EU telecoms ministers yesterday unanimously backed proposals from the European Commission to complete the liberalisation of local telephony by the end of the year. In the jargon of the business that means the "unbundling of the local loop" or access to the lines of the major telecommunication companies like Eircom for their new rivals at an economic rental. In theory it should also mean cheaper calls for all.

The Minister for Public Enterprise, Ms O'Rourke, yesterday welcomed the decision and insisted that she had received an assurance from the Commission that it would ensure the final text would allow so-called "incumbent" operators to receive a fair return for their investment in the line infrastructure.

The regulation (not a directive) has direct effect and will be approved finally on December 22nd following a debate in the European Parliament which must also give its approval. ail in the spring to detail the practical arrangements.

The regulation allows the local telecom regulator, in Ireland's case, Ms Etain Doyle, to determine a fair charge for access to the incumbent's lines. In cases where there are several incumbents, like NTL and Eircom in parts of Dublin, the regulator will be able to subdivide the State to ensure that all the burden does not fall on one operator.

Eircom said it welcomed the Minister's assurance that it would be compensated for opening up its network to competitors.

"We don't have a problem unbundling the local loop as long as there is proper compensation for Eircom," said Mr Gerry O'Sullivan, group marketing director.

WorldCom Ireland managing director Mr David Hughes said the local loop unbundling was a vital element in the process of telecommunications market liberalisation and there was no question of Eircom subsidising any of its competitors.

Esat CEO Mr Neil Parkinson said its main issue with local loop unbundling would be the price, the type and the ability of Eircom to deliver. The ensuing result would be beneficial to its customers, he said.