Sky settles dispute with Comreg over Eircom broadband charges

Rule change allowed network owner Eircom charge rivals €170 when a customer switched

Comreg will begin consulting with telecoms companies early next year on the system it uses for calculating what Eircom – now trading as Eir – can charge rivals for using its network. Photograph: Alan Betson/The Irish Times

Comreg will begin consulting with telecoms companies early next year on the system it uses for calculating what Eircom – now trading as Eir – can charge rivals for using its network. Photograph: Alan Betson/The Irish Times

 

Sky Ireland and State communications regulator Comreg have settled a High Court dispute over wholesale broadband charges.

Comreg last year changed the rules governing how Eircom – now trading as Eir – charged other telecoms companies for using its network to sell their services to homes and businesses.

The changes allowed Eircom charge rivals such as Sky €170 every time a customer moved from one supplier to the other. Previously this had cost €2.50.

Sky challenged Comreg’s ruling, highlighting the switching charges amongst other issues, arguing that the regulator had made a series of mistakes when making the decision.

Comreg confirmed in an information note on Wednesday that the communications watchdog and Sky have settled the High Court action.

The regulator will begin consulting with telecoms companies early next year on the system it uses for calculating what Eircom can charge rivals for using its network.

Individual homes

Comreg will also consider the appropriate costs for fibre to the home, that is, the use of broadband connections to individual homes, and what Eircom charges others for customers switching from one supplier to the other.

Eircom owns most of the Republic’s telecoms network. Comreg regulates the wholesale charges it levies on competitors for using its equipment to supply their customers.

Kevin Barrins, Sky Ireland’s director of wholesale and regulatory strategy, welcomed the news that the parties settled “complex” matters.

“We are now entirely focused on constructive engagement with Comreg and other stakeholders, to address a number of the issues that were the subject of the proceedings,” he said.

Had Sky continued with the case and won its challenge, the court would have ordered Comreg to restart consultations with the industry.

The company warned that it could stymie competition as it would deter customers from moving from one service to another

As a result, the company agreed to settle once the regulator said that it would consult with the industry in the first quarter of 2020.

Since the original ruling in late 2018, Eircom has cut costs, including borrowing expenses, which are a factor in how Comreg allows the company calculate its charges.

Key issue

While it was one of several issues raised in court, the €170 charge for customers moving from one company to another was a key issue for Sky, which sells TV and broadband services in the Republic.

The company warned that it could stymie competition as it would deter customers from moving from one service to another.

Eircom charges the same sum for first-time broadband customers, but this is understood to cover the cost of providing a new connection to the network.

In court on Wednesday, Sky’s senior counsel, Michael Collins, told Mr Justice David Barniville that the pair had agreed terms and that the appeal brought by the company could be struck out.

Eircom and Vodafone were notice parties to the case. Vodafone said that it would bear its own costs while Eircom’s lawyers sought liberty to apply to the court for an order relating to that company’s costs later.

However, Mr Justice Barniville refused this and said that he would simply strike out the action without making any such orders.