Eir fined €3m for breaching rural service obligations

The State's largest telco, Eir, has been fined €3 million for breaching its universal service obligation (USO) in relation to rural phone services.

The regulator, Comreg, imposed the fine, one of the largest on record, after the company breached a series of performance targets in relation to fault repair times and completed connections.

The targets related to 2015, when a series of storms knocked out phone services across rural parts of the State.

Eir had submitted a “force majeure” claim, seeking relief in respect of the breaches relating to fault repair times.

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The claim cited the “exceptional weather events” in January, November and December of 2015.

However, Comreg ruled the force majeure claim only applied to December. As a result, Eir paid the regulator a penalty of €3,094,000 at the end of last year.

In a statement, Comreg said the matter was now closed and it did not intend to take further enforcement action against Eir for the 2015 period. Eir confirmed it had paid the fine but declined to comment.

Under the USO, Eir, as the former state monopoly, is obliged by law to provide rural phone services even if they are uneconomic to operate.

It must connect homes and businesses in rural areas up to a cost of €7,000, after which the customer must cover part of the connection cost.

The USO also obliges Eir to provide phone boxes in remote locations, to publish telephone directories and to make available certain disability services.

Five more years

In July last year, the regulator re-designated Eir as the State’s universal social provider (USP) for another five years.

This prompted a legal challenge from the firm, which claims it should no longer be saddled with the cost of connecting uneconomic lines with the advent of broadband and mobile phone services. The case was later settled without any award or change in Eir’s designation.

The company wants the cost of providing rural phone services, which it estimates to be about €10 million a year, shared among providers.

Although Eir reclaims part of the connection costs via line rental charges, it argues that the overall costs should be shared among operators, as customers can choose different service providers when connected.

Comreg has pledged to review Eir’s USO designation after the awarding of contracts for the National Broadband Plan, which will act as a de facto USO for broadband.

With people being pushed online for all manner of basic transactions, proponents claim the lack of broadband is discriminatory.

A USO for broadband would have to be funded either through an industry-wide levy or via a financial obligation on the monopoly provider.