ComReg backs down in LLU fight with Eircom

27 Aug 2008

Financial costs, the burden of resources and the length of time a court case would take have been cited by the Commission for Communications Regulation (ComReg) as the reasons it won’t fight an appeal by Eircom against its decision to reduce local loop unbundling (LLU) wholesale prices.

In June, ComReg directed Eircom to reduce the wholesale price it charges other operators for LLU line share from €8.41 a month to €2.94 per month.

The aim was to have the price cut in place for a year to analyse the effect it would have on the marketplace.

However, in July Eircom appealed this decision in the High Court.

Yesterday, ComReg said that it considered the financial cost of the appeal process, the likely burden such a case would have on ComReg’s own resources and the probability that a judgement would not be delivered until well into 2009, so it decided against contesting Eircom in court.

“ComReg regrets Eircom’s decision to appeal and has decided that it must now act in the most practical and expeditious manner available to it and try to minimise the level of uncertainty in the marketplace arising from Eircom’s appeal.”

ComReg says that in the meantime a detailed expert analysis into LLU line share will enable it to propose a specific and substantive price to the market in place of the original benchmark price it proposed.

As a result, the decision to reduce LLU line share down to €2.94 has been permanently shelved.

The news has been greeted with dismay by independent licensed business Telco Magnet, which described the original directive to reduce line share pricing as a progressive step by ComReg and indicated a willingness to take a more forceful line against Eircom’s anti-competitive pricing. 

Magnet chief executive Mark Kellett said he was extremely disappointed that ComReg felt it necessary to back down in light of Eircom’s legal action.

“Eircom has once again shown that they will use any and all means to protect their monopoly position in the market. Struggling under €4bn of debt ,the company’s sole objective is to protect its cash flows from its legacy product suite.

“Eircom clearly do not want competition and as a consequence are frustrating Ireland Inc’s desire to move with the rest of the developed world to have a digital economy,” he said.

“Despite the anti-competitive pricing of LLU services by Eircom, Magnet has successfully launched innovative voice and data business services and high-speed, dedicated broadband over its LLU infrastructure.

“These services bring real benefits to our customers and allow them to benefit from modern telecom services — these services are not and never will be available from Eircom,” Kellett said.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years