Consumer hopes dashed for cheaper broadband
Consumers hoping for cheaper broadband internet access were dealt a blow yesterday after the telecoms regulator backtracked on a decision to impose price cuts on Eircom.
Comreg, the watchdog responsible for overseeing the telecoms industry here, has reversed a price cut it told the former State-owned company to introduce in June.
That price reduction would have seen the price Eircom is allowed to charge competitors for sharing its lines slashed from €8.41 a month to €2.94, and the savings could ultimately have been passed on to consumers.
The line-share cost in Ireland is the highest among the original 15 EU member states.
Other operators had expected the price cut to boost competition and result in faster broadband speeds at cheaper prices being introduced to consumers and business users.
But Eircom challenged the move in the High Court and Comreg said yesterday it would be too expensive to defend the action. The watchdog described Eircom's actions as "very regrettable".
Dermot Jewell, chief executive of the Consumers' Association of Ireland, has called on the European Commission to intervene if necessary.
"Comreg is being frustrated by one provider just because it's in a position to do so," he said. "There are other players out there ready to roll up their sleeves and get competitive and this is just another stumbling block for them."
Industry insiders said that Comreg could have faced a legal bill of between €500,000 and €1m for defending the action by Eircom, and that if it lost the case it could also have had to stump up a significant amount of money to pay Eircom's costs.
Competitors also lashed out yesterday, saying that consumers have again lost out because of Eircom's move to protect itself.
"Eircom has once again shown that it will use any and all means to protect its monopoly position in the market," said Magnet Networks chief executive Mark Kellett.
Eircom has defended its High Court challenge and said that Comreg should have waited until the formal review process was complete.
The telecoms firm could also challenge any further decision by Comreg, meaning consumers could be left waiting even longer for the anticipated price reductions for broadband services.