Brussels, 2 October 2009
Telecoms: European Commission welcomes Irish steps to more broadband competition
The European Commission today endorsed the Irish regulator's (ComReg) proposal to lower the prices charged by Eircom, the incumbent telecoms operator, to its competitors for granting access to its network. From now on, Eircom will no longer charge competitors that use its lines for costs on lines they do not use. The proposed measures complement previous important steps towards facilitating investment in infrastructure and enhancing competition on the Irish broadband market.
"I am right behind ComReg's cost-oriented prices. In the short term, they will result in better prices for consumers, and boost competition in the long term so that consumers also benefit from a wider range of services," said EU Telecoms Commissioner Viviane Reding . "ComReg is doing good service to competition in Ireland's high speed broadband internet by promoting direct investment in infrastructure: investment that is crucial not only for Irish people to enjoy affordable and state-of-the-art access to the latest internet applications and services, but also for the Irish economy to remain competitive."
EU Competition Commissioner Neelie Kroes said: "ComReg's proposal is good news for competitors and consumers. Due to the proposed regulatory measure, alternative operators will pay less for access to Eircom's network, so they will be able to provide more attractive retail offers. As a result, competition will increase and consumers will have greater choice and better prices. "
The Commission today approved new rules proposed by the Irish telecoms regulator (ComReg) obliging Eircom, the incumbent operator, to lower the prices it charges competitors for access to its broadband network. This would make it easier for alternative operators to offer Irish internet consumers better prices and compete with Eircom.
ComReg wants Eircom to significantly reduce its current Full Unbundling (LLU) Rental Price – a fee paid by an alternative operator for access to the last mile of Eircom's phone or internet lines (the "local loop"). This process allows other operators to use Eircom's lines to provide broadband internet services to their own customers' homes or businesses. This price reduction would prevent Eircom charging other operators for costs they would actually not incur in areas where lines are not accessed by other operators due to limited economic viability. Although the Irish regulator believes that those areas should not be taken into account when setting the rental price operators pay to use Eircom's lines, it nevertheless take a small part of those lines into consideration when calculating prices in order to rule out under-pricing.
ComReg's new approach to setting the wholesale costs operators charge for use of their lines (the costing model) would reduce prices 2009-2012 to €12.24 per line per month for LLU and €10.38 per line per month for sub-loop-unbundling (SLU – a partial local loop connecting to the subscriber). Under the previous model, based on the cost of all lines, irrespective of whether they are unbundled or not, this would have cost €17.89 for LLU and €15.63 for SLU for the same period. These price cuts build on earlier moves in June 2009 by ComReg which lowered the prices charged by EirCom for granting competitors access to its broadband network and for migrating customers between different wholesale broadband products ( ).
In today's letter, the Commission welcomed the price reductions proposed by the Irish regulator as an appropriate means to foster infrastructure-based broadband competition so that consumers can enjoy lower prices and a greater choice of services.
The measures of which ComReg notified the Commission concern the obligation of cost-orientation imposed on Eircom under the first-round market review of the market for wholesale unbundled access to metallic loops and sub-loops in Ireland.
Today's Commission letter to ComReg was sent as part of the " ", of the EU telecoms rules' ( ). This procedure leaves considerable scope to national telecoms regulators on how to achieve effective competition, but requires them to notify draft regulatory measures to the Commission. For measures concerning market definitions and analyses of whether operators have significant market power, the Commission can require the regulator to withdraw the measure. For measures concerning regulatory remedies – as in the present case – the Commission may make comments which the national telecoms regulator should take into utmost account.
For further information:
The Commission's letter will be made available, in accordance with Community and national rules on business confidentiality, no later than 6 October 2009 at:
Source: ComReg, Irish Communications Market, Quarterly Key Data Report, Q2 2009
Ireland's position in the European broadband league
Source: European Commission, 14 th Report on the Implementation of the Telecommunications Regulatory Package – 2008