NTL's exit from the residential telecoms market this week is not the type of start the new Commission for Communications Regulation would have wished for. Already buffeted by the collapse of residential provider Spirit Telecom last year, it now oversees just a handful of operators in the market.

Clearly, competition in the telecoms sector has been savaged over recent years as capital flees the market and a newly privatised Eircom flexes its muscles to protect its near-monopoly position.

Valentia's Eircom holds 90 per cent of the residential market and looks unassailable. Unsurprisingly, consumers will experience a price rise in the New Year, after several years of cuts.

The commission faces many problems including an unwillingness by Eircom to enable competitors offer cheap flat-rate internet access and the challenge of ensuring it abides by price rules.

In the current environment, it must be seen to take a tougher line with the incumbent and promote competition to encourage other firms that the Republic is a location worth doing business in. Its recent investigation into "off book pricing" by Eircom proved the firm had offered customers illegal rates. Acting quickly to prevent this happening was one thing, but penalising the firm would surely do more to encourage compliance.

The interest that the new Minister for Communications, Mr Ahern, has shown in the sector should be welcomed. But the Government must also practise what it preaches. Delays in publicly funded fibre networks will not encourage the sector and its own procurement policy is likely to decimate competition.