Eircom takes legal challenge against ‘unfair’ Comreg ruling

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 to 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 granted an application from Maurice Collins SC, for eircom, to fast-track its appeal against the Comreg USP extension in the Commercial Court.

Patrick Galvin, eircom's director of regulatory and and public affairs, said in an affidavit Comreg's decision to extend the company USP designation was done despite the regulator's view it wished 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 fully recognised the social benefits universal service brings, it is at a significant cost to the company, he said. Comreg calculated the net cost for the years 2008 -10 was €5.1 million and while the USP regulations provided for compensation, this was refused on the basis Comreg believed this did not impose an unfair burden.

Eircom claims the extension of USP obligations was an invalid exercise of Comreg’s powers on grounds alleging it failed to consider matters including whether any other company could be designated as a USP or whether there was in fact any need for such a designation.

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 it either cannot meet or which will lead to likely wasted investment or both, he saod. 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”.

It is “unconscionable” eircom should have to continue to bear the burden of obligations which Comreg has acknowledged must be reviewed when Comreg failed to do that, he said.