Etain Doyle, the Director of the Office of Telecommunications Regulation for the Republic could face legal challenges from the countries 15 cable companies over her proposal to end their monopolies and an assertion in "The Future of TV Transmission", a report recently issued from her office, that existing cable and MMDS licences do not authorise the carriage of digital services. The cable operators dispute this and say they will challenge the regulator in court if there are any amendments to their licences.
Doyle has asked the 15 cable companies to submit business plans and reasons why they should be granted new licences. She wants to introduce competing services in each geographical area and have access to all for digital services such as video on demand, fast internet and on-line shopping.
The sale of Cablelink the countries biggest cable operator could bring the matter to a head when its value is detailed in a document to be released to bidders within the next four weeks as it will bring up the status of all the cable companies licences and their worth. Analysts predict that the company could make £230 - £250 million balancing the cost of upgrading Cablelinks old cable network estimated to be a possible £150 million against very high penetration in the greater Dublin area of 330,000 subscribers valued at £1,000 per connected house (based on UK valuations). Also much of the value of Cablelink lies in the potential for its network to be used for telecommunications than the traditional TV channel business.
Cable and Microrave Multi-Directional System operators believe that Ms Doyle has overturned promises by successive governments relating to their business and Cablelink were furious that the announcement would devalue the company. Potential bidders want to know what they are buying and have confidence that the government will recognise their licences in the future.
Prior to her appointment and the setting up of the office of the regulator the industry was a mess, with litigation from Princes Holding, a subsidiary of Independent newspapers and Cable Management, seeking more than £80 million from the state in damages because it did not close unlicensed deflectors under their exclusivity of service clause and led to a payments to politicians inquiry. Cable Management Ireland, which has 65,000 customers on the periphery of Dublin is one of those putting together a bid for Cablelink. Although the cable contracts did not specify digital rights in the nod and wink world that existed before the setting up of her office the companies understood they would get digital rights.
The setting up of the office of the telecommunications regulator was a direct response to these shady dealings and the current treats seem to be more an attempt by the cable companies to salvage as much value as possible from their holdings before the competition moves in.
Michael McMahon 3/9/98
