Minister for Transport Martin Cullen has accused Eircom and other telecom groups of "cherry picking" the broadband market by choosing to limit their service to areas where it was profitable.

His remarks at the IMI conference were immediately dismissed by Eircom chief executive Dr Phil Nolan, who said his company had no "universal service obligation" to provide broadband throughout the State.

The public disagreement between the two men arose after Dr Nolan criticised the Government's decision to develop its own broadband system, known as "metropolitan area networks" or Mans.

In a presentation during which he argued in favour of light-touch regulation, Dr Nolan said the Mans system introduced clear inefficiencies into the market by duplicating infrastructure that was already in place.

This stance was rejected by the Minister, who said the Government was obliged to start the Mans project for social reasons because private groups would not provide a service on which they could not turn a profit.

Mr Cullen claimed it was the Government action that led Eircom and other telecom groups to widen access to its broadband service.

"We forced you to get off your backside and do it," he said to Dr Nolan, who was sitting with him on the conference podium.

Dr Nolan rejected that argument, stating after the session that Mr Cullen's claims were not supported by the facts. "The ex-poste justification that our infrastructure is only there because they put it there is unsustainable because it can easily be demonstrated that our infrastructure was there first," he said.

"The Government investment in Mans is, for the most part, duplicating infrastructure that was already there from Eircom and Esat and possibly NTL."

He rejected the Minister's argument that the company was cherry picking the market "We're not. We have a universal service obligation... but broadband is not part of that."

He went on: "Government has a particularly advantaged position in making investments. They do have a lower cost of capital and they have a much wider area they can get funds from."