Regulation of New Economy Markets: the Case of Wired Residential Internet Service Provision

The ISP market in Ireland is relatively immature. Although Ireland’s first Service Provider IEUnet was established in 1991, it is only in the last two or three years that a choice of provider and access price points has emerged under the regulatory regime of the Office of the Director of Telecommunications Regulation (OTDR). This has been achieved through the introduction of a telecommunications licensing regime by the ODTR, the specifics of which are available from the ODTR website.2 From a position where there was only one telecommunications operator, the former PTO3 namely Eircom, there are currently 77 other licensed operators (OLOs) in the State. The regulation imposes on ISPs that provide the initial connection to the Internet the need to obtain a licence. ISPs that provide portal sites and search engines but not the telecommunication access to the user - like international companies Yahoo and Alta Vista, or Irish companies like Ireland.com - are not required to obtain a telecommunications licence. This form of ISP provides services after the initial connection to the Internet is made. The ISPs under investigation here are those that supply the initial physical connection to the Internet as well as access to the World Wide Web. This level of Internet connectivity constitutes a telecommunications service and thus an operator requires a telecommunications licence.4 We further focus on the market specifically for residential Internet service provision.