BUSINESS OPINION/John McManus: The shilly-shallying by Vodafone over whether to take up its third generation (3G) mobile phone licence is yet another manifestation of the ineptitude that passes for the Government's communications policy.
Something must be seriously wrong if the largest mobile phone company in the State has doubts about whether it wants to be involved in the Government's plan for developing a mobile telecommunications infrastructure.
Given that Vodafone makes more money out of its customers in Ireland than just about anywhere else in the world, the problem is not the money.
The issue seems to be that the company is unhappy with the terms of the licence and in particular the penalties that it will incur if it does not meet its commitments.
The problem is that the Government's plans are badly delayed and don't reflect the current reality.
In the couple of years since the licences were first mooted, 3G has gone from being the next big thing to a candidate for also-ran status in the technology stakes. The reason for the delay was an internal wrangle involving several Government departments and the telecommunications regulator over what price should be charged for the licences.
Vodafone would now appear to be having very serious doubts about whether the whole project - as proposed by the Government - makes financial sense.
It is hard to believe it will pull out of the process, but it does seem pretty determined to either bluff or bully the Government into letting it renegotiate the terms of itslicence.
Either way, it is a pathetic state of affairs for a State that has very public aspirations of being at the forefront of technological advancement.
This ambition is beginning to seem more and more like a bad joke and like most worthwhile long-term projects it has been sacrificed on the altar of political expediency.
If you want a concrete example of this take a look at the recently passed Communications Bill which dealt with, among other issues, the sort of fines that can be levied on telecommunications companies by the new Commission for Communications Regulation. This body will be responsible for ensuring Government communications policy is implemented and the need for a powerful regulator has to be balanced against the need for a pro-enterprise environment.
You can get a sense from correspondence released under the Freedom of Information Act of the sort of parish pump politics that underlay the Government's approach to this critical challenge. One letter to the Minister for Public Enterprise - from the Chambers of Commerce last April - welcomed the stiff fines proposed in the draft legislation while warning against diluting them in the final legislation.
Another letter - from the Telecommunications and Internet Federation (TIF) - expressed reservations about the proposed penalties which it claimed could be disproportionate.
The then Minister, Ms O'Rourke, replied to both letters. She wrote to the Chambers of Commerce happly taking credit for the proposed fines saying it "brings the penalties for breaches of regulatory obligations in the communications sector into line with the penalties laid down in the Competition Act for breaches of competition law".
The TIF was told not to worry, minor breaches would not be prosecuted and that in any case it was up to the courts and not the regulator to decide what sort of of penalty would be imposed.
BOTH the Chambers of Commerce and the TIF were informed that "the enforcement provision of the Act represents a significantly enhanced enforcement mechanism which will enable the new Commission to enforce its regulatory decisions in today's rapidly evolving communications sector".
The truth of course was that the Government had dropped the ball entirely.
In reality, the new commission has less power than a dog warden. It does not have the ability to impose a fine and can only take criminal prosecutions which may or may not lead to the courts imposing a fine of up to €4 million or 10 per cent of turnover. For serious cases it has to rely on the already overstretched Director of Public Prosecutions to bring prosecutions on its behalf.
It was the perfect political fudge. The Government appears to be giving the Commission tough new powers to protect consumers while quietly hamstringing it to keep the telecommunications companies happy.
The Government argues that it would be unconstitutional to allow the Commission directly impose fines, but this argument does not hold much water, according to Etain Doyle, the Director of Telecommunications Regulation whose office will be subsumed into the Commission.
"If litter wardens can be entrusted with a power to levy on-the-spot fines, it is not clear why the future Electronic Communications Commission can not," she told the Department in a note released under the FOI Act.
"The ODTR would welcome the opportunity to discuss the issues in greater depth: even obtaining the same powers as a litter warden would be a significant breakthrough," she added.
Demot Ahern has now taken over the reins from Mary O'Rourke and hopefully the decision to give Communications the top billing in the name of his new Department heralds a more focused policy approach.
Integral to that should be a regulatory regime that has teeth and speedy action to restore credibility to the Government's plans to build a world class telecoms infrastructure.
That will take some time, but Mr Ahern could do worse than start by calling Vodafone's bluff over 3G.
