[IT]ComReg blocks Eircom fee increase

viking

ComReg blocks Eircom fee increase
Jamie Smyth, Technology Reporter

Eircom will not be allowed to increase the price of telephone line rental next year, the Commission for Communication Regulation (ComReg) said yesterday.

The company may also face the imposition of a regulatory price cap on its retail line rental service, according to Ms Isolde Goggin, ComReg's chairwoman.

In an interview with The Irish Times, Ms Goggin said the commission believed that Eircom's monthly fee for telephone lines was already high enough to recover its own costs.

A further increase in line rental is not justified, she added.

She said ComReg was currently considering imposing a special sub cap on Eircom's retail line rental prices early in the new year.

ComReg's views on the cap are contained in a consultation document which proposes either freezing line rental at its current price or allowing Eircom to increase it in line with inflation.

Eircom currently charges consumers € 24.18 per month for line rental, the highest fee within the EU and almost €10 higher than the average European line price.

The firm typically applies to ComReg for a line rental price increase in January, which normally takes effect in February.

But Eircom's decision to raise line rental prices for the third time in 12 months this February sparked a public outcry causing the previous Minister for Communications, Mr Dermot Ahern, to issue directions to ComReg.

The policy directions told ComReg to force Eircom to offer wholesale line rental to competitors, a process whereby rivals offer line rental to customers.

They also asked ComReg to consider setting a specific price cap on Eircom's line rental prices to protect consumers.

Ms Goggin confirmed yesterday that ComReg was firmly against allowing Eircom to hike the price of line rental any further.

She also said that ComReg would issue a decision shortly on setting a line rental price cap.

Eircom refused to comment on the issue of line rental prices.

Meanwhile, Ms Goggin said that the commission had no objection to telecoms firms supplying digital television services over ordinary copper phone lines.

She said ComReg expected to see more advanced types of broadband technology in the new year.

© The Irish Times

Paddy20

Yes, yes, nice one Jamie Smyth of The Irish Times, and thanks for posting this thread Viking you have made my day.

Good start to the week.

P.

damien

I think there was something about this in the Sunday Business Post on the 14/11/2004 though I can't find it in the archives.

Mr_Man

In the same section of the paper there was more bad news for Eircom, although they don't present it that way. They are announcing the launch of a VoIP service from the start of next year, in response to EsatBT's offering. It will be late in the year before this service is rolled out to consumers as they are initially focusing on the business sector.

This is bad news because it will further cut into eircom's traditional call reveune and while they will get some income from the new service it is likely to be much less than they would get from normal phone calls.

M.

LFCFan

if and when €ircon increase line rental, will they be allowed to increase the wholesale price? ie. will €ircon line rental increases affect line rental from other Telcos? If not then they can increase all they like as it will only lead to more people moving to another operator. Typical again of Irish companies. They respond to competition by increasing prices

eircomtribunal

The company may also face the imposition of a regulatory price cap on its retail line rental service, according to Ms Isolde Goggin, ComReg's chairwoman.

In an interview with The Irish Times, Ms Goggin said the commission believed that Eircom's monthly fee for telephone lines was already high enough to recover its own costs.

A further increase in line rental is not justified, she added.

Where is the justification for Goggin's statement? ComReg allowed Eircom the line rental hike, by falsely using the pretext of keeping the lower quartile bill payer protected by means of the Vulnerable User Scheme, arguing Eircom needed the high price to sustain its network. We were never shown any evidence about the costing.

Now Goggin says the present line rental is sufficient (not too high and not too low) for Eircom. Where is the justification.

Or has it more to do with the DCMNR making clear that the politicians do not want to see another line rental hike?

She said ComReg was currently considering imposing a special sub cap on Eircom's retail line rental prices early in the new year.

The special sub cap was directed to ComReg by Ahern's March 2004 direction, in case the whole-sale-line rental product would not work.
I have seen the response of ComReg to the DCMNR about the splendid "success" of their WLR introduction – why would they then consider reintroducing the sub-cap?

ComReg's views on the cap are contained in a consultation document which proposes either freezing line rental at its current price or allowing Eircom to increase it in line with inflation.

Is this consultation out in the open, or have they just told Jamie?

But Eircom's decision to raise line rental prices for the third time in 12 months this February sparked a public outcry causing the previous Minister for Communications, Mr Dermot Ahern, to issue directions to ComReg.

The policy directions told ComReg to force Eircom to offer wholesale line rental to competitors, a process whereby rivals offer line rental to customers.

[Ahern's policy direction] also asked ComReg to consider setting a specific price cap on Eircom's line rental prices to protect consumers.

It did not. Only in the case the "much better" path of introducing WLR was not successful. Does the DCMNR and ComReg now believe the WLR is not the success they constantly make it to be?
P.