Eircom has been designated by the Commission for Communications Regulation (ComReg) as “dominant” in the provision of fixed line access services to end user, and has proposed putting a cap or freeze on both narrowband and broadband retail prices.
In recent weeks Eircom said it is to increase line rental to €25.36.
ComReg summed up its reasoning as “to ensure that prices for retail customers reflect efficient costs.”
It also said the move will give Eircom an incentive to deliver services as efficiently as possible.
ComReg added that price caps also protect consumers from excessive price increases.
The regulator has suggested a price freeze via individual price caps for lower and higher level access services should start at the end of September and remain in place for a full 12 months.
ComReg says the move will prevent prices for basic line rental and connections from rising above the level of inflation.
It also proposes that a price cap based on the rate of inflation remains in place following the 12 month period.
As well as this the regulator proposes a sub-cap on basic residential line rental within the overall basket cap and that this should last until September 2010.
“From September onwards for a period of 12 months Eircom will not be allowed to increase the price of line rental,” a ComReg spokesman told siliconrepublic.com. “We’ve come up with a new formula to calculate a reasonable cap on line rental.
“From next week Eircom’s line rental is to be increased to €25.36 including VAT.
“For the 12 months to September 2008 the price will stay at that and if there are to be increased they can only be increased in line with inflation,” the spokesman said.
By John Kennedy