Wednesday 18 September 2019

Eir to pay €3m to settle High Court Comreg case

Eir's Carolan Lennon
Eir's Carolan Lennon
Adrian Weckler

Adrian Weckler

Eir will pay €3m to settle a High Court case brought by Ireland’s telecoms regulator, Comreg, about a lack of proper controls between the company’s various divisions.

Ireland’s largest telecoms operator has also agreed to place €9m in a special escrow account that Comreg can access if it breaks rules in future. And the firm will be subject to a new independent oversight body, the majority of whose members will be picked by Comreg.

The settlement relates to complaints that rival operators and Comreg have had for years over Eir favouring its own retail divisions when it comes to fixing faulty lines and getting new customers.

Because Eir owns all of the physical copper landlines, it is divided into two divisions. One (‘Open Eir’) controls the wholesale network that lays, maintains and fixes with infrastructure like lines and poles. The other side of the company is the retail division that sells services to customers. Under national law, Eir is supposed to give the same priority to customers and issues for competing retailers as it does its own retail division.

However, numerous complaints over the years have alleged that Eir has favoured its own retail division in different ways, from prioritising repairs to IT systems that favour the company’s own business.

Rival operators have moaned about the situation for many years, criticising Comreg for not acting speedily and thoroughly enough.

“The Commission for Communications Regulation has today reached a settlement with Eircom Limited in respect of certain compliance litigation which had been brought to the High Court,” said a Comreg statement.

“It has been agreed that Eircom will pay ComReg €3m in respect of the compliance litigation and certain open compliance cases. Eircom has also agreed to discontinue the High Court proceedings that it had issued which had challenged the validity of the legislation upon which ComReg’s compliance litigation had been based.

“As part of the agreement ComReg and Eircom have agreed a set of commitments which, when implemented, will result in the establishment and operation of an enhanced Regulatory Governance Model in Eircom. A number of the key RGM Undertakings will be underpinned by a cash amount of €9m placed in escrow which can be drawn down by ComReg in the event of a late or non-delivery of the performance milestones by Eircom.”

Eir has also agreed to “measures to remediate Eircom’s IT systems and associated controls to ensure that access to IT systems is appropriately governed”.

The company will also “increase the independence of its Wholesale arm from rest of Eircom’s business with increased transparency over internal decision making”.

Eir and Comreg have agreed to “the creation of an Independent Oversight Body with majority independent membership. This body will be charged inter alia with overseeing and assessing Eircom’s regulatory governance arrangements. The IOB will consist of five members, the majority of its members including its chairperson will be independent and appointed by ComReg with two further members appointed by Eircom from its board.”

Carolan Lennon, CEO of Eir, said: “We welcome today’s agreement and the settling of our outstanding legal issues with ComReg. This will allow us to concentrate on our key strategic plans, most importantly our ongoing investment of €1bn in our networks. While we have significantly enhanced our regulatory governance in recent years, with many of today’s provisions already in place, we appreciate the importance of transparency. We therefore welcome the further confidence that the independent oversight will give industry and ComReg that eir’s regulatory governance is robust and effective.”

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