Telecoms regulator ComReg is preparing to take enforcement action against Eircom to prise further concessions from the former State firm on local loop unbundling, the process to open up competition on its phone network. Arthur Beesley, Senior Business Correspondent, reports.

Citing frustration within ComReg at the lack of progress on the issue, industry sources said the regulator intends to make use of new powers in legislation currently before the Oireachtas to penalise Eircom if it does not make such concessions.

The Communications Regulation Amendment Bill, which is likely to become law by the end of the month, will empower the regulator to petition the High Court to levy fines on Eircom of up to €250,000, or up 10 per cent of turnover, if it does not facilitate further competition on its network. The development comes only two days after Eircom moved to facilitate inter-operator migrations on its network. Such a service, available from May, will enable customers to transfer seamlessly their business free of charge between Eircom and the rival firms who use its network.

At issue for the regulator is Eircom's refusal to facilitate intra-operator migrations on the same basis. This would enable customers to transfer seamlessly their business between operators on Eircom's network and firms that use their own network.

Eircom executive chairman Pierre Danon this week set himself against providing such a service without charge, stating that it would be akin to giving a "free lunch" to rival telcos. He said this week that Eircom had been under no legal obligation to take the initiative on inter-operator migrations.

But industry sources said ComReg is likely to move quickly once the Bill passes all stages of the Oireachtas process.

A spokesman for ComReg indicated in clear terms that such moves were under consideration.

"ComReg is examining all options in relation to the issue. Local loop unbundling is very important in terms of the roll-out of broadband and the roll-out of telecoms services."