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"All broadband prices set to soar"

Wednesday, July 30 14:33:47

All broadband users and not just those living in rural areas face "soaring" broadband prices, according to a consumer pressure group.

Ireland OffLine said that while much has been heard about the prospect of price rises for broadband users outside the major towns and cities, the likelihood is that all subscribers will face significant price hikes.

The regulator, the Commission for Communications Regulation (Comreg) has found that urban broadband customers are subsidising rural users and that Eircom may apply to the regulator to raise its rural broadband prices to recover rural costs.

The move, which Comreg says complies with European law, would affect all operators seeking to re-sell broadband services on Eircom landlines. The price of such broadband services is strictly regulated by Comreg. However, the watchdog has ruled that rural internet users are not paying the full cost of broadband provision.

"Eircom appears to be under-recovering its costs," said the Comreg ruling. "There is a cross-subsidy from urban areas into areas outside. If there were evidence of such an under-recovery, Eircom may be allowed to charge correspondingly higher prices outside urban areas, subject to the proposed notification and approval procedures."

But Ireland OffLine today said that it has recently been examining documents emanating from Comreg and spotted a "worrying trend".

"Much has been made in the media of a probable price hike for rural broadband users, the spin helpfully put on this is that urban dwellers are subsidising rural users leading to the conclusion that eircom may be allowed to charge correspondingly higher prices outside of urban areas. This is a very worrying development as consumers with bad and rotten connections will now have the privilege of paying more for these terrible connections," it said.

It accused ComReg of dismantling the USO (universal service obligation) obligations of eircom.

"However with the same elusive and impenetrable style the document hides how eircom will increase prices for urban dwellers too, starting in December 2014," the pressure group said.

It quoted a ComReg document as saying: "As this SABB service is no longer supported by the SB-WLR service and its associated price (currently E18.02 Outside the LEA or E15.02 in the LEA), we consider that it is necessary to assess the relevant underlying cost contribution from the access network for this service”.

"Translating this gibberish into English we see that eircom will likely be removing the so called subsidy for urban dwellers. As this is a wholesale charge the actual increase for consumers may be much higher, perhaps even as high as E10 per month. So, all told, it seems that huge price rises are on the way for all users of broadband throughout the country including urban users, we do have to ask has this anything to do with yet another an imminent IPO/trade sale by eircom," Ireland OffLine said.

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