The Minister for Communications, Mr Dermot Ahern, has challenged the telecom regulator to prove the fixed line market is competitive or he will impose a price cap.
Speaking on RTÉ Radio this morning, Mr Ahern said it was up to the regulator to establish competition and determine price.
Mr Ahern is reportedly unhappy with Comreg's approval of an increase in fixed line rental requested by Eircom, bringing the monthly cost to €24.30, almost €10 higher than the EU average for line rental during 2003 of about €14.
Eircom's strategy of hiking line rental while simultaneously reducing call costs is damaging competition in the Irish market, according to consumer groups. They complain that the lack of real competition will could eventually lead to higher prices for all.
Competing operators such as Esat BT and Smart Telecom are not yet able to offer line rental - a situation that places them at a huge disadvantage because it forces their customers to pay two bills.
ComReg estimates that Eircom retains about 90 per cent of the residential market.