Monday 24 November 2014

Rural broadband customers are facing €180 price hikes

Published 08/08/2014 | 02:30

The huge price rise is being imposed because a government subsidy designed to ensure basic broadband is available in isolated parts of the country is to be stopped
The huge price rise is being imposed because a government subsidy designed to ensure basic broadband is available in isolated parts of the country is to be stopped

The state-funded National Broadband Scheme was set up to service rural broadband 'blackspots, where Eircom phone lines could not deliver broadband services.

The expiration of the scheme's time period now leaves 3 Ireland with a virtual monopoly on broadband services in sizeable areas of rural Ireland.

The counties most affected are Galway, Mayo, Cork and Kerry, each of which have large geographical areas without any broadband other than the state-subsidised service.

Parts of Donegal, Clare, 
Tipperary and rural Limerick will also be significantly 
affected.

"The service level agreement including minimum service standards, orders and installation standards, fault restoration times, engineer visits and service rebates no longer apply," said the customer letter from 3 Ireland.

"Minimum speeds will no longer be guaranteed under your new plan. But rest assured that we'll always work to resolve any issue you have as quickly as possible… you shouldn't experience any change to your service."

The letter from the company also said that it was currently rolling out 4G mobile services across the country, although it declined to guarantee that the higher speed network would be rolled out to rural areas.

Under national law, the company is only obliged to cover 70pc of the population with 4G services.

The Government has promised to introduce a new National Broadband Plan which will build fibre broadband infrastructure to small towns and villages around the country, including some areas of the existing National Broadband Scheme.

The plan, details of which have yet to be finalised and submitted to the European Commission for approval, is unlikely to begin a roll-out until 2016 at the earliest. A parallel plan by the ESB and Vodafone for the roll out of fibre broadband will not provide services to rural Ireland.

3 Ireland recently got government and European clearance to buy rival mobile operator O2 Ireland in a deal worth more than €700m.

The company, which has yet to make a profit in Ireland, is devising new strategies at a return on its investment here, which measures more than €1bn in the past decade.

The new broadband price hikes come after fears of 
separate price rises in Eircom's rural broadband services following a recent ruling by the country's telecoms regulator ComReg.

Under the ruling, ComReg said that Eircom was subsidising the cost of its rural broadband services from returns on its urban infrastructure.

The watchdog said that rural internet users were not paying the full cost of broadband provision in parts of the country with around 600,000 homes and businesses.

This could open the door for Eircom to apply to the regulator to raise its rural broadband prices to recover costs associated with providing services outside of the main cities.

The move, which ComReg says complies with European law, would affect all operators seeking to resell broadband services on Eircom landlines. The regulator has conceded that Eircom had little competition in rural areas when it came to broadband infrastructure.

A spokesperson for newly appointed Communications Minister Alex White said that following the completion of the NBS scheme in accordance with the conditions of the EU Commission's State Aids approval, regulation of any service provider was a matter for ComReg.

Irish Independent

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