Eir launches legal challenge against rural phone services duty

Company believes it should not be stuck with cost of uneconomic rural phone lines

Eir is challenging the law requiring it to provide rural phone services under the universal social obligation (USO).

The State’s largest telco believes it should no longer be saddled with cost of connecting uneconomic rural lines with the advent of broadband and mobile phone services.

The company plans to take regulator ComReg to court to have part of its USO designation relating to access at a fixed location overturned.

It is due to file a statement of claim with the High Court in the coming days, which will outline its arguments in more detail.


If successful, a major plank of universal service, designed to ensure every person can receive basic telecommunications services, no matter where they live, may become a thing of the past.

"Eir has lodged an appeal in the High Court as we believe Ireland no longer needs a universal service provider for voice services given the commercial rollout of fibre already delivered, future plans for fibre rollout and mobile services in place," the company said in a statement to The Irish Times.

ComReg declined to comment other than to say that it planned to publish an information note on the issue later in the week.

Under its USO, Eir is obliged to connect homes and businesses in rural areas up to a cost threshold of €7,000 after which the customer must cover part of the connection cost.

The USO also obliges Eir to provide phone boxes in remote locations, publish telephone directories and provide certain disability services, but these services are not thought to part of Eir’s legal challenge.

In July, the regulator re-designated Eir as the State’s universal social provider (USP) for another five years, a move that appears to have prompted the company’s legal challenge.

Ronan Lupton of Alto, the umbrella group for non-Eir firms, disputed Eir's assertion that the availability of broadband warranted the move away from USO and the company's specific USP designation, citing the 920,000 homes and businesses, which have been earmarked for state intervention under the National Broadband Plan.

He also highlighted that Eir’s obligations under the USO mandated the upkeep and repair of the existing telecoms network, claiming that Eir’s performance has been substandard.

Non-Eir companies – Sky, Vodafone, BT and Magnet which use Eir's network to deliver their own bundles – are in a separate dispute with the former semi-State over fault repair times, which they say are too long and fall below European industry norms, a claim the company rejects.

Eir has been lobbying ComReg to have the cost of providing rural phone services, which it estimates to be about €10 million a year, shared among providers.

To this end, it lodged a series of retrospective funding claims, dating back to 2010 and totalling €45 million, with the regulator.

Eir reclaims part of the connection costs via line rental charges but argues the overall costs should be shared among operators as customers can choose different service providers when connected.

ComReg has ruled against the first of these claims , while judgments on the others are still pending.

The European Commission is considering introducing a USO for broadband across member states as part of wider plans to revamp its digital agenda.

Minister for Communications Denis Naughten has already signalled his intention to consider introducing such a legal imperative here once the NBP is in place.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times