The High Court has refused to halt a reduction to the wholesale price Eircom can charge for access to its broadband network.
Eircom Ltd (trading as Eir) claimed it would suffer losses of between €4.5 million and €7 million annually as a result of the reduction in the amount it charges to other service providers under the change imposed by the communications regulator, ComReg.
It asked the court to order a stay on the change pending the determination of its appeal against the ComReg decision, made last December, and due to come into force on Tuesday of this week.
ComReg had opposed the stay, as had Eircom's main wholesale broadband customers, Sky and Vodafone, who were notice parties in the case.
On Friday, Mr Justice Denis McDonald refused the stay.
The judge will hear submissions on Monday on the terms of an undertaking that Sky and Vodafone are prepared to give to preserve Eircom’s position pending the outcome of the main case.
Damage
In seeking the stay, Eircom had argued, among other things, that it would suffer irreparable damage if it was not granted, including that it would not be possible to recover any losses should it win its appeal against the ComReg decision.
ComReg argued, among other things, that it was critical to the regulatory system that the change should be implemented in circumstances where Eircom, as a significant market power, had enjoyed an over-recovery of its costs under the previous regime. The regulatory system imposes an obligation on a significant market power that prices should be related to its costs of capital.
Mr Justice McDonald noted that Eircom had, just after the appeal was initiated, announced it had reached an agreement with InfraVia Capital Partners to invest in its fibre-to-the-home (FTTH) roll out which would result in a 25 per cent increase in its ultrafast broadband network, reaching 225,000 homes by next year. Eircom had claimed that without a stay, this expansion rollout would be delayed.
The judge was conscious of the time difficulties in preparing for the appeal but said it was incomprehensible that Eircom had not referred to this expansion plan in the affidavits provided for bringing the stay application.
‘Implausible’
The InfraVia investment announcement seemed to render “wholly implausible” the case made by Eircom on the issue, he said.
ComReg had argued that any impact on the investment decision was much more likely to arise from the uncertainty created by the decision to appeal the reduction in prices decision, he said.
He accepted the absence of a stay would give rise to costs that could not be recovered.
However, the court had to do a balancing exercise related to the interests of Eircom, the public interest in maintaining the integrity of the regulatory system, consumer interests and the interests of other providers, including Sky and Vodafone who he described as accounting for the “lion’s share” of Eircom’s wholesale customers.
He did not think there was any realistic prospect of a reduction in prices between now and the determination of the appeal.
A very early trial date for the appeal had been set for this July and Sky and Vodafone had agreed certain undertakings that would preserve Eircom’s position until the matter is determined, he said.
This tilted the balance in favour of refusing the stay, he said.
