Mr. Fergal Mulligan:

Eircom said no, and said it would not do those because that was not in the commitment agreement. Eircom has stuck pretty rigidly to the commitment agreement for its own reasons, mainly project management and costs.

The second element of cost to the consumer is the monthly rentals that Eircom wholesale will charge retailers. Currently that is regulated on a retail minus basis and ComReg does not have a price cap on the wholesale charge and it is basically regulated based on the level of competition in the market but over time - I think it is alluded to in Eircom's letter- it assumes a wholesale price increase of 2% per annum. In the current bid, our bidder is saying that it is not assuming that 2% because it does not expect urban prices to go up by 2% every year and telecom prices generally do not follow inflation. I think the telecom federation has presented numerous times saying that telecom prices have generally gone down the curve compared to inflation, which has gone up. It is difficult to assume that over the next 25 years, wholesale prices in rural areas, if they are benchmarked under our model, will go up whereas if Eircom is in a commitment agreement that is not contracted by us, then it may be free to have different prices. I am not saying that it will or it will intend to do, but there will be no universal service obligation on it to have an affordable retail price.