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Eircom reaches an out-of-court settlement with Comreg on phone line universal service obligation


Commissioner for communications regulation, Kevin O'Brien. Pic. Mark Condren.

Commissioner for communications regulation, Kevin O'Brien. Pic. Mark Condren.

Commissioner for communications regulation, Kevin O'Brien. Pic. Mark Condren.

The telecoms regulator and Eircom have reached an out-of-court settlement over a High Court case about Eircom's responsibilities to provide telephone services nationally.

The operator had brought a legal challenge against Comreg's designation of it as a 'universal service operator' in July which required it to provide telephone services to any rural premises that asked for them.

Eircom had argued that the regulator had done this without a "proper review" of the modern telecoms environment and that the designation saddled it with unjustifiable extra costs.

It also argued that being forced to subsidise rural phone services by urban users' bills distorted its competitive position.

However, Eircom has withdrawn its High Court case after Comreg agreed to establish a "performance improvement programme" and initiate new industry consultations on the requirements of a universal service obligation in the first half of next year.

The settlement will also see Eircom provide refunds to customers who suffer outages for more than 10 working days and will include an unspecified "penalty payment" from Eircom for 'quality of performance' issues over the last two years.

Previously, the chairman of the telecoms regulator, Kevin O'Brien, has said that the universal service obligation is a "safety net" that is "required".

However, the regulator's recently published 'Strategy Statement for Electronics Communications 2014-2016' suggested that the USO could evolve over time.

"In respect of access at a fixed location, ComReg is mindful that the provision over time of high speed broadband to homes and businesses, including as a result of the National Broadband Plan, may mean that the requirement for the universal service of access at a fixed location could, in time, lessen and indeed become unnecessary," it says.

The Government's newly restated position on subsidised rural broadband rollout in coming years could affect the issue, according to Comreg.

The regulatory body says that it wants the universal service obligation to remain for at least another "three to five years", according to official documents.

It previously attributed attributed the cost of Eircom's USO activities for the last publicly noted period (2010) at €5.1m.

However, Eircom has intensified its argument that the current cost burden is unfair. It has argued that when customers build dwellings in very remote areas, it is obliged to cover up to €7,000 of the cost of the telephone poles and other equipment required to connect the user.

It also argues that it must then face the possibility of customers choosing rival services which are contractually allowed to sell services over the company's infrastructure.

Eircom is understood to be in favour of a shared 'USO fund' that would see rivals contribute to its USO costs,

"ComReg will continue its work on Universal Service Funding including the assessment of applications for funding it receives from the USP [Eircom] and the establishment of the principles for a universal service fund sharing mechanism as required," said the regulator.

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