Eircom in court clash with Regulator over interconnection

The thorny issue of interconnect services is top of the telecommunications agenda next week with a court hearing on Monday for Eircom and the Office of the Director of Telecommunications Regulation (ODTR), and a potentially turbulent industry meeting of Internet service providers on Thursday.

Eircom and ODTR legal representatives will be in court for a hearing that will determine the direction for Eircom's lawsuit against the regulator's office. Eircom began proceedings on September 13th after the ODTR issued a decision notice on September 7th requiring changes to the interconnect services Eircom says it will provide to its competitors.

It is understood that Eircom is primarily disputing the process by which the notice was released, because it was given only 48 hours to respond to the 60-page decision notice. The notice ordered changes to Eircom's Reference Interconnect Offer (RIO), a document that lists the interconnect services Eircom provides to operators and service rates.

Eircom said in a statement that it was also disputing the decision on "substantive commercial, technical and legal grounds."

"The office is fully confident that the procedures the office follows are complete and sufficient," said an ODTR spokeswoman. Both the ODTR and Eircom would not comment specifically on the case as it is sub judice. The ODTR spokeswoman said current telecommunications regulations do not stipulate whether Eircom's proceedings will require a judicial review or a full hearing.

"The ODTR has applied to the court for direction," said the spokeswoman. This is the reason both parties will appear in court on Monday.

Interconnection is the term for the way in which one telecommunications provider links to another provider's system in order to complete a voice or data call. While many of Eircom's competitors are building their own telecommunications networks, most must use Eircom's existing networks as well, for which Eircom receives a payment known as an interconnect charge.

Eircom also pays interconnect charges to its competitors when calls terminate in their networks, as happens frequently with providers that are also Internet service providers.

As a consequence, interconnect charges have been a hotly-debated issue for ISPs as well. Irish ISPs have long complained that Eircom's interconnect charges are too high and make it difficult for them to operate efficiently.

They also say that Eircom's rates do not allow for an arrangement whereby ISPs can share in a more significant share of the full call charges paid by consumers to connect to their ISP.

Such a system is allowed in Britain and is considered directly responsible for the explosive growth of free access ISPs there. Eircom has countered that its interconnect charges are among the lowest in Europe.

To complicate the issue, in a separate directive to the decision Eircom is disputing, last July the ODTR radically revised the service and rates framework for ISPs. Under the new guidelines, the Regulator Ms Etain Doyle said she would allow for a range of Internet service provision packages, on a scale ranging from free Internet access to free telephone calls for Internet access.

In addition, she said ISPs could determine the telephone charge to consumers for providing Net access because the ISPs and not Eircom provide "the majority of value" in such calls.

Eircom, said the directive, is entitled to a nominal "base charge", which must be agreed upon by the various operators. According to sources, an initial late-summer meeting for this purpose achieved little. A second meeting is to be held next week. Some ISPs believe the industry remains too argumentative and self-focused.

"We haven't even all got together on agreeing that Ireland should be an e-commerce hub. How we're going to agree on interconnect charges and other issues is beyond me at the moment," said Indigo managing director Mr Mark Beggs.

After the ODTR released the July directive, many industry observers believed ISPs would prepare a new raft of Internet service offerings for consumers and businesses in the lead-up to the December holidays. The provisions of the ODTR's September decision notice have also been suspended pending the outcome of the Eircom court challenge.