The introduction of Eircom's high-speed internet service has been delayed for the second time in six weeks following a ruling from the telecoms regulator. In a second blow to the firm, a key executive and architect of Eircom's broadband strategy announced he was leaving.

Mr David Fox, head of Eircom's broadband strategy, will take up a position with another European telecoms company. Mr Fox was involved in the stalled iStream internet product which will provide consumers with high-speed internet access at a fraction of the cost of alternatives. It would also be the first deployment of digital subscriber line technology - a broadband technology which delivers innovative multimedia and internet services.

The introduction of iStream has been dogged by a series of regulatory disputes over the price which Eircom wants to charge other operators to offer a similar service. The Director of Telecommunications Regulation, Ms Etain Doyle, intervened in late September to prevent Eircom launching iStream because its prices would be a "margin squeeze" for other operators.

Eircom was proposing to charge other telecoms firms a minimum of €75 (£59) to offer a similar internet product, while charging consumers €99 for iStream. Eircom subsequently made a new pricing proposal to Ms Doyle which would have enabled it to begin selling the iStream product yesterday.

In its new proposal, Eircom raised the retail price of its iStream product by €15 to €115 while maintaining the wholesale price at €75 to reduce margin squeeze. However, the telecoms regulator confirmed yesterday she had rejected the new proposal.

Because Eircom is a regulated firm designated with significant market power, it cannot launch new services without the regulator's approval.

A spokeswoman for the regulator said it was very important that the iStream product was introduced as soon as possible - but it must be competitive. "Our concern still remains about the wholesale price. There was no suggestion made by us to increase the retail price."

An Eircom spokesman said the company had made an effort to unlock the difficulty on digital subscriber line. "Unfortunately she [the telecoms regulator] didn't respond positively," he said.

"We need a regulatory environment that is supportive of investment and recognises the economics of deploying broadband infrastructure," the spokesman said. A recent report showed the Republic lagging behind many of its competitors in the provision of high-speed internet technologies, especially in the regions.