Three days after the High Court accused the telecommunications regulator of "objective bias" and overturned her awarding of the third mobile licence to Meteor, Ms Etain Doyle's team is said to be desperately searching for a way out of the debacle. But while the regulator still has several options, the most elegant solution may be beyond her direct control.

After the initial statement that the Office of the Director of Telecommunications Regulation (ODTR) intended to appeal the decision to the Supreme Court, Ms Doyle's office appears to have rolled back from this option. A spokeswoman said yesterday no decision had been made on the next step.

The main problem with an appeal is the time it would take, and that if the Regulator lost, it would be back in the same situation as now, only six months later.

The problems with the options that do not involve an appeal are that they would all require some element of co-operation from the two parties, Orange and Meteor.

Meteor has already said it would be happy to submit supplementary documents, effectively bringing its bid up to date for a reevaluation procedure. Orange, on the other hand, has not given any such commitment - and could argue that it would be supplying documents to an office already proven to have shown bias against it.

A strict interpretation of the judgment could leave the regulator not only having to re-evaluate the bids as they are, but also having to put out of her mind any pertinent developments in the marketplace over the intervening 18 months.

But Ms Doyle has one last option. She could summon the two companies to her office and ask for their most reasonable proposal. With the total legal bill now ratcheted up to around £9 million (€11.5 million), and the delay costing the eventual winner much more in lost revenue, they will know that further legal action is likely to deliver only pyrrhic victories.

Both bidding teams are made up of experienced telecommunications industry negotiators, and already operate licences as joint ventures with other companies elsewhere. If they were to offer to share the licence, Ms Doyle could well decide that such an arrangement would be more beneficial to the consumer than many more months of legal argument during which no third service would be available.

So far, the Government has steered well away from the wrangle. A spokesman for the Minister for Public Enterprise, Ms O'Rourke, said that as Ms Doyle indicated she was considering further legal action, it would not be appropriate for the Government to comment.

But aside from the judgment and possible future legal actions, the Government must be somewhat embarrassed that the structures it put in place for the delivery of a third mobile licence have apparently delayed rather than brought forward more competition.

The Office of the Director of Telecommunications Regulation is the first major industry regulator to be put in place, and the awarding of the third mobile phone licence was her first major task. Instead of 40,000 new customers chatting happily on their new mobiles, the procedure to date - of which the appeal to the High Court is a part - has taken so long that the original submissions are now to some extent out of date.

Even in her judgment, Ms Justice Macken was critical of the rules under which the regulator was obliged to issue the licence.

"Another feature which is important to bear in mind in the context of this judgment is the actual scope of the appeal provided for by the statutory scheme by which the decision of the director is to be made. This provides only for an appeal against the refusal of the director to grant a licence," Ms Justice Macken said. "This has the effect of limiting the Court as to the extent to which the Court can come to findings which might otherwise be available to it in a statutory appeal which was broader than this."

The rules said the Court could not substitute its own judgment for that of the Regulator, the judge added, but was entitled only to refer the matter back to Ms Doyle.

"This may well be an unsatisfactory state of affairs, but is nevertheless what the statutory scheme provides for," Ms Justice Macken said.

Earlier in her judgment, she pointed out that neither the relevant law - the Telecommunications Act, 1983 - nor earlier court rulings "gave any assistance" to the Court as to the scope of an appeal.

The problem for the Government is that a mobile phone licence, because of the nature of the telecommunications industry, is not the same as, for example, a mining licence.

First, the pace of technological change can render proposals made 18 months ago outmoded to the point of redundancy. Second, the demand for mobile phone service is ultimately limited by the population within the licence area, and the delay has helped Eircell and Esat Digifone consolidate their market positions.

Penetration has risen from around 17 per cent to more than 28 per cent, and it would have been easier for any company to attract these people as new customers rather than try to persuade them to switch later. Meteor said that had it begun its service as planned on St Patrick's Day 1999, it would now have at least 40,000 subscribers and revenues of around £50 million (€64 million).

In other words, the very process of applying for and being awarded a licence can be so drawn out as to devalue commercially the licence itself. This could leave the new licence, with less capital to invest in better services, or offer lower prices to the consumer.

This effect is precisely the contrary of that intended by the Government.