Eircom forced to reduce charges for broadband competitors

EIRCOM is being forced to reduce its charges to competitors for broadband lines in a move that is expected to help improve the country’s poor internet coverage.

ComReg, the national regulator, has got the go- ahead from the European Commission to bring in new rules obliging Eircom to cut the fees it charges other telecom companies and to give them greater access to lines.

This should increase competition, cut costs to consumers and ensure a greater take-up of services throughout the country.

Broadband penetration at 20% is less than the EU average of 22% and well behind leaders Denmark and The Netherlands at around 37%.

Eircom, despite years of open market, has over 50% of Irish business while its nearest competitor UPC has just 13%.

Ireland has also been rated as just about able to keep up with the internet speeds necessary for the modern world, according to a major report published yesterday that shows accessing the internet by mobile phone is now faster than by landline.

ComReg’s move was praised by the commissioners in charge of Competition and Telecoms.

Competition Commissioner Neelie Kroes said: “ComReg’s proposal is good news for competitors and consumers. Due to the proposed regulatory measure, alternative operators will pay less for access to Eircom’s network, so they will be able to provide more attractive retail offers. As a result, competition will increase and consumers will have greater choice and better prices.”

Under the new rules Eircom will have to significantly reduce the fee paid by operators for access to the last mile of Eircom’s phone or internet lines – known as the local loop – and so allow competitors to provide broadband directly to customers.

This price reduction would prevent Eircom charging operators for costs they would not actually incur in areas where lines are not accessed by other operators due to limited economic viability.

The wholesale cost of the lines would be cut by between 40% and 50% and they build on ComReg’s moves last June that lowered Eircom’s prices to competitors for allowing them access to its broadband network and for moving customers between different wholesale broadband products.

EU Telecoms Commissioner Viviane Reding said: “I am right behind ComReg’s cost-oriented prices. In the short term, they will result in better prices for consumers and boost competition in the long term so that consumers also benefit from a wider range of services.

“ComReg is doing good service to competition in Ireland’s high speed broadband internet by promoting direct investment in infrastructure.”