Eircom has criticised the high cost of regulation and asked the Government to conduct an audit of the structure and activities of the Commission for Communication Regulation (ComReg).

It wants a reduction in the 0.25 per cent levy on telecoms operator's revenues used to fund ComReg. Eircom also wants to prevent ComReg using these funds to pay for any legal actions pursued by the State agency.

The proposals are contained in a recent submission to the Department of Communications on the Government's directions to ComReg for the future regulation of telecoms. The submission also shows Eircom is concerned about the cost of introducing a new flat-rate internet product.

Eircom says its view is that the cost of regulation in Ireland is "excessively high" and a burden on industry. It says the independent audit should determine where efficiencies could be made and to assess where ComReg provides value for money.

ComReg should be prohibited from funding legal proceedings from the industry levy. An anomaly of the funding system is that the operators are effectively paying ComReg's costs in all legal actions regardless of the outcome, says the submission.

Several other telecoms firms, including mobile operators Vodafone and O2, also expressed concern to the Government about the high cost of regulation in the Republic, according to consultation documents published on the Department's website.

Eircom's submission also says the introduction of a dial-up flat-rate internet service in June will affect its ability to deliver a universal service to consumers. The company warns the new internet product will reduce its ability to invest in innovative technologies, such as digital subscriber line and internet protocol services.

The warnings come just a week after Eircom confirmed that it wanted to reform its universal service obligation, which requires the firm to provide a telephone line to every house and business in the State.

The firm's controversial plan would enable it to charge users in remote areas extra fees to connect their buildings to Eircom's national telecoms network.

The submission says the development of a flat-rate internet service will reduce Eircom's return on capital. The flat-rate product was mandated by ComReg at the behest of the Minister for Communications, Mr Ahern. Despite initial opposition from Eircom, the product will become available in June.

The paper shows Eircom believes the cost of introducing the product will affect its ability to provide other services.