ComReg proposes subcap on line rental after successful "rebalancing".

eircomtribunal

ComReg proposes more line rental increase in a year's time. For the next year the line rental price should stay fixed at the current level, which was allowed in order to facilitate Eircom to "rebalance" its costs.

From ComReg's consultation on "Retailed fixed calls markets" from ComReg's website here

ComReg 05/26

6.92 The current price cap did not include a sub cap on line rental ( in order to facilitate rebalancing), now that rebalancing is complete it is necessary to constrain excessive increases for consumers in respect of line rental. To ensure that eircom does not raise line rentals in the absence of more significant reductions in call prices, in particular domestic calls, it may be appropriate to introduce a sub cap to limit flexibility in the pricing of particular services in the basket, notably PSTN line rental. In addition, to continuing with the current Price Cap Order, ComReg proposes to introduce an additional sub cap on PSTN line rental of CPI-CPI for a period of one year, effective from the date of the Decision, moving to a cap of CPI-0% in subsequent years where appropriate.

P.

hmmm

I've never understood why Comreg bundle line rental and call rates in determining value to consumers. Particularly when customers can move to different call providers, allowing Eircom to combine line rental and calls means that Eircom can subsidise the competitive call cost market via the monopolistic line rental market. Nuts.

Mr_Man

Isn't this what Dermo promised us all last year after competition failed to reduce the line rental charges as he had 'hoped' ?

Typical Comreg, as useful as a screen door on a submarine

M.

SkepticOne

One good thing about the wholsale line rental thing is that people now know that bringing in resellers (and calling this competition) does not solve problems for the consumer.

If it was any other industry people would have seen through this straight away. If bakery industry was dominated by one company who owned all the bakeries and produced only overpriced substandard bread, the solution would not be simply allowing others to repackage that bread and sell it as their own with a guaranteed profit margin. The bread will still be substandard and overpriced.

The reason it was brought in was lobbying from the OAOs. Like Eircom, these companies have their own interests and these interests are not necessarily those of the consumer.

A lot of people on this forum supported wholesale line rental I think because it was something that would hurt Eircom. All it really did was share out some the monopoly profits that formerly went purely to Eircom among a number of other companies.

eircomtribunal

SkepticOne wrote:

All it really did was share out some the monopoly profits that formerly went purely to Eircom among a number of other companies.

And ComReg agreed to compensate Eircom for the loss by granting them to hike our line rental to the highest in Europe.
Remember John Doherty's pathetic excuses on the Joe Duffy show?
Hear it from the horse's mouth:

"Even ComReg acknowledge that there was a need to rebalance the revenues between line rentals and calls and this was agreed with them in advance," said McRedmond speaking about the line rental increases.

From today's Charlie Taylor ENN article Eircom leashes out against ComReg

P

eircomtribunal

Mr_Man wrote:

Isn't this what Dermo promised us all last year after competition failed to reduce the line rental charges as he had 'hoped' ?
M.

Dermot said he would not go for a subcap, but do something much better, namely ask ComReg to introduce whole sale line rental instead – to bring in real competition and thus reduce line rental etc.

ComReg, in the required periodical response to the DCMNR on the matter, talked up their "successful" WLR introduction at no ends (I have seen their reports to the minister) – and ComReg still is talking up the WLR in the Quarterly Reports.

The way ComReg had introduced the WLR was flawed from the beginning and could never achieve more than make it a single billing vehicle – something the DCMNR direction had specifically said it should not be! It takes one hindrance out for people to go to another provider, but it is no whole sale line rental.

When Dempsey saw that another publicly damaging line rental hike was on the cards he will have made clear his position towards ComReg and early this year Goggin stated publicly that another line rental increase was not justifiable.

P.

LFCFan

has anyone successfully moved their line rental billing to another operator? UTV are still 'in the process' nearly 6 months later. Is this because UTV are idiots or is it a case of €ircon stalling again? What about ESAT, Smart etc?