Wednesday 14 November 2018

Eir warns Comreg of legal action over 'unfair' USO costs

Carol Ann Lennon of Eir
Carol Ann Lennon of Eir

Adrian Weckler Technology Editor

Eir is threatening to sue the telecom regulator over what it calls the "unfair burden" of having to maintain rural telephone lines without State subvention.

The telecoms company believes that its traditional legal requirement - the Universal Service Obligation (USO) - to look after telecoms poles, lines and equipment in remote areas is outdated.

It feels that it should be compensated by the State for keeping such infrastructure active.

"Given the evolution of the telecoms industry, it is becoming increasingly unfair that Eir has to shoulder the significant financial burden of the USO without any support from the rest of the telecoms industry, who directly and indirectly benefit from eir's sole designation," said a spokesman.

"Eir would like to see the introduction of an industry-wide levy to cover the cost of uneconomic services, into which Eir would be the largest, but not the sole, contributor."

The operator - headed by chief executive Carolann Lennon - has also challenged Comreg by refusing to submit a costed estimate for its 2016-2017 USO service, saying that it's too expensive to do so and that Comreg needs to decide on previous years' USO costs first. Eir is unhappy with the regulator's draft decisions on previous years' USO determination and says that it will consider bringing Comreg to court.

The operator believes that Comreg is not fairly attributing the cost of having to keep remote, rural networks going when rival operators are then able to sell services without infrastructural subsidies.

"Eir will have to seriously consider challenging these decisions, up to and including challenging the decisions by legal means, in order to pursue its legitimate claim to be compensated fairly for the expenses it incurred in meeting the USO obligations which Comreg has imposed on Eir," said Kjeld Hartog, Eir's director of group pricing and regulatory finance, in a letter to Comreg's director of retail and consumer services, Barbara Nestor.

One bone of contention between the operator and the watchdog is that Eir is not allowed to include the costs of consultancy fees in its USO process.

It says that this is unfair because it is "extremely resource intensive, both in terms of time and cost".

Comreg has responded to Eir's legal threat by reminding the operator that it had previously agreed to submit its USO application on time and that it should not deviate from that now.

Irish Independent

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