Cable and MMDS companies are to be offered licences with five years exclusivity in their areas of operation, under new terms being proposed by the Telecommunications Regulator. The move has already angered operators, some of whom are considering rejecting the offer. However, the regulator, Ms Etain Doyle, has urged them to accept the terms. She has written to cable operators asking them if they are prepared to surrender their existing licences and accept new ones, under certain conditions. Earlier this year, the regulator caused consternation in the industry when she indicated that the companies would no longer have monopolies in their areas of operation.
Now the regulator wants them to accept five years exclusivity - meaning that other TV delivery systems could compete in their areas after this period. It is understood that the operators are opposed to this because they believe it would not give them enough time to reap a return from the massive infrastructural investment needed.
Industry sources said the five-year period of exclusivity was too short and most operators believed a seven to ten-year period would be more realistic. One source also pointed out that the offer was for "within platform" exclusivity - it does rule out other operators using different technology entering that particular market.
The exclusivity clause will also be of vital interest to companies who are considering bidding for Cablelink. Estimates vary, but it is reckoned that the company will be worth around £150 million and will require a further £120 million to upgrade its services. Its ultimate price will depend on how quickly investors think they can make the money back. Obviously it would fetch a higher price if the exclusivity period was longer, say sources.
The licence will also require the companies to roll out digital services, which will be based on business plans which the operators were asked to submit to the regulator earlier this year. The licences can be revoked if the targets are not met.
It is understood that the regulator has asked cable operators to reply to her proposals by December 16th. If she does not hear from operators by this date she will take it that they are not prepared to accept the new licences, she has told them.
Existing licences would be surrendered not later than January 6th and the new ones granted the following day.
Ms Doyle has indicated that if operators do not agree to the proposal then claims of rights of exclusivity or renewal should be tested legally as quickly as possible.
However, it does not appear that the regulator has proposed to tackle the issue of illegal deflector groups. Several cable operators already have legal proceedings in train to sue the State over this issue, which they say has cost them huge amounts of money. A spokeswoman for the office of the director of telecommunications regulation (ODTR) last night confirmed that letters had been sent to the cable operators, outlining new licence terms, but said they had not been sent to the deflector groups.
Overall the new licences will be for 15 years, but after 11 years the regulator may review the licence, and renew it for a further five years, on her terms. If she decides not to renew the licence, the operator will be obliged to maintain the service until the licence expires in year 15. This condition has also angered some operators.
Another contentious issue in some quarters is the regulator's intention to determine the basis on how charges should be fixed.
The ODTR spokeswoman said that after "extensive consultation and review" the regulator "has set appropriate terms, having regard to the scale of investment required to give consumers access to high quality digital services in guaranteed time frames."
She said the director was urging companies to accept the new licensing proposals as she was "most anxious to turn her attention quickly to other platforms" so that consumers will have choice in respect of television delivery.
