Line rental in rural areas could rise to €40 under new proposal

12 Nov 2012

Line rental for consumers in rural and suburban areas of Ireland could rise from €26 to €40 a month by 2014 if a proposal by Ireland’s telecoms regulator ComReg to allow Eircom to compete in selected urban areas is enacted, a lobby group has warned.

IrelandOffline said this morning that its analysis of ComReg document 12/63 indicates that ComReg’s proposal to allow Eircom to compete in selected urban areas could occur at the expense of rural users.

The proposal follows a consultation on price regulation of bundled offers.

Under the proposal, in select urban areas no line rental (currently at €26 per month) is to be paid by Eircom customers.

IrelandOffline argues this will lead to an inevitable rebalancing of the line rental pot and rural areas could end up making up the shortfall.

It warns that as a result, line rental in rural and some suburban areas could reach €40 a month by 2014 if the proposal is enacted.

Who’s gonna pick up the tab?

Eamonn Wallace, chairman of IrelandOffline, said: “We in IrelandOffline wonder what exactly this has to do with ‘bundled offers’. The ComReg analysis was conducted despite the complete lack of a Regulatory Impact Assessment of any sort whether beforehand or as part of the overall document.”

Wallace said that in the document, ComReg is attempting to define what it terms a “Larger Exchange Area”, a euphemism for urban areas and as such should be termed “Urban Area Exchanges”.

Wallace continued: “Tinkering around with regulatory details in urban areas will not alter anything. Compared to cable, Eircom no longer has a competitive copper-based product, no matter what the price.

“UPC will continue to eat Eircom’s lunch until Eircom introduces a fully fibre to-the-premises product that is capable of delivering true triple play and at least 100Mbps speeds and at a competitive price.

“In the meantime, it is not the job of hard-pressed rural customers to pay for the consequences of over a decade of bad regulation. ComReg should not force rural customers to pick up the tab for Eircom’s bondholders where Eircom’s urban customers are no longer prepared to pay exorbitant prices and have access to superior alternatives,” Wallace railed.

Last week, ComReg fined Eircom €520,000 for failing to meet certain targets agreed under its Universal Services Obligation (USO).

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