Might broadband overlap with Eir’s fixed-line obligations?

Government’s plan effectively amounts to a universal service obligation for broadband

One of the problems with being a former State monopoly is legacy. Eir, for example, is obliged to provide a telephone line to every household and business in the country under the universal service obligation (USO).

As the dominant player in the market, it effectively drew the short straw in having to provide telephone services to end users at an affordable price. Doing so costs the company about €9 million a year – no small chunk of change considering its annual earnings are about €125 million.

The company wants Comreg to establish an industry-wide fund to alleviate some of the burden, a move that rivals are resisting. Eir contends it should not have to shoulder the entire cost of connecting every household, particularly when customers can opt for different service providers once connected.

Rivals say Eir has a near 70 per cent share of the fixed-line market and recoups part of connection cost via line rental charges. All of this could become something of a moot point with the roll-out of high-speed broadband across the State. The National Broadband Plan (NBP) is, in effect, a USO for broadband, albeit with the Government running a competitive tender and stumping up half the cost.

So what will happen to the USO for fixed-line services if the same homes are being connected to an operator other than Eir?

Central to the issue of USOs, whether broadband or fixed line, is cost, particularly when it comes to remote parts.

There has been consternation in the UK following a recent government announcement that it is not planning to automatically connect the final 5 per cent of homes to broadband. It said homes and businesses in very remote areas will need to request internet connections and will have to pay part or even most of the cost themselves.

Will the Government here have to row back on its national broadband plan in similar fashion, when the costs of connecting the final 5 per cent materialise?