ComReg rejects Eircom’s backdated funding request

3 Jul 2007

The Commission for Communications Regulation (ComReg) has turned down Eircom’s request to have funding for the provision of its universal service obligations (USO) backdated to 1999.

ComReg said it will begin assessing Eircom’s request for funding for USO only as far back as 1 April 2006.

The USO is the defined minimum set of telephone services that Eircom must provide the Irish nation. Eircom was designated the universal service provider for the State in July 2006 for a period of four years.

Under EU law, in cases where the universal service provider’s obligations give rise to a net cost that the company claims is an unfair burden, the member state concerned must finance the net cost.

In July 2006 Eircom was designated the universal service provider in the State for a period of four years.

After Eircom requested funding in February, ComReg issued a consultation on the matter that was responded to by BT, the Association of Licensed Telecoms Operators, O2 and Vodafone.

It is clear from ComReg’s response to Eircom’s request that any decision to backdate funds to support Eircom’s request would have a knock-on effect for other operators in terms of market competition and financial planning.

ComReg said that it would be unfair to those other operators since they would have made commercial decisions on the reasonable assumption that no such fund was to be in operation.

Vodafone warned that the creation of a retrospective fund for Eircom would dampen investment incentives while O2 said no operator would have made a provision for USO funding in its near-term financial planning. ALTO and BT are understood to have expressed similar views.

ALTO and BT submitted to ComReg that future request for funding should have a notice period of at least one financial year in advance.

ComReg said it is of the view that Eircom would submit requests for funding USO on an annual basis going forward.

The regulator said it will now commence and complete obtaining the necessary information from Eircom to assess its request for USO funding.

By John Kennedy