IN 2001, the consumer lobby group IrelandOffline asked Eircom to create an affordable broadband product for businesses and consumers.

Five years on, Pierre Danon, Eircom’s chairman, invited us to discuss with him the issues that consumers and businesses face in Ireland when they attempt to get broadband.

Before now, when asked whether the government should split Eircom into wholesale and retail divisions, I said “yes” without hesitation. After meeting Danon, however, my view is changing.

A government or regulator usually threatens to split a telecoms company into wholesale and retail divisions because the company is unwilling to allow competitors fair access to its network.

European Union regulations state that telecoms companies such as Eircom have to give competitors fair access because they have significant market power, mostly because they were state-owned monopolies.

In Ireland, Eircom’s competitors want fair access to the “the last mile” of the network. This is the piece of copper that runs from your house or business to the local exchange. Accessing the last mile is known as local loop unbundling.

At the moment, Eircom has its equipment in the exchange, but competitors can also install their kit, which they connect to your line after compensating Eircom. Unfortunately, there are bottlenecks in the wait to access your line and Eircom has shown it is in no hurry to ease them.

If Eircom had separate wholesale and retail divisions, all telecoms companies, including Eircom Retail, would have the same access rights to the wholesale network. In theory this would speed up broadband roll-out and increase the number of new broadband products.

The split would also prompt Eircom wholesale constantly to improve its network to get more business, which would decrease line failure rates.

However, if the government and ComReg were to carry out a split against Eircom’s wishes, we could expect months, if not years, of appeals. All the while, Eircom’s competitors wouldn’t get the access they wanted and the lack of competition would hurt consumers.

It would be easier, therefore, if Eircom agrees to local loop unbundling and treats competitors with the respect that it shows its retail division. Whether this is done by creating

a separate wholesale company or by using the current structure isn’t as important as ensuring the access is fair to all.

This happened in the UK when British Telecom opened its network while remaining as one company. The result is that local loop unbundling has been a huge success there and the broadband market is thriving.

While Britain has turned into a broadband utopia, we are stuck in no man’s land. It is a positive sign, then, that Babcock & Brown — the owner-to-be of Eircom — has brought in Danon as chairman.

He was a senior executive in BT when it changed its attitude to broadband and, after hearing his progressive ideas on where he wants to take Eircom, I suspect splitting the group might not be necessary.

If Eircom were to open up its network, it would save a lot of expense and time. We are already four years behind most of Europe on broadband. We don’t need more delays.

Still, the government and ComReg must have the option of splitting Eircom should the new owners maintain the status quo. Let us hope Danon doesn’t allow that to happen.

Damien Mulley, chairman, IrelandOffline