The European Commission has extended an investigation into Eircom's dominance of the local telecoms network. If found to have breached competition law, the company faces heavy fines.
At the centre of the Commission's investigation is Eircom's handling of the process to open its local network to competition. On Monday, the Commission asked rival operator Esat for full details of its negotiations with Eircom, including a schedule of the costs that Eircom proposes to charge for access to its local network. The Commission has also sought the licence conditions laid down by the incumbent operator.
The process of opening an incumbent telecoms operator's network to competition is a priority for the Commission. It believes more competition will promote the uptake of new technologies. However, despite a Commission ruling which mandates network access from January 1st, 2001, few competitors have been able to provide services to consumers over incumbent operators' networks. The Commission recently noted that no competitor in the Republic had yet been able to provide services to consumers.
Mr David Taylor, director of regulatory affairs at Esat, confirmed he had yesterday supplied full details to the Commission of its deals with Eircom. He said getting full access to the local loop was an imperative for the Republic.
Esat claims that the range of costs that Eircom proposes charging for access to its local network are too high. The telecoms regulator, Ms Etain Doyle, agreed with Esat and set interim charges of €13.53 (£10.65) per line. This ruling is the subject of a legal challenge by Eircom.
The Commission has also extended its inquiry to investigate the current stand-off over the introduction of Eircom's new high-speed internet product, i-stream. Eircom has been prevented from introducing the service by the telecoms regulator because Ms Doyle feels the firm has not offered competitors a reasonable price to sell a similar product.
The investigation, being conducted by the competition directorate, is part of a Europe-wide probe into the causes of a year-long delay in the opening of telecoms networks to competition throughout Europe. The directorate, headed by Mr Mario Monti, has penalty powers including the ability to levy fines as high as 10 per cent of turnover on firms acting contrary to competition law.
The directorate is expected to publish a report early next year based on the evidence accumulated from competing firms across Europe. If it finds evidence of anti-competitive practices, it can impose hefty fines against wayward incumbents. An Eircom spokeswoman said yesterday the company was not aware of the status of the Commission's investigation, and would not want to pre-empt it.
A separate Commission investigation is being undertaken by Mr Erkki Liikanen, Commissioner for Enterprise and Technology, who has threatened legal action against member-states that have not liberalised local telecoms networks. A final decision on whether to pursue legal action is expected to be taken by Mr Liikanen later this month.
Ms Doyle has welcomed a new package of EU telecoms laws yesterday that will boost the powers of the European Commission. A spokeswoman for the regulator said it would be important to see the full text, but the office was in favour of greater harmonisation between national regulators. "We would hope that increased competition and greater understanding of practicalities between member-states mean that the veto will not need to be used," she added.
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