Eir and ComReg clash over effectiveness of independent watchdog

A row has broken out between ComReg and Eir after the regulator expressed doubt about the ability of an independent watchdog to properly assess the relationship between Eir’s wholesale and retail divisions.

ComReg has signalled it may place new regulatory controls on Eir as it believes the independent oversight body (IOB), which was established in May 2019 as part of a High Court settlement between the parties, is not in a position to assess the effectiveness of the company’s regulatory governance model.

The regulator said it cannot be confident that “a clear and unambiguous set of measures, arrangements, structures and internal controls are in place” within Eir to ensure that it was complying with its regulatory obligations.

The concerns raised by the regulator follow the publication of the IOB’s first annual report on the implementation and effectiveness of an undertaking by Eir in relation to its regulatory governance.

However, Eir has claimed ComReg’s change of heart about the IOB is “very confusing”.

The company pointed out the regulator had helped to design and establish the oversight body, whose report was broadly positive about Eir’s compliance with its regulatory obligations.

In a statement, Eir said the regulator seemed to lack faith in the IOB’s findings.

The company said ComReg’s disappointment with the positive IOB report was “consistent with the recent EU Commission’s decision which criticised ComReg’s over-regulation of Eir”.

The establishment of the IOB formed part of a €3m settlement by Eircom in December 2018 after ComReg had initiated a legal action over the lack of proper controls between Eir’s two divisions.

ComReg had taken a High Court action as a result of ongoing complaints by Eir’s competitors and the regulator itself that the company was giving favourable treatment to its own retail arm in areas such as fault fixing and new connections when its wholesale division is legally obliged to give equal priority to all telecom operators.

The IOB consists of five members, with three members including its chairperson appointed by ComReg and the other two members by Eir.

ComReg revealed it had commissioned two reports from its own advisors, KPMG, to assess the levels of assurance that could be provided by the IOB and the relative

reliance that ComReg could place in turn on those assurances.

The regulator commented that the IOB report was wholly based on evidence provided by Eir.

While some evidence had been provided or verified by Eir’s risk management and internal audit divisions, ComReg pointed out that the company had not yet permitted the independence and effectiveness of those divisions to be independently assessed in a way the regulator considered “adequate”.

The regulator also claimed that Eir had not met a commitment made as part of the settlement agreement to complete a comprehensive risk review of its obligations from its designation as a “significant market power”.

Eir has disputed the regulator’s claim that it had not met a milestone and the issue has been referred for mediation.