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IP/09/953

Brussels, 18 June 2009

Telecoms: Commission welcomes Irish regulator's move to support increased broadband competition in Ireland

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 and for migrating customers from one wholesale product to another. The proposed measures represent an important step towards facilitating direct investment in infrastructure and enhancing competition on the Irish broadband market.

"I fully support ComReg's proposal, as I am convinced that truly cost-oriented prices will be of great benefit to consumers." said EU Telecoms Commissioner Viviane Reding . "Broadband competition in Ireland is currently being held-up by the high access prices Eircom charges its competitors and the Irish regulator is now making very important efforts to foster competition by promoting direct investment in broadband infrastructure. This move will allow for greater flexibility and innovation in the provision of broadband internet services and ultimately lead to wider choice and lower prices for consumers."

EU Competition Commissioner Neelie Kroes said: "ComReg's proposal is good news for competition and consumers. Alternative operators will have to pay considerably less for access to Eircom's broadband network. They will thus be in a position to make more attractive retail offers and consumers will get a better choice."

Today the Commission approved regulatory measures proposed by the Irish regulator which oblige Eircom, the incumbent operator, to lower the prices charged for granting competitors access to its broadband network and for migrating customers between different wholesale broadband products.

In particular, Eircom has to significantly reduce its current Line Share Rental Price a fee paid by an alternative operator for accessing the last mile of Eircom's infrastructure (the "local loop") to provide broadband internet services to its own customers' homes or businesses. The purpose of this reduction is to avoid Eircom over-charging for certain "common" costs which are already being recouped through narrowband (voice) services provided over Eircom's local loop. Furthermore, ComReg believes there is no justification for Eircom to charge its current Intra Migration Premium the payment charged to its competitors when their consumers change from one service to another while staying with the same company . ComReg concludes that this migration premium shall therefore be abolished.

The Irish telecoms regulator considers that both the Line Share Rental Price and the Intra Migration Premium are excessive and run contrary to Eircom's obligation to charge cost-oriented prices. In today's letter, the Commission welcomed the price reductions proposed by the Irish Regulator, as an appropriate means to facilitate and foster infrastructure-based broadband competition so that consumers may enjoy lower prices and greater service choice.

Background:

The measures notified by ComReg 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 under the " Article 7 procedure ", of the EU telecoms rules' Framework Directive ( MEMO/08/620 ). 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 24 June 2009 at:

http://circa.europa.eu/Public/irc/infso/ecctf/library?I=/commissiondecisions

Annex

Figures and graphics available in PDF and WORD PROCESSED


Source: ComReg, Irish Communications Market, Quarterly Key Data Report, Q1 2009

Ireland's position in the European broadband league

Figures and graphics available in PDF and WORD PROCESSED


Source: European Commission, 14 th Report on the Implementation of the Telecommunications Regulatory Package – 2008


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