Eircom agrees to cut broadband charges to its competitors

EIRCOM HAS ended a long-running dispute with the Communications Regulator by agreeing to slash the monthly charge to competitors for supplying broadband over its telephone lines.

Under the terms of a settlement announced yesterday, the monthly charge to other operators who wish to access Eircom lines will drop from €8.41 to €0.77.

Eircom had mounted a High Court challenge to an August 2009 direction from ComReg to introduce the price cut.

In a statement ComReg said the “proceedings were settled” yesterday but did not provide any details of the settlement.

Eircom’s move signals a shift in approach by its new majority owners STT, a subsidiary of Singapore’s sovereign wealth fund. The takeover by STT and Eircom’s Employee Share Ownership Trust (Esot) was confirmed last week with the appointment of a new board drawn from both groups.

A spokesman for Alto, which represents alternative operators in the Irish market, welcomed the withdrawal of Eircom’s legal challenge. “The decision to withdraw renews confidence in ComReg’s abilities to regulate the communications market in a fair and unbiased manner,” he said. “The decision, while overdue, is good for consumers and wholesale operators alike.”

The product covered by the agreement is known as Local Loop Unbundling (LLU) Line Share. It enables Eircom competitors to offer broadband over the incumbent’s phone lines even if another operator is providing the phone service.

Unlike wholesale services where Eircom provides the service which is simply resold by the other operator, LLU involves the other operator placing their equipment in Eircom telephone exchanges. While this requires a significant investment by operators, it gives them more control and allows them to offer services not being provided by Eircom.

BT Ireland, which is planning to unbundle 60 exchanges in a joint venture with Vodafone, also welcomed the move. “This development finally brings wholesale prices down to levels seen in the rest of Europe and builds a foundation for next generation broadband services,” said Peter Evans, product director with BT Ireland.

To date the line share product has not been much used by Irish operators. Other industry sources said this was due to the high price rather than a lack of demand.

In Britain pay TV operator BSkyB has been using line share extensively to offer a “triple play” of telephone, broadband and television. In the past its Irish subsidiary, Sky Ireland, said the pricing and regulation in the Irish market made it uneconomical to provide broadband to its Irish customers.

ComReg is due to shortly publish a pricing decision on full unbundling where the other operator takes full control of the telephone line from Eircom.