September 25, 2006 at 7:48PM What the government really ought to do about Local Loop Unbundling
The Irish government needs to take a leaf out of Spain’s book. Back in 1997, the Spanish government started down the road of telecoms market deregulation, part of which involved privatising Telefonica, the then state-owned telecoms company. Much like eircom here, Telefonica abused its position as the dominant market player.
Today, Telefonica, like eircom, is still by far the dominant operator in its market. But Spain, unlike Ireland, enjoys a pretty competitive broadband market. Why is that? Here’s why:
Spain’s regulatory body (the CMT), in agreement with the EU mandate to provide access to the “last mile”, forced Telefonica to start the unbundling process in 2001, with the first local loops in place at the end of that year. Telefonica was not very collaborative at first on the co-location process, and was fined twice by the CMT for not allowing effective competition on the local loop. The CMT has intervened and has facilitated co-location. It has set as well a precise description of the service and a price list for Telefonica’s co-location access services. At year end 2002, three fourths of the sites were open for co-location.
The Spanish government ended up imposed a rising daily fine to force Telefonica to co-operate. The result? In a year, LLU was virtually complete, making it one of the fastest unbundlings in Europe. Money talks, and as a business, a telecom operator is there to make money. Anything that impedes that goal has to be routed around. In Telefonica’s case, that was a prohibitive fine that could only be avoided by completing LLU.
So, what are the Irish government and communications poodle doing? Nothing. Noel Dempsey can say we’ve “smashed” the broadband target he set, but frankly, you can achieve anything if you set your goals low enough. Cop on, Noel, and do something right.
Note for people people coming here from The Inquirer
Much as I’d like to say that you can treat this article as authoritative, don’t. It’s correct, as you’ll see if you look up the details, but do that before accepting everything here. Anyway, this article is a comparison between LLU in Ireland and Spain, and has nothing really to do with Argentina.
1 On September 25, 2006 at 22:09, Damien Mulley wrote:
You’d need a regulator that knows how to fine people so. ComReg have never fined a telco. Ever.
2 On September 25, 2006 at 22:19, Damien Mulley wrote:
From the last Oireachtas Committee on communications meeting:
Deputy Broughan: How many times did ComReg use the existing penalties to fine Eircom? How many times was the ?3,000 fine levied? Was it ever levied?
Mr. Doherty: It has never been levied. The objective was to move the process forward. We want to try and work with the industry in terms of local loop unbundling, LLU. We now have ten times as much as we had a year ago. At the same time we also have milestones which give potential for further provision of local loop unbundling. I see no reason we will not meet those targets, as we are doing currently.
3 On September 25, 2006 at 23:56, Keith wrote:
Sigh. Yeah, I know.![[sad]](/images/smilies/sad.gif)
4 On September 17, 2007 at 10:01, Fernando Cassia wrote:
You say “your article has nothing to do with Argentina”. Oh really? Well, gee, it does!.
You detail how Spain’s government forced Telefonica to accept Local Loop Unbundling. And guess what company operates the local loop monopoly in Argentina? gee, Telefonica de Argentina, a subsidiary of Telefonica de Espa?a, that is, Spain’s Telefonica !!!
You did a great work with that post... my mind is spinning in trying to grasp what made you write that disclaimer...