Eircom secures court stay on cost cuts

Eircom has secured a High Court stay on a decision by the Commission for Communications Regulation (ComReg) to cut the cost which Eircom charges other firms to use its local access network.

The stay was granted by the president of the High Court, Mr Justice Finnegan, after Mr Paul Gallagher SC, for Eircom, gave an undertaking that if Eircom fails in its forthcoming challenge to the reduction in charges, it would reimburse all those who had in the interim paid amounts over and above the charges set out in a directive of ComReg which was to have come into effect this week.

Eircom claims ComReg's decision will cost it "tens of millions of euro" in future revenues. A separate direction from ComReg on partial private circuits, which was taken within hours of its decision on the access network, will mean €3 million in lost revenue to the company annually.

Eircom claims the decision means it will have to rent its local access network to rivals below cost and, as a consequence, all prices across wholesale and retail services would be distorted.

Yesterday, Mr Gallagher secured leave to challenge ComReg's decision in judicial review proceedings. He also secured the stay on the pricing decisions which applies pending ComReg's decision on whether to challenge the stay at an early stage or press for an early hearing of the main action which would determine all the issues. The matter will be heard in court on June 23rd and last night ComReg said it would vigorously defend its decision.

The application for leave was grounded on an affidavit of Mr David McRedmond, commercial director of Eircom, who said the company had been involved in substantial discussions with ComReg regarding the implementation of an EC Regulation to facilitate the unbundling of the "local loop" - the last mile of its telecommunications network which enters every Irish home.

He said the discussions between Eircom and ComReg were terminated by the issuing of a decision notice by ComReg on May 28th last fixing the charges which Eircom was to levy for access to the local loop.

Mr McRedmond said ComReg had claimed that, during the discussion process between Eircom and the regulatory body, there had been significant delays and a failure by Eircom to provide reasonable, consistent and timely information. Eircom refuted those allegations "in the strongest possible terms".

He said decisions of ComReg were invalid in that they failed to allow Eircom recover its appropriate costs.