Eir appeals €10m burden of providing ‘essential’ services

Telco argues the the regulator has left it with an unfair burden

If the responsibility for a raft of “essential services” was shared by market share, Eir would be on the hook for about 41 per cent.

If the responsibility for a raft of “essential services” was shared by market share, Eir would be on the hook for about 41 per cent.

 

Eir is appealing a decision by the State’s telecommunications regulator which requires it, and none of its competitors, to spend about €10 million a year on providing a raft of “essential services”.

The telecommunications company has brought a High Court action against the Commissioner for Communications Regulation (ComReg) which rejected its request for funding support from its competitors to meet the €50 million costs incurred in providing a range of services between 2010 and 2015.

Some of those services include providing landline services to isolated households in the Republic, payphone services for those without mobile access and printed phone directories.

Eir has argued that “it is unfair that it alone shoulders the cost of providing this essential service”. It has asked ComReg to create a fund to ensure the costs of these services are shared across major operators according to their profitability and market share.

If the responsibility was shared by market share, Eir would be on the hook for about 41 per cent, given its share of fixed-line revenues. That suggests that it wants its competitors, including Vodafone, Sky Virgin Media and Three to share a cost of about €29.5 million between them. Eir says that ComReg has acknowledged that those companies “benefit from the connection of consumers to the Eir network”. But it adds: “ComReg has not accepted that all operators should pay their fair share for those benefits.”

‘Cynical ploy’

In response to the appeal, Alto, the industry grouping representing alternative operators to Eir, said: “We reject any position adopted by Eir that the industry should fund it further. ComReg’s findings of no unfair burden are clear and categorical. Any appeal by Eir is a cynical ploy to seek further rent from industry.

“There is no unfair burden on Eir and ComReg’s expert evidences underpins this statement in spades.”

Eir chief executive Carolan Lennon said: “Eir supports fully the goal of universal access to telecom services and the cohesion that this brings to society, particularly for the most isolated in society.

“The financial burden of supporting this goal is borne entirely by Eir, rather than being spread fairly across all of the telecoms operators, as is the case in other countries.”

In a statement, Eir suggested that it invests more in its infrastructure each year than all of its competitors combined. Ms Lennon added that the company’s main competitors, “which are multinational companies much larger and more profitable than Eir, should also contribute to the costs of meeting this essential service”.

ComReg declined to comment as the court process is ongoing but it previously said the cost of the scheme did not represent an unfair burden on Eir. The case is listed to come before the High Court on June 24th.