The Republic has been ranked fifth out of nine European Union states for overall effectiveness of telecoms regulation, although it has the worst record in some key areas such as local loop unbundling, a new report has found.

Local loop unbundling is the process through which incumbent telecoms firms such as Eircom open their local access networks - the lines that enter every home - to competitors to offer services.

"Unbundling" is a priority for the European Commission, which considers it an important process to improve Europe's competitiveness compared to the US. The process has lagged in a number of EU states because of strong opposition from incumbent operators.

The Regulatory Scorecard, prepared by legal firm Jones Day Reavis & Pogue in June, found the Republic was in last place on local loop unbundling behind the Netherlands, Germany and Italy, with the UK, Spain and France in equal last place with the Republic.

The report found no local telephone lines had been opened to competition by June, although since then Esat BT had begun a process to unbundle thousands of lines.

It also found the State was second last for progress on wholesale local loop unbundling - where an incumbent upgrades its access network to provide new internet services and then offers these to competitors.

It noted that this service was not in use in the Republic because of the wholesale price offered by the incumbent operator and other inhibiting technical issues such as no access to certain types of circuit.

The report also found the Republic was the lowest ranked state in terms of the time it takes competitors to negotiate new interconnect deals with Eircom. Interconnect is the method competitors use to provide services without owning the network themselves.

The report shows it takes an average of 40 weeks for a new entrant to negotiate an interconnect agreement with Eircom. In Italy it takes 12 weeks while in the UK it takes 16 weeks.

The Republic was ranked higher in areas such as transparency, where it scored 17 marks out of a total of 25, and was ranked in third place out of nine states.

The report concluded that in many countries the regulatory regimes have only been in place for three or four years and are still grappling with various issues, such as cost-accounting systems and how to properly cost orient the incumbent's operations.

But it also predicted that relatively weak countries such as the Republic and Belgium are likely to improve the most during the next two years.

But a spokeswoman for the telecoms regulator, Ms Etain Doyle, said the office did not agree with the study's findings.

"The law firm did not ask us to participate and we don't think the findings are fair," she said. "Perhaps if they had come to us, it would have been a more accurate report."

She said there were several errors in the report, such as the number of staff that the office used to deal with complaints. The report said there were 40 staff employed to do this task - the real figure was three, she added.