Eircom Appeals ComReg’s Decision On The Cost Of The Universal Service Obligation

Author:Ms Helen Kelly and Nina Cummins

The appeal relates to ComReg's decision (D01/14) (published on 9 January 2014) concerning eircom's application for contribution to eircom's costs in discharging the Universal Service Obligation (USO) (http://www.comreg.ie/_fileupload/publications/ComReg1403.pdf). Please also see supporting material - Report prepared by Oxera for ComReg on assessment of eircom's application and responses to the earlier consultation on eircom's application. ComReg determined that for the year 2009-2010 there was a positive net cost of5.1m in respect of eircom's provision of the USO and that this positive net cost does not represent an unfair burden on eircom. Accordingly, ComReg rejected eircom's application for funding. By way of background, in June 2012 eircom was re-designated as the universal service provider (USP) in Ireland for a further two years - from 1 July 2012 until 30 June 2014. This designation is shortly coming to an end, and ComReg has recently issued a consultation on the scope of the USO designation and eircom's obligation to provide a printed directory of subscribers (ComReg's Phonebook research is also available). Responses to the consultation were due by 5pm on 15 April 2014. In terms of USO funding, Regulation 11 of the European Communities (Electronic Communications Networks and Services) (Universal Service and Users' Rights) Regulations 2011 (the Universal Service Regulations) provides that the USP may submit a request for funding (ie, application) for a claimed net cost (including intangible benefits) of meeting the USO and that ComReg is obliged to assess such a request. eircom submitted an application on 31 May 2012 for funding in respect of USO services provided in the financial year 2009-2010. Applications must be in accordance with ComReg Decision D04/11, and taking into account the principles and methodologies set out in ComReg Document 11/15 ("Costing of universal service obligation: Principles and Methodologies"). D04/11 sets out the approach taken by ComReg when assessing a funding application and in ascertaining whether or not an 'unfair burden' has arisen from the provision of the USO (eg, due to the positive net cost of meeting the USO). ComReg's preliminary view on eircom's application and whether the positive net cost estimated did in fact represent an 'unfair burden' was set out in ComReg Consultation 13/45 (10 May 2013). Having considered the responses to the Consultation, ComReg set out its final view in...

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