3 first to win appeal against ComReg ruling

The Republic's newest mobile operator has won the first appeal against a ruling by the communications regulator, ComReg, that could have allowed it to cap the company's prices.

ComReg last year ruled that Hutchison 3G Ireland, which runs a mobile network under the 3 brand, had an effective monopoly position in one part of the market, although the company had not at that point launched its service.

ComReg stated that Hutchison had "significant market power" to charge other operators for calls from their customers to subscribers on its network.

The ruling gave ComReg the power to cap Hutchison's charges to its competitors, or to monitor the company's accounts. Hutchison appealed the ruling to the recently established Electronic Appeals Panel (Ecap). It claimed that ComReg's analysis was faulty and argued that the regulator had made a number of errors in making its decision.

In a finding that criticises ComReg for failing to do a complete analysis of the market, Ecap yesterday upheld Hutchison's claim and annulled the regulator's original ruling. The appeal panel's findings are final.

At a hearing last July, Hutchison said ComReg based its ruling on the conclusion that the company had the sole power to determine charges to other operators for calls to its network.

Hutchison pointed out that the actual bargaining power rested with established players in the market, such as the dominant fixed-line player Eircom. It said that it could show that ComReg did not carry out a proper economic analysis of the market before arriving at its conclusion.

In its ruling, Ecap says that ComReg failed to take into account Hutchison's position as new entrant to the market before the regulator made its decision.

It also states that the analysis took no account of Hutchison's bargaining power against powerful players like Eircom.

"The decision lacks the thorough analysis required of key economic characteristics which is required before determining the existence of significant market power," Ecap's ruling states.

It also points out that the onus is on the regulator, when carrying out market analysis, to establish whether a business has significant market power.

"This means examining fully all the relevant factors. This was not done."

Hutchison's chief executive, Bob Fuller, welcomed the ruling yesterday. "It emphasises the importance of a comprehensive economic analysis in looking at market power issues," he said.

"This decision will allow 3 to concentrate its efforts on rolling out its services in Ireland."

This is the second ComReg ruling to be overturned in recent weeks.

The High Court recently ruled that a direction from the regulator governing how it opened up its exchanges to its competitors, effectively denied the company its right to appeal to Ecap. ComReg subsequently withdrew the direction.