€1.26m fine for defaulting on Eircom DSL deal

24 Mar 2003

Telcos that seek to provide bitstream ADSL access by availing of Eircom’s wholesale rates agreed recently with the Commission for Communications Regulation (ComReg) will face a liability of €1.26m if they default on any aspect of its access agreement with Eircom.

According to a lengthy 24-page standard agreement between Eircom and the access seeker (telco) for the provision of the ADSL (asymmetric digital subscriber line) bitstream service, a further liability of €2.53m could be imposed within a 12-month period.

However, Eircom itself, as part of the agreement with a telco, also would be liable to pay these sums if it is responsible for defaulting on the agreement.

The hefty 24-page agreement sets out strict terms for payment and the provision of services, setting down the access seeker’s responsibilities and Eircom’s responsibilities.

From the second week in April Eircom will be offering a consumer DSL service, following an agreement it signed with ComReg.

Under the agreement, Eircom, as the dominant player in the Irish market, will allow other telecoms firms to provide similar DSL service using Eircom’s infrastructure, paying a wholesale fee of €27 per month. Independent telcos will then have to set a fee on top of this that will allow them to achieve a margin for delivering the service.

An Eircom spokesperson told siliconrepublic.com that when it launches its ADSL bitstream service in April it will be available for €45 per month once additional costs and margins have been added.

However, Esat BT has complained that a once-off €150 connection charge for consumers is too high and is forcing them to hesitate in signing up for bitstream DSL on a wholesale basis. Esat BT’s product director Peter Evans contrasted the prices with the UK where residential users are being charged €20 per month for ADSL with a zero connection fee.

Evan’s added that on top of paying for modems and engineers to install the service Esat BT will also have to pay Eircom for backhaul to its own network in 2Mbps or 34Mbps circuits at an annual cost of €100,000.

Such costs, he warned, will be reflected in the charges for the bitstream service to consumers by independent telcos. “This is the dilemma we and the competitive landscape in Ireland face,” Evans told siliconrepublic.com last week.

By John Kennedy