ComReg cuts Eircom’s unbundling fees

29 May 2003

The Commission for Communications Regulation (ComReg) is to fix Eircom’s LLU (local loop unbundling) charges at €14.67 per month, over €2 lower than the current rate of €16.81 set last year and almost half the amount Eircom had proposed.

ComReg felt that Eircom’s proposal of an approximate 60pc increase in charges – from €16.81 to €27 – would seriously erode Ireland’s competitiveness in the key electronic communications sector and was unjustified. In a statement, ComReg said: “The rates proposed by Eircom would potentially place Ireland’s LLU charges at more than three times best international practice and 70pc above the next highest country. It potentially would have had significant price implications for retail line rental, increasing the level to well over €30 per month.”

Responding to the announcement, Tommy McCabe of the Telecommunications and Internet Federation (TIF) within IBEC said it was too early to say whether the decision would encourage investment in the local telephone network and lead to more broadband services being rolled out on top of that. He pointed out that a balance needs to be struck between encouraging investment in the local telecom networks which requires an adequate return on investment and providing effective service competition across all telecom platforms.

McCabe added that a period of consultation would follow within the TIF membership in response to the decision.

A spokesperson from Eircom was unavailable for comment.

The decision was reached after 13 months of deliberation by the Industry Advisory Group comprising Eircom, the other licensed operators and ComReg on the development of a model analysing bottom-up LRIC costs (long run incremental cost) in the access network. LRIC is the forward-looking approach based on current costs used as a basis for cost orientation in many EU countries.

“Businesses and citizens in this country must have access to an inexpensive, world-class communications infrastructure and a wide range of services,” said ComReg chairperson Etain Doyle (pictured), commenting on the decision. “Unbundling the local loop for other service providers is one method to bring about a substantial reduction in the costs of using the internet.”

By Brian Skelly