ComReg slashes local loop costs by up to 50pc

23 Dec 2004

In a move that could invigorate the deployment of broadband in Ireland, the Commission for Communications Regulation (ComReg) has ordered reductions of up to 50pc in contentious local-loop unbundling (LLU) charges.

Unnecessarily high charges ranging from allowing engineers to simply visit a telephone exchange or install equipment there have long been a bone of contention between licensed telecom operators wishing to offer DSL services around the country and the incumbent operator Eircom whom they must pay.

LLU is the process whereby operators other than Eircom take control of the local copper loops that connect businesses and homes to the local exchange by renting them from Eircom in order to provide broadband and voice services to customers.

In a statement last night, ComReg said the range of reductions are part of a wide-ranging review of LLU products currently being conducted.

As part of its review, ComReg said it has instructed Eircom to amend its access reference offer with new prices to be effective from 1 February, 2005.

ComReg claimed that the new prices will result in significant reductions for other telecom operators, with the price of each connection falling by more than 50pc from €121.52 to €58.

This will fall again to €55 per connection once volumes of orders exceed 50,000 lines and to €49 per connection when more than 100,000 orders have been completed. The disconnection fee, which was €49.58 will now be €39.44 and will no longer apply in most cases.

ComReg said that recent European experience illustrates that the provision of broadband and new products such as voice-over internet protocol can significantly drive LLU take-up.

ComReg said it has been working closely with the industry on the issue and believes the new pricing ranges will provide the basis for significant growth.

ComReg’s move has been welcomed by lobby group IrelandOffline who in recent months voiced concern at how the range of costs for allowing telcos to access local exchanges as well as the lengthy legal process involved in unbundling local loops were holding back progress.

In a statement this morning IrelandOffline spokesman Damien Mulley commented: “IrelandOffline welcomes another positive step from ComReg in regards to LLU. We are concerned though that a significant number of charges still remain static and these need to be tackled in order to make LLU work. This charge reduction alone will not be the enabler for LLU uptake. “

Mulley pointed to a recent EU report in which concerns were raised about the LLU process in Ireland. “With just 2,500 lines out of a potential 1.7m unbundled, many see LLU as being a failure in Ireland. Across Europe those countries with competitive LLU pricing have been the ones to see the strongest rollout of broadband.

“IrelandOffline would like to see ComReg become more aggressive with their reviews of the LLU prices and to tackle each price as quickly as possible in order to bring Ireland on a par with the rest of the developed world,” Mulley said.

By John Kennedy