An MHK has questioned the fairness to businesses of a new pricing structure for internet services.

Lawrie Hooper (LibVannin, Ramsey) expressed concerns about Manx Telecom’s ’location-based ethernet services pricing model’ in Tynwald this week - saying it cost thousands of pounds more for businesses outside of Douglas. He asked whether the Communications Commission had approved it.

Commission chairman Bill Malarkey replied: ’The Communications Commission does not formally approve Manx Telecom’s pricing. However, in markets were Manx Telecom has been deemed to have significant market power it does work to ensure wholesale prices are cost-oriented.’

The ethernet portfolio fell into that category, he added, meaning the commission did examine the pricing to see whether it met regulatory obligations.

’Unlike the existing network, the new carrier ethernet network differentiates according to metro and non-metro areas, rather than in locations and local exchanges. This has resulted in price reductions across the board.’

He said the commission considered this was ’on balance’ a positive move that would support business.

But Mr Hooper said the structure charged businesses outside Douglas up to £1,300 more ’just to connect to the service and then nearly an extra £1,000 per month to access business-level internet’.

He asked Mr Malarkey whether he thought that was supporting business across the island.

But Mr Markey said it was a ’retail issue’ for Manx Telecom, rather than for the commission. MT had installed new exchanges in Douglas and Castletown, he said. These were the highest use areas in the island and it had only been cost-efficient to install because of the higher levels of use in those areas.

The other ’out-of-town’ areas had not yet been linked to the faster exchanges, so the cost was higher, meaning higher costs.

He said that the commission only became involved in monitoring the ’wholesale price’ because of Manx Telecom’s access to the bulk of infrastructure. It would not normally become involved in retail prices.

’We cannot interfere with the retail market in the Isle of Man and how people like Manx Telecom want to operate their prices.’