eircom: bid for backdated USO funding rejected by regulator

3 Jul 2007

The Irish telecoms regulator, the Commission for Communications Regulation (ComReg), has rejected a request by national incumbent eircom to have funding for the provision of its universal service obligations (USO) backdated to 1999. According to a report from SiliconRepublic.com, the watchdog will only sanction the assessment of a request for USO funding dating from 1 April 2006. eircom was established as the Republic’s universal service provider for a four-year period in July 2006, and under EU regulations is allowed to request funding from the state for providing a service where its obligations result in costs that could be construed as an ‘unfair burden’. The former monopoly made its case for funding in February, following which ComReg launched a consultation document that was replied to by BT, the Association of Licensed Telecoms Operators (ALTO), O2 and Vodafone. The regulator’s decision on the matter says it would be unfair to other operators to backdate funding as it could potentially have a run-on effect for those operators in terms of sector competition and financial planning. ComReg points out that eircom’s rivals would have made strategic decisions based on the presumption that backdated funding would not be in place.

For its part, Vodafone argued that allowing eircom’s request to stand could unsettle or undermine investment incentives, while O2, ALTO and BT are believed to have expressed concern that no operators had made provision in their financial planning for the USO funding to be retrospectively applied.

Ireland, eir