Telecom Eireann's introduction of reduced rates for inland long distance calls is to be challenged in judicial review proceedings in the High Court.

Esat Telecom Ltd has claimed the discounts breach European community law and has challenged the findings of the Director of Telecommunications Regulation, Ms Etain Doyle. Yesterday, Esat applied for leave to take judicial review proceedings against the director over Bord Telecom Eireann's (BTE) reduced rates.

Mr Justice Lavan gave permission to Esat to seek a number of orders by way of judicial review against the director, who was stated to have a number of specified powers and functions under the Telecommunications Act, 1996.

Mr Bill Shipsey SC, for Esat, said the director had specific responsibility for regulating discounts offered by BTE under a directive of the European Parliament and Council.

In June 1997, Esat said it became aware that BTE was intending to radically alter discounts offered to certain customers which would significantly lower retail prices for selected calls.

In August 1997, BTE supplied Esat with details of the discounts it proposed to offer to a sector of the market where it faced competition from Esat - the inland long distance call market.

Esat made a detailed submission to the director in relation to the BTE proposal to introduce reductions in two discount schemes - the business selection discount scheme and the multi site discount scheme. It was submitted that the proposed discounts breached European community law.

Following correspondence, the director purported to reach a decision in October last but failed to give any legal or factual reasons for it and failed to demonstrate the basis on which she was satisfied there was no breach of community law, Esat submitted.

Esat again wrote to the director. On November 14th last, the director's office replied that she had made a decision on BTE's proposals. Neither the text of this decision nor the date on which it was adopted were provided, Esat claimed.

On November 30th last, BTE announced reductions in base rates and increased discounts in respect of inland long distance calls.

Esat claims that European community law specifies that any national body applying such law is obliged to give reasons for its decision.

Esat is seeking an order quashing the October 24th determination of the director regarding the rate reductions in which she found that insufficient evidence existed to demonstrate that the reductions proposed in BTE's "B trunk rate" base tariff constituted predatory pricing.

The company seeks a further order quashing the director's finding that there was insufficient evidence to show that the proposed BTE reductions would operate in contravention of competition law.