Analysis: It's unlikely that Eircom's chief executive, Mr Phil Nolan, and his colleagues were cheering the outcome of yesterday's settlement of the company's court action against communications regulator ComReg, but the group definitely seemed happy with the deal.
Eircom had been seeking a judicial review of a ComReg direction that it allow rivals to rent lines on its local network - which links consumers with telephone exchanges - for €14.67 per line per month. The action was struck out yesterday after the two sides' legal teams brokered a deal.
The terms are simple. Eircom will continue to rent its local access lines at €16.81 to its competitors, an interim price agreed in May, while ComReg will begin a new process designed at arriving at a fair price, which will apply from April of next year.
Eircom's commercial director, Mr David McRedmond, made it clear that this was the way in which his company believed the issue, which has dogged the industry since July of last year, could be finally cleared up. "We believe we have made a good start in that we now have a settlement and ComReg has agreed to put in place a new process," he said.
In some respects, the judicial review route was a risky one for the company even if it was the only route open to it at the time. The court would only have ruled against ComReg if the judge had found that it had made a "manifest error" (legal speak for a big mistake) in its procedure for establishing the local network access price.
When he took over as chief executive, Mr Nolan signalled that the company intended working with ComReg rather than spend time and money bringing it to court. However, he obviously felt it had no choice but to go to law when the regulator issued its decision in May. Eircom had offered to put the issue to an independent arbitrator earlier in the year, but ComReg refused.
Eircom was taken by surprise when ComReg issued its price decision. It had been looking for €27 and when the regulator decided on a sum of little more than half that, Eircom warned that it would have to look again at its investment plans for the State's fixed-line telecoms network, which it effectively controls.
It's not clear what price Eircom would like to see ComReg calling for, but the industry believes that it is unlikely to change radically from the €16.81 now being charged.
