Eircom Under Pressure To Offer Broadband Connections

by Jason Gorringe, Tax-News.com, London

28 June 2002

It seems that ex-monopoly telcos inevitably run into problems when (usually under duress) they offer broadband connections to competing operators who don't have extensive cabling of their own. And Ireland's legacy telco, Eircom, is no exception.

After finally resolving a long-running argument about broadband pricing last month, Telecoms Regulator Etian Doyle has now stepped in again to direct Eircom to allow other operators to interconnect to its network at additional network points of presence.

The Office of the Director of Telecommunications Regulation said on Thursday that this new form of interconnection will enable Other Licenced Operators (OLOs) to make more effective use of their network investment and interconnect more flexibility and economically.

Eircom offers services to other operators under a document known as the Reference Interconnection Offer (RIO), which amounts to a catalogue of the services that Eircom offers to other operators. Eircom's RIO is under constant review by the Regulator, prompted by a stream of complaints from OLOs about Eircom's behaviour.

Chairman of the Association of Licensed Telecom Operators, Iarla Flynn, said that the change would mean increased efficiencies and lower costs for operators. "OLOs have been looking for such a change for quite some time," commented Flynn to ElectricNews.Net. "Up until now, OLOs could only interconnect with Eircom's network at a limited number of switches. This ruling will mean that OLOs will now be able to interconnect with Eircom at an expanded number of points of presence, which will enable them to save money and be more efficient. These savings can then be passed on to consumers."

Regulator Etain Doyle has also decreed that all future changes to the RIO will have to be approved by him. "Eircom's RIO is a living document and will change with the requirements of the market," said Mr Doyle, in a statement. "I believe these decisions bring the Irish RIO into line with best EU practice and the version control will help improve the transparency of Eircom's RIO for other operators."

Other aspects of the RIO reviewed by the regulator included routing and capacity issues, billing and payments, management aspects of the RIO, new services, and service level agreements for interconnection links.

The long delay in rolling out high speed internet connections to the Irish residential and business market, which are only now being made available and which has caused Ireland to lag behind other EU countries, has resulted as much as anything from the high fees which the telecommunications giant proposed charging other firms for permission to resell the service to consumers.

Originally, Eircom had planned to charge 75 euros per month at the wholesale level for a broadband connection, far above comparable prices in other countries (BT for instance has just reduced its retail charge to about 50 euros per month). In April, Eircom Chief Executive Philip Nolan announced that a reduced price of 49 euros per month had been agreed with the regulator, and said that although the firm would have liked more, it would still make a return on its 125 million euros investment. But the firm said that retail charges for the new high speed connection for residential and business consumers would range from 89 euros to 169 euros per month (exclusive of VAT).

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