Internet users in the Republic are likely to have low-rate access to their service providers by Christmas, it emerged yesterday. Such a move would make Ireland the first EU state to introduce such a measure, and could give the Republic a head start in the area of e-commerce.

The Minister for Public Enterprise, Ms O'Rourke, said she had a personal commitment to ensure low-cost Internet access for business and residential customers, predicting that this would stimulate use.

"At the moment Internet charges are dependent on the amount of time spent on the phone to the Internet service provider. This is the case across all of Europe and is fundamentally different to the situation that prevails in the US," she said.

She said she was convinced the major reason the US was so far ahead of Europe in e-commerce was because its consumers had low rates of access.

Earlier this year, Ms O'Rourke announced the Republic's telecommunications market was to be deregulated earlier than expected. Some observers predicted that Telecom Eireann would introduce a flat rate for all local calls.

But with local calls forming a major source of revenue, the State-owned firm was quick to pour cold water on the suggestion.

Telecom's strategy, however, is focused on encouraging the use of new technology, and the company sought a way to lower local calls to Internet service providers without leaving itself open to an instruction from the European Commission to extend the measure to all local calls.

A spokesman for the company confirmed last night that Telecom Eireann had been in discussions with the European Commission in recent days, and was satisfied the authorities would not interpret a low-rate, or a flat rate, for Internet access as having consequences for the general local call rate.

"Telecom shares the Minister's vision, as it did with the telesales business," the spokesman added.

Telecom Eireann was the first European company to drastically reduce its international freephone rates, thereby stimulating a huge growth in the number of call centres, the spokesman said. These operations now employ some 15,000 people, he added.

Telecom Eireann sources said customers could expect to see the new rate introduced by Christmas, and added that there would likely be a separate package for users of fast-access but more expensive ISDN lines.