Eircom and the Commission for Communications Regulation (ComReg) have failed to agree specifications on a new product that rival telecom firms claim could revitalise the industry.

Unless a breakthrough in the bitter standoff between the parties is achieved at meetings scheduled this week in Dublin, ComReg may initiate regulatory action against Eircom.

That would open the prospect of fines running into millions of euro for the former State operator, should it be found to have flouted regulation.

Despite several months of negotiations on the new products - which are known as partial private circuits - and ComReg's recent decision to issue four legal directions to Eircom, competitors still cannot order a circuit.

Partial private circuits are components that can be added to Eircom's networks to enable competitors to provide services at lower prices to businesses. Competitors, such as Esat BT, are seeking prices from Eircom to enable them to use this product.

In December 2002, ComReg directed Eircom to submit detailed prices for partial private circuits by February 17th last. Following Eircom's failure to provide the correct pricing information, ComReg in February issued four regulatory directions in an attempt to force Eircom to provide detailed specifications for the new product. ComReg also set a new deadline of March 10th for Eircom to comply with its request for detailed pricing and product specification on the circuits. But it is believed ComReg remains dissatisfied with Eircom's work on the partial private circuit programme.

Industry sources say the crucial issue is the price at which partial private circuits will be made available by Eircom. There are also issues about Eircom's ability to deliver service level agreements to competitors.

In a statement published by ComReg in February, the body said it viewed Eircom's failure to provide correct pricing details as a "serious breach". It also threatened further action if its March 10th, 2003 deadline was not met.

Under new legislation, ComReg could fine Eircom a maximum of up to 10 per cent of its revenues if it succeeded in a legal action taken against the firm.

An Eircom spokesman said yesterday the firm had now submitted all the relevant pricing and product data to ComReg and it was an issue for the regulator. But he admitted there were fundamental issues between the two parties over the product's price.

A ComReg spokesman said it was continuing to work on partial private circuit products as "we see them as an important tool in the stimulation of competition in the leased line market".

"Experience in other countries has demonstrated that their application can produce significant savings for operators," he added.

The Association of Licensed Telecoms Operators (ALTO), a group representing firms other than Eircom, said yesterday the delays and lack of information on the issue were disappointing.

"These circuits are an essential element to support the roll-out of broadband services around the country. We anticipate savings of the order of 60 per cent on existing Eircom prices for leased lines," said Mr Iarla Flynn, chairman of ALTO.