on currentlicensing, usage, its spectrumpriorities and future plans.subject to the protection ofconfidential information inline with ComReg’s guidelines(as set out in Document05/24), ComReg publishesinformation on existinglicencees’ spectrumassignments and usagebecause, among other things,this can increase the efficientuse of spectrum by betterinforming consumers and

other interested parties (suchas actual and potentialspectrum users). as is ourpractice, ComReg willcontinue to publish itsforward-looking strategy formanaging the radiospectrum, which amongother things sets outComReg’s envisagedspectrum actions. ComReg’smost recent two yearstatement was published inJune 2016.87

n test and trial: Continue topromote Test and Trial Irelandand the benefits of usingIreland as a location to test ortrial wireless products andservices in a real worldenvironment.


87 see: www.comreg.ie/publication/radio-spectrum-management-strategy-statement-2016-2018-design/

Implement a UsO to ensure that basicservices are delivered, as appropriate.

gOaL 16

88 “Universal service Requirements Provision of access at a fixed location (aFL UsO)” Response to Consultation andDecision, published on 29 July 2016, Reference Number: 16/65. Decision Number: D05/16 (“the Decision”).

COmReg PUBLIsHesINFORmaTION ONCURReNT LICeNsINg,Usage, ITs sPeCTRUmPRIORITIes aND FUTURePLaNs.



n high-speed Broadband:High-speed broadband is notcurrently a mandatorycomponent of the UsO undernational and eU law. In thecontext of the NBP, we havedecided not to use UsOFunctional Internet access(FIa) requirements as amechanism to guaranteeaccess to broadbandconnections, at this time.However, we foresee thatUsO requirements might playa role in ensuring universalavailability of affordablehigher-speed broadbandoutside the NBP interventionarea in the future. The DCCaeis monitoring the commercialrollout plans of operators toensure that services aredelivered in line withcommitments made byoperators. In the meantime,we are continuing to collectand analyse informationabout usage patterns andplanned and actualcommercial broadbanddeployments. It is anticipatedthat as new networks arerolled out, eithercommercially or as a result ofthe NBP, general access tobroadband will increase andthe minimum data ratespecified under UsO will befar exceeded. We will re-examine the issue of fastbroadband FIa requirementsand whether to designate oneor more UsPs to deliver them.

mobile coverage

7.25 It is ComReg’s goal that mobilecoverage obligations are used topromote investment whereproportionate. mobile coverage isan issue of national importance ashighlighted by its inclusion as apriority in the Programme forgovernment, and the formation ofa mobile phone and broadbandtaskforce, whose objective it is toprovide immediate solutions to thebroadband/phone coverage deficit,and to investigate how to providebetter services for consumersincluding better use of state assets.

7.26 Despite the improvements in therollout of 3g and 4g mobileservices in Ireland, there is aperception that the mobile retailconsumer experience hasdeteriorated. In its Radio spectrummanagement strategy, ComRegobserves that there may be manyfactors contributing to thisexperience and that there arevarious means of addressing thismatter. as discussed in Chapter 6ComReg has initiated a work streamto better understand these factors.

7.24 In the context of this goal, over thecoming period, ComReg intendsto:

n uso net cost: The provisionof a universal service mayresult in the UsP(s) providingdesignated services at a netcost. The europeanCommunities (electronicCommunications Networksand services) (Universalservice and Users’ Rights)Regulations 2011(“theUniversal serviceRegulations”) allow a UsP toseek funding for the net costsof meeting the universalservice obligation (“UsO”). On31 may 2011, ComReg issuedDecision No. D04/11 inrelation to the principles andmethodologies to be used incalculating the net cost forthe provision of the universalservice by the UsP. TheDecision sets out how the netcost, for all UsOs, will becalculated and how theexistence of an unfair burdenwill be determined. IfComReg finds that a net costis an unfair burden, therequirement for a sharingmechanism is triggered andany net cost is apportionedamong providers ofelectronic communicationsnetworks and services. Wereceived applications fromeircom, for funding for theprovision of the universalservice for relevant theperiods since commencing2009-2010. We havedetermined that for 2009-2010 the net cost did notrepresent an unfair burdenon eircom. In Q2 2017, we willbe consulting on our

preliminary views regardingour assessment of a numberof eircom’s applications.accordingly, for each of theseapplications, we will verify ifthere is a net cost, what it is,and determine whether ornot it is an unfair burden oneircom. If an unfair burden isfound we will complete thenecessary work to establishan industry universal servicesharing mechanism.

n review aFl uso: electroniccommunications markets arelikely to change significantlyas a result of the NBP.ComReg does not anticipatethat this will be fullyimplemented before the endof the aFL UsO 5 yeardesignation period, and weanticipate that the full effectwill not be realised during thecurrent designation period.We will, however, carefullymonitor and review thesedevelopments in order toevaluate what impact it mayhave on the provision ofbasic electroniccommunications services inthe state. The mostimmediately foreseeableevent is the NBP contractaward. accordingly, we willbegin a review 3 months afterthe DCCae has concluded theNBP contract award process.On foot of this review, we willdecide if we need tocommence a newconsultation process inrelation to aFL UsO in thestate and we will publish aninformation notice regardingthis.


mobile coverage obligations are used topromote investment whereproportionate.

gOaL 17



7.27 as noted previously, mobile coveragein Ireland, which has exceeded wellover 90% of the population (asdistinct from geography) for 2g and3g for many years, and where 4gservices are circa the 90% populationlevel, is essentially a product ofcompetitive forces which havepromoted service deployment viainnovation and investment.

7.28 ComReg recognises that competitiveforces, left to their own devices, willdeliver services to a certain level andquality. However coverage beyondthis level towards ubiquitouscoverage is unlikely to be provideddue to the uncommercial nature ofnetwork rollout in some geographicareas. Further, Ireland’s geographicand demographic characteristicspresent challenges for networkrollout, particularly into sparselypopulated rural areas.89

7.29 If society is demanding a moreextensive coverage of services thancan realistically be provided throughcommercial means, then ComRegobserves that there are certainregulatory tools available that couldbe used to incentivise infrastructurerollout into areas currentlyconsidered uncommercial. However,incentivising or requiring coverage inareas currently considereduncommercial will require thedeployment of infrastructure andcosts will be incurred, and thisrequires careful consideration.

7.30 The aim of such tools would be to fillany gap between societal demandsand commercial viability in respect of

wireless coverage. The regulatorytools potentially available to ComRegprimarily relate to the spectrumrights of use for future awards. In thecoming period, ComRegwill:

n coverage and rolloutobligations: ComReg willconsider the use of coverageand/or rollout obligations toensure the efficient use ofradio spectrum, and topromote the interests of end-users generally. In this regard,ComReg observes that thepropagation characteristics ofthe 700 mHz band arefavourable to wide areacoverage, and that the use ofcoverage and/or a targetedcoverage and rollout obligationto enhance coverage may beappropriate for this spectrumband,and

n collaboration mechanisms:ComReg will also examine theuse of licence obligations topromote cost-effectivecollaboration mechanisms(such as site/infrastructuresharing) to facilitateinfrastructure deployment tothe benefit of end-users.

7.31 Finally, it should be noted that theconsideration of such obligations andthe appropriate assignmentmechanisms is a matter that needs tobe determined on a case by case basisfor each award in light of theparticular facts and circumstancesarising in relation to the spectrumaward.


a range of agencies beyond ComReg have responsibility in relation to network resilience, reliabilityand security. The relevant stakeholders vary according to the issue at hand and its potential impact.effective engagement with these stakeholders is necessary to ensure appropriate oversight andconsistency and to avoid the duplication of activities. Details of the current agencies are below:

comreg

n Receives reports from operators on network failures above a certain threshold.

n Reports severe incidents to european Union agency for Network and Information security.

In addition to the Universal service, consumers are also entitled to access emergency call answeringservices. all providers of publicly availably telecommunication services must provide free access toemergency services.

European union agency for network and information (Enisa)

n Provides supports to the eU and the member states in enhancing and strengthening theircapability and preparedness to prevent, detect and respond to network and informationsecurity problems and incidents.

department of communications, climate action and Environment (dccaE)

n Operate as lead government Department for emergency situations relating to ICT.

n Runs the National Cyber security Centre (NCsC), which contains the Computer security IncidentResponse Team. This is focused initially on the state sector and also acts as a national point ofcontact.

n Carries out emergency response planning with gardaí, Hse and Local authorities.

n Published National Cyber security strategy identifies Critical Network Infrastructure and CriticalInformation Infrastructure as key components requiring ongoing protection.

office of the data Protection commissioner (odPc)

n The ODPC is responsible for upholding the rights of individuals as set out in the acts, andenforcing the obligations upon data controllers.

gardaí

n Criminal Investigation through garda Bureau of Fraud Investigation.

defence Forces

n Criminal Investigation through garda Bureau of Fraud Investigation.

n secures its own network and cooperates with NCsC in learning.

ExPlanatory Box 13: multi-agEncy involvEmEnt in nrrs

89 Ireland has a low population density of 67 persons per km2 compared to an eU average of 117 persons per km2.Further, Ireland has a high percentage of rural areas with a rural population density of 26 persons per km2. Rural areasaccount for 96.8% of total land area compared to 87.6% for all eU areas. The urban population (comprising 62 per centof the total population) reside on just 2.4 per cent of the total land area. Including smaller rural towns and villagesincreases the population to 69.1% of the population living on just 3.1 % of the land area. In addition, 76% of land area iscovered by farmlands and forest, with Ireland having the largest farmland utilisation in the eU. (Urban area refers totowns with a total population of 1,500 or more. Rural area refers to the population outside of Urban areas and includesthe population of towns with a population of less than 1,500 persons.)



state intervention

7.36 governments across europe haverecognised the socio-economicbenefits of widespreadconnectivity, in particularbroadband, and its importance foreconomic success and socialinclusion. The achievement ofthese socio-economic benefitsdepend on the provision ofwidespread and affordable accessto high- speed infrastructure andservices.

7.37 Private investment in networks willonly be undertaken where it ispossible to make a reasonable rateof return. There are numerousfactors which affect the likelyreturn on investment. On the costside, geographic factors andpopulation density are important.On the demand-side, likely up-take, or consumers’ willingness topay for services are important. Thismeans that private investmentalone will not be able to deliverhigh-speed infrastructure andservices to all consumers inIreland.

7.38 It is at the intersection betweencommercial investment and thoseparts of the country that wouldnot be served on the basis ofcommercial incentives alone thatgovernments have stepped in tobridge the funding gap. Publicinvestment in networks has the

benefit of providing connectivity tothose who otherwise may not, butthis investment has the potential todistort competition and provide acompetitive advantage to thosereceiving thefunding.

7.39 Public investment in networksneeds to meet state aidguidelines, and under thoseguidelines measures need to beput in place to ensure anydistortion is minimised. Typicallythese measures are put in place inthe design phase of theintervention and containmeasures such as the networkbeing open access, technologyneutral or provided on awholesale onlybasis.

7.40 as experts in the area ComRegmay be called upon to assist,where necessary, by DCCae oranother party in relation to these

network resilience, reliabilityand security (nrrs)7.32 as a society, our economic and

social activities are growingincreasingly dependent on theproper functioning of electroniccommunications systems.However, such systems arevulnerable to equipmentmalfunction, human error,malicious attack, weather eventsand incidents in other sectors (e.g.electricity outages). accordingly,network resilience, reliability andsecurity (NRRs) is an area that isbecoming more important.

7.33 There are many aspects to NRRswhich do not fall within ComReg’sremit. such aspects include dataprivacy and the protection of ITsystems from cyber- attack. avariety of public bodies currentlyhave a role in NRRs (seeexplanatory Box 13).

7.34 as an economic regulator, weconsider whether there is a risk ofmarket failure which could causeoperators to underinvest in NRRs.One potential failure is that end-users do not have the informationor technical skills to differentiatebetween operators according tothe way that the operatorsmanage risks around NRRs. Thusinvestments in NRRs may notimprove the competitiveness of

individual operators’ offerings.There is also a potential marketfailure with respect tosystemic risks – risks that couldaffect the whole industry.Investments in mitigating systemicrisk would benefit all end-users,not just the customers of theoperator making the investment.On the other hand, if all operatorsare exposed to the same systemicrisk, then there will be nocompetitive disadvantage if the riskcrystallises – so there is a reducedcommercial incentive to mitigate it.This is an area where ComRegintends to develop with the goal ofensuring that there areincentives, including regulatoryincentives, where there is a riskof market failure, to invest insecurity, reliability, andcapability.

7.35 as a first step, ComReg intends tofocus on systemic risks, sinceunderinvestment in mitigatingthese risks has the greatestpotential consequences for end-users and society. specifically:

n systemic risks to electroniccommunications systems:We plan to commission astudy to identify systemicrisks that could have awidespread impact – such asa prolonged inability of manypeople to access importantcommunications services. Thestudy will also identifywhether there arearrangements in place toassure proper managementof those risks, and the extentto which ComReg or otherpublic bodies have thenecessary powers and theresources.


There are incentives, includingregulatory incentives, where there is arisk of market failure, to invest insecurity, reliability, and capability.

gOaL 18

Where necessary assist policymakers todesign state interventions thatcomplement the market and regulation.

gOaL 19



types of public initiatives. Withrespect to public investment,ComReg’s strategic goal is to,where necessary, assistpolicymakers to design stateinterventions that complementthe market and regulation.Related to this goal:

n national Broadband Plan:ComReg is not responsiblefor the NBP, but it does havea role in the NBP process.The european state aidguidelines recognise that asnational regulatory authority(NRa) ComReg has “gainedtechnical knowledge andexpertise due to the crucialrole assigned to them bysectoral regulation. They arebest placed to support publicauthorities with regard to thestate aid schemes andshould be consulted whentarget areas are beingidentified. NRas should alsobe consulted with regard todetermining the wholesaleaccess prices and conditionsand solving disputes between

access seekers and thesubsidised infrastructureoperator.”90 ComReg may bein a position to provideindustry specific technicaladvice where appropriate. Inthis regard it has seconded anumber of staff members toDCCae in order to providesuchassistance.

7.41 In particular the NBP may, overtime, have implications forregulation, while from a shorterterm perspective, regulation andthe future of regulation may haveimplications for the tenderprocess for the NBP. In theinterests of providing as muchclarity as possible regarding theregulatory framework, ComReghas, without prejudging theoutcome of future ComRegconsultations, sought to provideregulatory clarity to stakeholderswhere possible. ComReg willcontinue to work withstakeholders in thisregard.


90 Communication from the Commission — eU guidelines for the application of state aid rules in relation to the rapiddeployment of broadband networks (2013/C 25/01).

The maNs are publicly owned fibre optic networks that allow wholesale and open access to alltelecommunication operators. a maN consists of telecoms ducting and fibre optic cable laid in aring formation in a metropolitan area and are capable of delivering virtually unlimited bandwidth to94 towns and cities throughout regional Ireland.

The maNs were funded with support from eU structural funds. In 2009, enet were awarded a 15year contract to run the maNs on behalf of the government.

national broadband scheme (nBs)91

The NBs was co-funded by the european Regional Development Fund (eRDF), and designed todeliver basic, affordable broadband to target areas across the country in which services wereinsufficient.

Three won the contract and rolled out the NBs scheme on behalf of the DCCae. Under eU state aidrules, this intervention was for a limited duration. The NBs ended following a 68 month operationalperiod in august 2014. Three continue to provide broadband coverage throughout NBs areas on acommercial basis. The government contributed €79.8 million towards the NBs.

national Broadband Plan (nBP)92

The National Broadband Plan is a government initiative with the aim to connect all of Ireland’scommunities by dealing with the broadband connectivity challenge in rural areas. The NBP aims toachieve a minimum of 30mbps download and 6mbps upload to all premises that will not be able toaccess such services through commercial investment alone. approximately 542,000 premises,accounting for 990,000 citizens (21% of national population) are included in the government’splan.93

ExPlanatory Box 14: PuBlic invEstmEnt in nEtworks

91 see: www.dccae.gov.ie/communications/en-ie/Broadband/Pages/National-Broadband-scheme.aspx92 see: www.dccae.gov.ie/en-ie/communications/topics/Broadband/national-broadband-plan/Pages/National-Broadband-

Plan.aspx93 see press release of april 4 2017 at www.dccae.gov.ie/en-ie/news-and-media/press-releases/Pages/Naughten-finalizes-

the- Broadband-Intervention-map-.aspx



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eNsURINg COmPLIaNCe WITH RegULaTORy OBLIgaTIONs eNsURINg COmPLIaNCe WITH RegULaTORy OBLIgaTIONs

n Effective deterrence: Theeffectiveness of the regimedepends not only on bringingnon-compliant conduct to anend but also on its impact interms of deterring futurenon-compliance.

8.4 an effective strategy involvingtargeted compliance andenforcement activities havingeffective deterrence properties,promotes a culture of compliancewithin regulated entities.

8.5 In principle, the elements of thestrategy form a virtuous circlewhere regulated entities comeinto compliance with respect totargeted conducts, allowing theregulator to refocus complianceand enforcement activities, andso on. Before moving on to adiscussion of the elements it isuseful to briefly review thedifferent enforcement settings.

8.1 It is one of ComReg’s statutoryfunctions to ensure complianceby regulated undertakings withregulatory obligations. suchobligations may stem directlyfrom legislation or frommeasures implemented byComReg in exercise of itsregulatory functions. In relationto this function ComReg monitorscompliance with obligations andmay carry out investigations andpursue, depending on thecircumstances, differentenforcement options.

8.2 market regulation is only effectiveand meaningful to the extent thatregulated entities comply withtheir regulatory obligations. Inthis sense, this strategic intentionsupports the previous threestrategic intentions. This Chaptersets out ComReg’s strategic goalsassociated with enforcingcompliance with regulatoryobligations with the high levelobjective of ensuring thatregulated entities comply withregulatory obligations.

8.3 a key consideration informingComReg’s strategy is the fact thatthere is a variety of differentcompliance environments in


strategic intent 04: rEgulatEd EntitiEs comPly withrEgulatory oBligations.

whatdoes thislooklike?

n Regulated entities are at all times fully cognisant of their obligationsand comply with them

n Regulated entities are deterred from contravening their obligations

n There is an institutionalised culture of compliance in regulatedentities

culture of compliance

deterrence

targetedEnforcem

ent

which ComReg is active. ComRegperforms a variety of monitoringand enforcement roles such ascompliance with spectrumlicensing conditions, complianceby operators with obligationsimposed by ComReg andcompliance by operators withobligations imposed by statute,in both a retail and wholesalecontext. In general termshowever, it is useful to think ofthe elements of an enforcementstrategy in the following terms:

n culture of compliance: Thefirst best situation is whereregulated entities complyvoluntarily with theirobligations and have aninternal culture ofcompliance.

n targeted compliance andEnforcement: Targetedcompliance and enforcementactivities involve directingresources toward activities -such as active monitoring,investigations, and in theevent of a finding of non-compliance, the pursuit of anappropriate enforcementaction – in a way thatmaximises the effectivenessof the regime intotality.

THe eLemeNTsOF THesTRaTegy FORma VIRTUOUsCIRCLe

Figure 13: optimal Enforcement


eNsURINg COmPLIaNCe WITH RegULaTORy OBLIgaTIONseNsURINg COmPLIaNCe WITH RegULaTORy OBLIgaTIONs

short-term, partial compliancemay be sufficient to encouragemarket entry. But access seekers’confidence to continue to investcan be undermined if, forinstance, they discover later thatthey have been treated in adiscriminatory fashion or thatthere has not been fulltransparency as required by theregulatory regime, or that theiraccess requests have beenunnecessarily delayed. For thisreason every episode of non-compliance has potential toseriously damage competition– especially if it is an episode thathas not been prevented, detectedor remedied by the smP operator’sown internal complianceprocesses.

8.12 ComReg is responsible formonitoring and enforcingcompliance with such regulatoryobligations. In addition to thesmP obligations there are variousobligations monitored andenforced by ComReg arisingunder the eCF and under the2002 act. ComReg is responsiblefor monitoring and enforcingcompliance with such regulatoryobligations. ComReg also has arole in relation to disputes.94

8.13 There are several reasons foropening investigations. Theseinclude own initiative monitoringof compliance by undertakingswith existing obligations,investigations initiated based oninformation coming to the

attention of ComReg through suchmechanisms as complaints fromundertakings. There are alsoformal requests fromundertakings for ComReg to utiliseits dispute resolution powers.

compliance and enforcement inthe context of consumerprotection8.14 ComReg is responsible for

monitoring and enforcingcompliance by undertakings inelectronic communicationsmarkets as well as premium rateservice providers with a variety ofconsumer protection provisions.The principal consumerprotection laws arise from theeCF which protect end-users andsubscribers noting particularlythe provisions of the Universalservice Regulations and the DataProtection and PrivacyRegulations regarding unsolicitedcalls as well as, the 2002 act andobligations on all undertakingscontained in the generalauthorisation95, in addition to theConsumer Rights Regulations96

and the Unfair Contract TermsRegulations.97

8.15 Broadly speaking, the principalconsumer protection provisionsrelateto:

n Obligations on the UsP toprovide access at a fixedlocation as well as certainquality of servicerequirements

different Enforcementsettings8.6 In relation to electronic

communications markets,ComReg has three principal areasof responsibility in respect ofcompliance andenforcement:

n spectrum

n Wholesale regulation, and

n Consumer protection

compliance and enforcement inthe context of spectrummanagement8.7 ComReg has a statutory function

to manage the radio frequencyspectrum in Ireland. Thisincludes:

n monitoring and supervisingcompliance with conditionsattached to spectrum rightsof use (e.g. the generalauthorisation and licenceconditions)

n monitoring the use of theradio spectrum to detectunauthorised use and takingappropriate enforcementaction, and

n Investigating instances ofinterference reported bylicencees and the generalpublic, and take appropriateenforcementaction.

8.8 With respect to unauthorised useof spectrum, typical issues thatarise include the unlicensed useof the radio spectrum forbroadcasting, non-renewal ofwireless telegraphy licences, and

the use of equipment that is notfit for use within the eU.

8.9 ComReg undertakes a proactiveseries of monitoring activities,including but not limited to, drivetesting of the mobile networks toassess coverage requirements,testing to ensure compliance bylicencees with non-ionizingradiation limits, and regularinspections of radio sites andinstallations.

compliance and enforcement inthe context of wholesaleregulation8.10 ComReg may impose obligations

on undertakings where they arefound to have significant marketPower (smP). The obligations arewholesale remedies tocompetition problems identifiedin the regulated markets and areaimed at promoting efficiency,sustainable competition, efficientinvestment and innovation and togive the maximum benefit toend-users andinclude:

n Obligations to providenetwork access

n Obligations to have in placeprice controls such as costorientation and costaccounting

n Obligations to act in a non-discriminatory manner,and

n Obligations to publish certaininformation.

8.11 It is only when the smP operatorsfully comply with their obligationsthat the identified competitionproblems are mitigated. In the


94 Disputes may arise under Regulation 31 of the Framework Regulations, section 57 of the 2002 act, and Regulations 4, 5,6, 7, 8 and 9 of the Broadband Cost Regulations.

95 Regulation 8(1) of the authorisation Regulations provides that ComReg may specify conditions to be attached to ageneral authorisation.

96 european Union (Consumer Information, Cancellation and Other Rights) Regulations 2013 (s.I. No. 484/2013).97 The european Communities (Unfair Terms in Consumer Contracts) Regulations 1995 (s.I. No. 37 of 1995), as amended.

Note, in particular amendments by european Communities (Unfair Terms in Consumer Contracts) (amendment)Regulations 2014 (s.I. No. 336 of 2014).



n systematic, effective anddocumented monitoring ofinternal controls,and

n Regular communication,guidance and training at alllevels of the company oncompliance programs.

8.20 Where appropriate, ComReg willutilise engagement and dialogue tohelp foster the desired behaviourswithin chosen sectors of industry.This can be of particular relevancein the spectrum compliancearea.

targeted compliance and Enforcement activities

8.21 as ComReg has limited resourcesit must prioritise the cases that itinvestigates. In this contexttherefore, it is ComReg’s goal thatcompliance and enforcementactivities are targeted andprioritised appropriately. Thedifferent enforcement settings inwhich ComReg operates meansthat a prioritisation strategy needsto be tailored to the relevantcircumstances.

8.22 In the spectrum managementcontext, cases are prioritisedbased on the severity of theinterference and the nature of theservice affected. The highestpriority is reserved for cases ofinterference involving an imminentthreat to safety-of-life and seriousinterference caused to emergency

services, air traffic control andmaritime traffic control whichseriously hampers radiocommunications, e.g., interferencewhich significantly disruptscommunications for air TrafficControl or the emergency services.The next level of priority isreserved for cases of interferencethat renders a licensed channelunusable or has a detrimentaleffect on the economic interests ofa licensee. Cases involving lesssevere interference that is anuisance, occasional or minor areafforded lower priority.

8.23 In wholesale regulation,enforcement is prioritised in caseswhere an smP operator’sbehaviour has greatest potentialto harm competition – bothdirectly and by reducing theconfidence of other operators inthe effectiveness and predictabilityof the regulatory regime. Breacheswhich come to light as a result of asmP operator’s own internalcontrol system may be of a lowerpriority for enforcement if theyare transparently reported,proactively and effectivelyremedied, and the failure ofcontrols which led to the breach isalso addressed, in a context of acontinually improving controlenvironment. However ComRegwill also take into account theseverity of the breach whendeciding whether to prioritiseenforcement action.

8.24 In the consumer protectioncontext, cases may be prioritisedusing an assessment of theimportance of the obligationconcerned in ensuring that end-users are able to exercise choiceand use communications serviceswith confidence. This assessmentmay be informed by trends in

n Obligations on eCsundertakings in relationroaming, net neutrality,number portability, switching,transparency, contracts andbilling,and

n Obligations on PRs providers.

8.16 There are several reasons foropening investigations. ComRegmonitors trends in contactsreceived from the general publicmade via ComReg’s consumer careteam and ComReg’s website.ComReg investigates complaintsand trends, and makes anassessment to determine theirvalidity. ComReg may also openown initiative investigations tomonitor the general conformanceto obligations falling withinComReg’s remit. some of the keyissues that arise in this context, andas discussed in Chapter 6, relate tobilling issues, contract terms,informed consent to bill/providePRs service. The Net NeutralityRegulations and RoamingRegulations present new andadditional areas for focus.

culture of compliance

8.17 ComReg’s view is that theoptimumsituation is whereregulated entities are fullycognisant of their obligations,comply with them and have aninternal culture of compliance. Inthis context it is ComReg’s goalthat regulated entities are pro-

active in ensuring their owncompliance. ComReg stronglyencourages operators to haverobust internal controls andpolicies intended to prevent anddetect non-compliance.

8.18 Regulated entities, particularlythose subject to obligations aimedat ensuring non-discriminationmay choose to put in place,operational and governancemeasures with the purpose ofpromoting principles ofcompliance at all organisationallevels. When implementedeffectively, such measures canensure compliance, and reduce theneed for regulatory interventionand thereby promote effective andsustainable competition.

8.19 Operators should consider, interalia, the following practices forpromoting a culture of compliance:

n support and commitmentfrom senior management forinternal complianceprograms

n a clear and enforced policyon compliance, includingappropriate disciplinaryprocedures, prohibiting non-compliant behaviours at alllevels

n Oversight of complianceprograms by a separatemonitoring body such as aninternal audit committee,represented at a senior levelwith adequate resources,independence and authority

n Risk-based internal controls,designed to ensurecompliance that are regularlyreviewed and maintained


Compliance and enforcement activitiesare targeted and prioritisedappropriately.

gOaL 21

Regulated entities are proactive inensuring their own compliance.

gOaL 20



penalties. In 2016 ComReg madea second submission to LawReform Commission makingsimilar arguments in relation tothe necessity for theenforcement regime to embody asignificant element of deterrence,especially in the context of highvalue dynamic markets, such aselectronic communicationsmarkets, where timely andeffective intervention is critical tomaximising societal welfare.

8.30 ComReg considers that thecurrent enforcement regimecould be improved in three mainareas:

n Provide for administrativesanctions: It would greatlyfacilitate effective regulationof the electroniccommunications sector ifComReg could directlyimpose civil financialsanctions (administrativefines) in appropriatecircumstances. In contrast tocourt imposed financialsanctions, administrativefines can be appliedimmediately and thus act asa greater deterrent againstbreaking the law.administrative fines enablethe regulator’s expertise,including its knowledge ofthe relevant facts andparticular sectors, to be fullyand proportionatelyutilised.

n increase the level offinancial penalties:Potential fines must besufficiently high to act as astrong deterrent. We willcontinue to advocate for anincrease in the maximumfine that may be imposed forcriminal offences, following

conviction on indictment.This was reduced in 2011 to amaximum fine of only€500,000, which is too low tohave a significant deterrenteffect in the context of thescale of many of theoperators in thetelecommunications sector.We consider that theprevious provision for finesof up to 10% of turnover or€5 million, whichever is thehigher, would be moreappropriate.

n standardised powers:Regulatory powers, and inparticular certain inspection,investigation andenforcement powers, shouldbe as standardised aspossible across all regulatorybodies. This would improvethe efficiency andeffectiveness of regulation.

8.31 ComReg recognises that differentcompliance and enforcementstrategies may have a moreeffective deterrent effectdepending on the setting. Forexample, compliance andenforcement strategies whichattempt to leverage reputationaleffects may be effective. This kindof strategy is more effective in asetting where the influence ofconsumer behaviour isimportant, in particular wherethere are opportunities to switch.

8.32 Over the coming period, ComRegwill continue to advocate, basedon its expertise and experience ofregulation in the electroniccommunications sector forlegislative amendments that willenable it to deliver on its strategy.

complaints received from thegeneral public made via ComReg’sconsumer team and ComReg’swebsite. There is a focus on theconsumer journey and onmonitoring compliance withcontract obligations, billing,switching, net neutrality andseeking redress. We have aparticularly low degree oftolerance for breaches ofobligations to ensure access toemergency call answering servicebecause of the obvious importanceof emergency calling. In the contextof PRs ensuring that clearinformed consent is provided is akey concern.

Effective deterrence

8.25 Regulatory breaches harmconsumers, firms and industry.strong regulation is thus critical tothe economy in general. Theavailability of robust enforcementpowers is, in turn, crucial to theefficacy of regulation. effectivepowers of enforcement andsanction ensure that regulatoryaction acts as a genuine deterrent,both to the party being punishedand to other regulated parties. Inthis context it is ComReg’s goalthat we have an effective set ofpowers to incentivisecompliance and effectivelymonitor and enforce.

8.26 ComReg is very active inregulatory enforcement throughits engagement with industry andin bringing civil and criminalenforcement actions whereengagement has failed or isinappropriate. Where necessary,ComReg’s enforcementprogramme targets seriousbreaches, which are sometimesdeliberate and often affect largenumbers of customers and end-users. service providers oftenprofit significantly, and unjustly,from breaking the law. some ofComReg’s enforcement activities,as discussed above, also concernmatters where there is a possiblethreat to public safety andsecurity.

8.27 When seeking civil penalties forbreaches of obligations thatdamage competition, ComRegwill use the approach taken bycompetition authorities in manyjurisdictions of relating the size ofthe penalty sought to the size ofthe market affected by thebreach. This approach shouldincrease the deterrent effect ofthe current regime.

8.28 However, ComReg is oftenhampered by the limits of theregime within which it operates.Improvements to its enforcementpowers (both criminal and civil)would facilitate ComReg inmaximising its limitedresources.

8.29 ComReg has advocated forchanges to the enforcementregime in which it operates. In2012, ComReg made a jointsubmission, with the CeR,Competition authority and theIrish medicines Board, to theLaw Reform Commission makingthe case for enhancedenforcement powers and


We have an effective set of powers toincentivise compliance and effectivelymonitor and enforce.

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BeINg aN eFFeCTIVe aND ReLeVaNT RegULaTORBeINg aN eFFeCTIVe aND ReLeVaNT RegULaTOR

n People and processes:Underpinning the above fourkey drivers of organisationalsuccess is the requirementthat ComReg is adequatelystaffed by an agile, skilledand motivated workforcewho are expert in their fields,and are supported byefficient organisationalprocesses.

9.4 This is a foundational relationshipin the sense that success underthese five headings contributes toa greater likelihood of success forComReg in achieving its strategicintentions set out in the previouschapters, and ultimately, itsmission.

9.5 Finally, this Chapter alsoaddresses the question of staffresources. In common with otherpublic bodies, ComReg reducedits staff numbers as aconsequence of the financialcrisis, with staff falling from 124to 115 FTes. In order to delivernew regulatory functions andimprove the timeliness andeffectiveness of existing ones,ComReg will look to ensure thatstaffing levels, over the next 5years, are adequate. We areseeking the necessary ministerialconsents to increase staffnumbers to the level we considernecessary to deliver the strategyset out in this statement. ComRegbelieves that the benefits thatwould flow to end-users andsociety from adequate staffinglevels would outweigh theassociated costs by an order ofmagnitude.

9.1 Underlying all activities in ComRegis the principle that well-functioning markets deliveroptimal outcomes in terms ofprices, quality, choice andinnovation. ComReg recognisesthat, due to the presence ofmarket failures and theuncommercial nature of providingcertain services, unregulatedcommunications markets may notdeliver outcomes which are eitheroptimal or adequate fromsociety’s perspective. Thestrategic intents, associated goalsand specific initiatives set out inthe previous four chapters are allgrounded on this principle.

9.2 ComReg recognises that, in thecontext of changing technological,market and public policycircumstances, ComReg cannotadopt a passive stance. Instead, toensure continued effective andrelevant regulation, it will strive tobe an active and dynamicorganisation that is capable ofresponding to the rapidlychanging environment and ispositioned, in terms of expertise,robust analytics and up- to-dateinformation, to address issuesthat affect our ability to fulfil ourmission.


strategic intent 05: comrEg is an EFFEctivE and rElEvantrEgulator


n Infrastructure coverage that enables all end-users to participate in thedigital society

n Competing infrastructure providers where economically feasiblen Wholesale eCs services that meet market demandn a sector that is attractive to investors

9.3 This Chapter sets out goalsassociated with being aneffective and relevantregulator. Figure 14 belowillustrates the relationshipsbetween five key drivers oforganisational success:

n data (or market intelligence):ComReg requires access tohigh-quality, timely andappropriate data so that itcan continue to develop adeep understanding of thesector.

n analysis (robust analytics):ComReg must have thecapacity to undertakeappropriate data analytics.

n Engagement (and thoughtleadership): ComReg needsto engage proactively,expertly and persuasivelywith stakeholders, bothdomestic and international.

n mandate: ComReg shouldbe able to leverage itsexpertise in the sector andcontribute positively topublic policy discussions,both domestic andinternational, which mayimpact on ComReg’s ability todeliver on its mission.

Figure 14: Ensuring Effective and relevant regulation

mandate data

analysisEngagement

People and Processes



the challenges posed by emergingtechnologies. For instance, inorder to adequately protectconsumers, ComReg needs tounderstand their changingexpectations, behaviours andpreferences (see also Chapter6).

9.9 In particular, ComReg recognisesthat qualitative aspects of theconsumer experience areincreasingly important. Consumersand other end-users are not justconcerned with price, they are alsoconcerned other qualitativeaspects of their connectivityexperience. similarly, ComRegneeds to understand theincentives facing industryoperators. In this context,collecting and analysingappropriate information helps usto identify future challenges,opportunities and threats, and inparticular, likely sourcesof market failure, and to formulateand implement responses whichwill best facilitate the achievementof our strategic intentions. In thisrespect, it is ComReg’s goal thatrobust data analytics, includingservice quality and availability,are based on the timelyprovision of reliable data whichis collected efficiently, regularlyand handled properly.

9.10 although most of the datacollection and analysis thatComReg undertakes relatesdirectly to markets within theelectronic communications sector,ComReg recognises that the sectordoes not operate within a vacuumand, as such, that we must becognisant of the wider socio-economic environment withinwhich we operate (see thediscussion of related markets inChapter5).

9.11 maintaining an awareness of, andinsight into, the broaderenvironment is necessary forComReg to operate effectively andefficiently over time; in particular,it is necessary to allow forappropriate preparation for bothopportunities and challenges.ComReg’s market intelligence goalis by making use of a wide rangeof data, including market dataand consumer insights, we havea deep understanding ofmarkets, including those relatedto the markets we regulate, andare able to identify consumerbenefits and harm and marketfailures.

data and analysis9.6 access to high-quality, timely and

appropriate data is key toComReg’s work. ComReg gathersinformation from a wide range ofindustry players, using regulatorypowers where appropriate. Thisdata is supplemented withinformation from other sourcesincluding survey data.

9.7 Data in ComReg is utilised in anumber key ways. Forexample:

n regulatory decision-making: ComReg collectsand analyses data in thecontext of regulatorydecision-making. Forexample, large quantities ofdata are collected for thepurposes of carrying outmarket reviews. Data is alsocollected for other regulatorypurposes including, forexample, the carrying out ofregulatory impactassessments. ComReg has aresponsibility to ensure thatregulatory decisions arisefrom timely, objectivelyjustified analysis based onhigh-quality, accurate data.

n monitoring, complianceand enforcement: ComRegperforms a variety ofmonitoring and enforcementroles such as compliancewith spectrum licensingconditions, with obligationsimposed by ComReg andwith obligations imposed bystatute. Data is collected forthese purposes in a numberof ways. For example,ComReg has deployed aremote monitoring systemwhich gathers and stores

spectrum usage data whichinforms ComReg’s spectrummanagement activities. In theconsumer protection areaComReg monitors trends incomplaints from the generalpublic. This information isused to assist in theprioritisation and allocationof resources.

n informing industry andend-users: ComReg collectsdata for the purposes ofproviding information toconsumers and other end-users. For example, ComRegcollects information fromoperators on the prices ofbroadband, mobile and fixedline services, as well asbundles of such services. Thisinformation is collated andmade available via ComReg’swebsite,www.comreg.ie/price-comparison. ComReg alsocollects statisticalinformation on the Irishelectronic communicationsmarket and benchmark datafrom other countries. Thisdata is published in theQuarterly key Data Reportand made available onComReg’s data portal,www.comreg.ie/industry/electronic-communications/data-portal.

9.8 To be an effective and relevantregulator, ComReg requirestimely access to up-to-dateinformation on trends anddevelopments in the sector. Inaddition to data on subscribers,products sold, prices and networkcoverage, ComReg needs tounderstand how end-users andindustry are likely to respond to


Robust data analytics, including servicequality and availability, are based on thetimely delivery of reliable data which iscollected efficiently, regularly andhandled properly.

gOaL 23

making use of a wide range of data,including market data and consumerinsights, we have a deep understandingof markets, including those related tothe markets we regulate, and are able toidentify consumer benefits and harmand market failures.

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Engagement

9.13 ComReg has a wide range ofstakeholders ranging fromindividual consumers and theirrepresentative groups, throughelectronic communicationoperators and their industryrepresentative groups, to domesticgovernment stakeholders andinternational bodies such as theITU, RsPg, BeReC andthe european Commission. One ofComReg’s organisational values istransparency and we see honestengagement with all stakeholdersas highly beneficial. In this context,it is ComReg’s goal that we areproactive on engagement with arange of stakeholders. We workto continue to nurture andenhance our reputation as a centreof excellence and as a crediblesource of unbiased, high-qualityinformation. Our staff membersare subject matter experts and weaim to be seen as thought leadersand to use our knowledge andexpertise to contribute to publicdiscourse and to policydiscussions. However, theindependence and objectivity ofComReg is alwaysassured.

9.14 ComReg recognises the need totailor its communication todifferent stakeholder groups. Thusengagement takes a number offorms. Forinstance:

n Formal consultation: In thecontext of regulatory

decision-making,stakeholders have theopportunity to provideevidence and feedback andexpress opinions ondeveloping regulatorymeasures and proposedregulatory decisions throughthe formal consultationprocess. By allowing time forstakeholders to formallyexpress their opinions, thisprocess facilitates morerigorous evidence baseddecision-making, knowledgesharing and a greater buy-infrom all industry members.ComReg has developedConsultation guidelines tofacilitate effectiveengagement.

n advisory panels: ComRegperiodically hosts panels togain insights into consumerissues including issues forend-users with accessibilityrequirements.

n industry forums: ComReghosts a number of industrystakeholder forums. Themain objective of theseforums is to facilitate thedevelopment of newregulated wholesale productsand changes to existingproducts. These forums alsoprovide the industry with theopportunity to communicateon topical issues.

n website: as previouslynoted, ComReg’s view is thatits website (www.comreg.ie)is a key tool for engaging witha range of stakeholdersincluding industry andconsumers. a vast amount ofinformation about who weare, what do we, our legal

9.12 Related to these two goals, overthe coming period ComReg plansa number of key initiatives:

n data strategy: Datagovernance and dataanalytics are prioritycompetencies which ComRegmust continue to develop,adopting, where resourcespermit, best-practicesolutions to meet its needs.Data integrity and datasecurity form cornerstones ofhow ComReg governs datawithin its control. In 2016,ComReg reviewed itsapproach to data. The reviewhighlighted the need for thecontinued development ofdata warehousing capabilitiesas part of a broader datagovernance strategy. Theidentification and adoption ofsuitable data analysistechniques and tools isimportant to ComReg’scontinuing efforts to engagewith increasingly complexmarket data.

n Quarterly key data report(Qkdr): We intend toenhance the process forcollecting, publishing, andproviding information on keymarket metrics. ComRegintends to review itsQuarterly key Data Report(QkDR) publication whichprovides performancemetrics on a range ofindicators related to theelectronic communicationsmarket. In the context of ourbroader data strategy, andworking with operators andother key stakeholders,ComReg intends to carry outa review of its QkDR toensure that it remains fit-for-

purpose both in terms of thekey trends that it monitors,how data is collected fromoperators and made publiclyavailable. ComReg alsointends to review how itcollects other data fromoperators, including formarket analysis purposes.The efficient and effectivecollection of data, includingthe processes and procedureswhich underpin it, can havemutual benefits for bothindustry stakeholders andComReg.

n independent research:ComReg recognises theimportance of originalresearch in providing insightsinto the particular features ofthe Irish consumer and theIrish electroniccommunications market. Forexample, a betterunderstanding of how Irishconsumers make decisionswill assist ComReg indeveloping appropriate andtargeted interventions toensure that they will have theoptimal experience and thattheir rights are protected. It isfor that reason that we areworking on a number ofprojects with the economicand social ResearchInstitute (esRI). Collaboratingwith a research institutionsuch as the esRI providesComReg with access to datasources and quantitativetechniques which may nothave been available to usotherwise, and facilitatesconversations with expertswhose perspectives maydiffer from our own.


We are proactive on engagement with arange of stakeholders.

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thrive. We meet with, and haveactive and leadership roles, in arange of international bodies,including the Body of europeanRegulators for electronicCommunications (BeReC), theRadio spectrum Policy group(RsPg) and the europeanConference of Postal andTelecommunicationsadministration (CePT).

9.17 Over the coming period, ComRegplans a number of keyinitiatives:

n communications strategy:It is imperative that ComReg’sstakeholders understand thenature of and rationale forour work. In order to achievethis objective, ComReg takesa strategic approach tocommunicating with itsstakeholders, and uses arange of tools andtechniques including itswebsite and social mediafeeds. ComReg will ensurethat its Communicationsstrategy is flexible enough todeal with the changingdemands and needs ofconsumers and the electroniccommunications sector.

n mobile and Broadbandtaskforce: ComReg iscurrently working with twogovernment departments aspart of the work of thisimportant taskforce. We willbe engaging withstakeholders as appropriateto implement the actions andoutputs of the Taskforce toenhance mobile coverageand broadband availabilitythroughout the country (seeChapter6).

n the new draft directive: aspreviously noted (seeChapter 3 for discussion), inseptember 2016 theCommission published adraft electronicCommunications Code (eCC)which is intended to replacethe current regulatoryframework. In a furtherproposal, the Commissionhas also stated its intentionto reinforce both the role ofNRas and BeReC to ensure amore coordinated,harmonised application ofthe rules throughout the eU.While ComReg generallywelcomes the Commission’sproposals, we have concernsthat a number of aspects ofthe proposals may have theeffect of reducing ComReg’sflexibility to adapt to nationalcircumstances and mayinhibit the effectiveness ofregulation in the sector. Thedraft eCC and BeReCRegulations are now subjectto the eU legislative processand ComReg intends to playan active role during thisprocess by providing expertand independent advice, asrequested, and, through itsmembership of BeReC, to theeuropean institutions.

9.18 ComReg is committed toappropriate and necessaryengagement with all of itsstakeholders. We will continue toengage with our stakeholders ona regular basis in order to be ableto respond to their changingneeds.

basis and the structure ofComReg is available, alongwith an archive ofpublications, decisions andconsultations.

n In 2016, the website wasentirely updated. ComRegwill ensure that the contenton its website is up-to-dateand may be easily be used byits stakeholders. The site nowconforms to the W3C/WaI’sWeb Content accessibilityguide 1.0, Conformance Levelaa. The increased accessibilityof the website has simplifiedinteraction with ComReg andimproved services tostakeholders. ComRegrecognises that thetransposition of the eUDirective on “accessibility ofthe websites and mobileapplications of public sectorbodies” will occur within thelifetime of thisstrategy.

n oireachtas committees:ComReg is obliged to appearbefore Dáil Committees whenrequested. ComReg believesthat such appearances are animportant part of itsengagement strategy withone of its key stakeholders,Oireachtas Éireann.


The legislative mandate evolves toenable us to deliver strategy.

gOaL 26

9.15 ComReg operates within alegislative framework, as discussedin Chapter 2. However, thatlegislative framework is subject toreview and periodic amendment toreflect changing technological,economic and social factors. In thiscontext it is ComReg’s goal toensure that the legislativemandate evolves to enable us todeliver strategy. This may involveadvocating domestically forchanges in legislation and, asdiscussed in Chapter 7, forchanges in compliance andenforcement activities where webelieve that law reform andlegislative revision in respect ofexisting powers and thedevelopment of additional powersare required for the achievementof our goals.

9.16 ComReg also contributes toregulatory policy discussions andinputs to regulatory decisionmaking in an internationalsetting. The nature of theelectronic communications sectorrequires internationalcollaboration and harmonisedapproaches. ComReg managesand develops Irish regulatoryinput into the negotiation ofeuropean and internationalpolicy, standards, and legislation.This international collaborationfacilitates the development of anopen and competitiveenvironment in which innovation,creativity and competition can




People and Processes

9.19 ComReg’s ability to deliver thisstrategy depends on its staff.ComReg employs a professionalworkforce, comprisingaccountants, economists,engineers, lawyers, and publicpolicy specialists. The staff atComReg work on cross-disciplinaryteams which promote knowledgespillovers, and stimulate innovativeways of viewing issues anddeveloping ideas.

9.20 During the period of the financialcrisis, in common with other publicbodies, ComReg reduced itspermanent staff. This strategystatement calls for ComReg toundertake a number of newactivities in areas such as netneutrality, the mobile consumerexperience, and monitoring of eCsand related markets. In addition itcalls for us to increase ourcompliance and enforcementactivities and to conduct activitiessuch as different smP analysis anddifferent spectrum assignmentexercises faster and/or inoverlapping timescales. In order todo this, ComReg will require anincrease in its permanentheadcount and we shall seek thenecessary consents for this tohappen.

9.21 ComReg works continually toenhance the skills, knowledge andcapacity of its staff, to ensure thatthey remain up-to-date andrelevant. This is important in asector as dynamic as electroniccommunications, and alsocontributes to staff satisfactionand staff retention. In this context,it is ComReg’s goal that wemaintain an agile, skilled andmotivated organisation.

9.22 ComReg’s HR policies and systemshave received externa recognitionincluding:

n Continuous professionaldevelopment accreditation byengineers Ireland, theassociation of CharteredCertified accountants (aCCa)and the Institute of CertifiedPublic accountants in Ireland(CPa)

n gold standard award 2010from NsaI (Nationalstandards authority ofIreland), and

n Various awards from the IrishInstitute of Training andDevelopment (IITD) and theNational Irish safetyOrganisation(NIsO).

9.23 We have an externally recognisedmentoring programme which hasreceived excellent feedback and isregarded as a relevant andempowering initiative by bothmentors and mentees. We willcontinue to run and refresh this aswe focus on retention andengagement initiatives. We wantemployees to be proactive indeveloping both themselves andthe business, and to contribute tothe internal dialogue on how to getthe best results for ourcustomers.

9.24 ComReg’s success as anorganisation also depends on thestructures within which its staffwork as well as the systems andprocesses that support them.ComReg recognises the necessityof being responsive and having theflexibility as an organisation toreact to unanticipated situations.Wemust be structured so thatdecisions are made in a timely,transparent, replicable, and robustmanner and that all processes runeffectively, efficiently and reliably.However, we must be flexibleenough to adapt to a continuouslychanging sector. In this context it isComReg’s goal that we haveefficient and effective processesand systems.

9.25 Over the coming period, ComRegplans a number of keyinitiatives:

n code of Practice for thegovernance of stateBodies: There is arequirement on all publicbodies to meet the higheststandards in governance. TheDepartment of Publicexpenditure and Reform(DPeR) published in august2016 the Code of Practice forthe governance of stateBodies which sets out thebusiness and financialreporting requirements to beobserved by state bodies. Weintend to carry out a reviewof this Code and, whereappropriate, implement the

We have efficient and effectiveprocesses and systems.

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We maintain an agile, skilled andmotivated organisation.

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resources

9.30 ComReg’s ability to deliver thisstrategy depends on its availableresources. as electroniccommunications becomeevermore more important toeconomic and social life, effectiveregulation of the sector is essentialto ensuring that communicationsmarkets operate in the interests ofend-users and society. In thiscontext, it is ComReg’s goal toensure that we have sufficientresources to fulfil ourorganisational strategy.

9.31 as discussed in chapter 7, over thelast seven years, €3.79 billion –equivalent to €9 million everyworking day – has been invested infixed and mobile networks,enabling high-speed datacommunications both at fixedlocations and on the move.Regulation has been a criticalfactor in enabling this investmentto occur. given the importance ofcommunications markets and thescale of the benefits that flow fromtimely and effective regulation, thedownside risk of an under-resourced regulator isconsiderable. By contrast, the costof ensuring that the regulator isproperly resourced is an order ofmagnitude less than the benefitsthat can be expected to flow.

9.32 subject to obtaining the necessaryconsents, ComReg intends toincrease its staff numbers over thenext five years.

9.33 In this context, ComReg hasreviewed its manpowerrequirements for the next fiveyears. The review takes account of:

n Opportunities to reducemanpower needs through IT-enabled business change

n striking an appropriatebalance between in-houseresources and outsourcing

n The benefits of deliveringexisting functions morequickly and effectively,especially in relation towholesale regulation andspectrum managementactivities, and

n New functions that haverecently been added, as wellas further functions that arelikely to be added, to ourmandate as a result ofdevelopments in europeanlaw, and national policyinitiatives.

9.34 This strategy statement sets out achallenging programme ofactivities for ComReg over thecoming years. The benefits, bothdirect and indirect, that could beexpected to accrue to society aresubstantial. such benefits clearlyoutweigh the incremental resourceincrease required to enableComReg to maximise theeffectiveness of regulation anddeliver on that programme.

requirements relevant toComReg by July 2017.

n internal processes: Theanticipated changes in theregulatory environmentmean we will need to look atthe way the Corporateservices Division supportsother divisions. In particular,we plan to carry out a reviewof our financial and non-financial reporting processesto determine if they willcontinue to be appropriateand relevant to the divisions.We will also examine our riskmanagement processes toensure they are compliantwith best practice and assistour decision-makingprocesses. as a generalmatter, we will seek tofurther automate ourprocesses to improveefficiencies within theorganisation and assist indelivering a better service tostakeholders.

9.26 as stated earlier, ComReg willcontinue to develop its datagovernance strategies and dataanalysis capabilities in order to beable to engage with the scale andcomplexity of data needed toperform its functions and attain itsgoals. This will include theenhancement of data analysistools and skills to support ourprofessionals in delivering on thisstrategy and their potential.administrative processes will alsocontinue to be examined and theuse of IT systems to enhanceefficiency evaluated to driveprocessimprovements.

9.27 as communications technologyand the use of the internetdevelop, delivering ComReg’smandate is becoming morecomplex and there is a greaterrequirement for human capital toensure it is delivered. equally, thescale of the benefits from timelyand effective delivery of ourmandate isincreasing.

9.28 In this context, ComReg staffingrequirements take accountof:

n striking an appropriatebalance between in-houseresources and outsourcing

n The benefits of deliveringexisting functions morequickly and effectively, and

n New functions that will beadded to our mandate as aresult of developments ineuropean law, and nationalpolicyinitiatives.

9.29 against a backdrop of a highperforming Irish economy whereunemployment is expected tocontinue to fall, talent is at theforefront of the agenda. We arecompeting for this talent withlarge private sector organisations- including telecoms firms - whoare less constrained regardingremuneration. In thisenvironment, we intend to focuson retaining our existing talentpool as we recruit to meet ourstaffing requirements. We willensure that our new and existingstaff are developed, trained andempowered in an environmentconducive to achieving maximumpotential.


We have sufficient resources to fulfil ourorganisational strategy.

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an Coimisiún um Rialáil CumarsáideCommission for Communications Regulation

1 Lárcheantar na nDugaí, sráid na ngildeanna, BÁC 1, Éire, D01 e4x0.One Dockland Central, guild street, Dublin 1, Ireland, D01 e4x0.Teil | Tel +353 1 804 9600 Rphost | email [email protected]íomh | Website www.comreg.ie


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