Eircom takes legal challenge over ComReg USP decision

Eircom claims a requirement by the communications regulator that it must shoulder the burden of providing fixed phone line connections is unfair.

The telecommunications company has brought a legal challenge against ComReg’s decision extending Eircom’s designation as ‘universal service provider’ (USP) without first carrying out a review of whether such a designation is necessary.

Eircom claims the decision is flawed and imposes on the company obligations for which no appropriate justification has been advanced.

It says the requirement that it apply “geographically averaged” prices — meaning the charge for connections in rural areas is the same as in urban areas even though the former is more expensive — can distort the market and eircom’s competitive position.

Mr Justice Brian McGovern yesterday granted an application from Maurice Collins SC, for Eircom, to admit its appeal against the ComReg USP extension to the Commercial Court list.

Patrick Galvin, Eircom’s director of regulatory and public affairs, said in an affidavit that ComrReg’s decision to extend the company USP designation was done despite ComReg’s view that it wish to re-examine the designation in light of the effects of technological development and government initiatives such as the national broadband and rural broadband schemes.

Eircom has been an USP since before 2003, and while it recognises the social benefits universal service brings, it is at a significant cost to the company. ComReg calculated the net cost for the years 2008-2010 was €5.1m and while the USP regulations provide for compensation, this was refused on the basis that ComReg believe this did not impose an unfair burden, Mr Galvin says.

Eircom says the extension of USP obligations was an invalid exercise of Comreg’s powers insofar as it failed to consider a number of matters including whether any other company could be designated as a USP or whether or not there is in fact any need for such a designation, Mr Galvin says. He says no adequate or meaningful analysis or review was conducted by ComReg prior to its decision.

Eircom has been placed in an invidious position where it is subjected, following “a very defective process”, to meet reasonable requests for connections under conditions that it either cannot meet or which will lead to likely wasted investment or both, he says. It takes no account of ongoing market developments or the “unprecedented damage” to Eircom’s network by “exceptional weather events of the 2013/14 winter”.

He says it is “unconscionable” that Eircom should have to continue to bear the burden of obligations which ComReg has acknowledged must be reviewed but which Comreg has failed to do.


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