Eircom has invested euro 125 million into the development of 'i-stream', which the telecoms provider describes as one of the most significant investments ever made in broadband access technology in Ireland targeted to suit heavy users of the Internet for both business and personal use.

However, the Office of the Director of Telecommunications Regulation (ODTR) has raised 'serious concerns' over the price at which Eircom was planning to charge other telecoms companies for using the network.

'Despite extensive contacts,' stated the ODTR, 'Eircom have failed to satisfy the Regulator that their proposed wholesale prices are cost orientated and non-discriminatory. The information supplied to date on the relationship between wholesale and retail pricing raises concerns about the conformity of the pricing with competition law.'

The ODTR has given Eircom certain directives urging the company to provide a 'concise, coherent and convincing analysis' of the price structure in order to justify its costliness. Eircom should have complied with the directives by close of business yesterday but over the weekend a spokesman defended the prices as 'fair and reasonable', saying that Eircom had already furnished the ODTR with all the necessary information and would not be revising any prices because he said they 'reflect the very substantial investment which we will be making in bringing broadband services to Ireland.'

In a statement released by the ODTR, Ms Doyle declared: 'The relationship between wholesale and retail rates appears inconsistent. The effect may be that other operators could not buy the wholesale product and use it to compete with Eircom. This could have very serious implications for the development of competition in the marketplace. It is up to Eircom to deal with this serious matter in accordance with directions issued.'

If Eircom is given the go ahead it has to wait at least three weeks before it can launch the 'i-stream' service, but the ODTR has not yet disclosed just what action it will take against Eircom if it fails to comply with the directives and is found in breach of its licence.

'While the ODTR welcomes every new product which increases the choice available to Irish users, the ODTR is required to ensure that the product is offered on a cost oriented and non-discriminatory basis. I have not yet been satisfied that this is the case,' said Ms Doyle.