The Competition Authority is expected to bring a prosecution against Telecom Eireann for "abusing a dominant position" in relation to the cable infrastructure which enters people's homes.

The authority has written to the company making it clear this infrastructure - known as the "local loop" - should be open to other users. It stated that Telecom's sole operation of the loop was breaking competition law. Last night a Telecom spokesman confirmed the company had received correspondence from the authority but said he was not aware of any pending prosecution. He said the company had made its position clear on the issue - that Telecom could only consider "unbundling" the loop if a "proper cost structure" were agreed.

The company also wanted clarification on whether it would be compensated for investments made in the infrastructure over the years, he added.

The Irish Times understands the authority told Telecom Eireann that parts of the local loop could be hired by other operators immediately. The report from the Government's Advisory Committee on Telecommunications, published in November, called for the unbundling of the local loop.