The Communications Regulator said it initiated an emergency planning process with Eircom when it became aware of financial problems at Smart Telecom.
Last Monday, Eircom cut off over 40,000 Smart fixed line customers, saying it was owed €4m by the company.
ComReg told the Oireachtas Committee on Communications today that as part of the emergency plan, it had requested Eircom to provide a reasonable period of notice following a formal decision to discontinue its wholesale service to Smart.
However on Monday October 2, Eircom declined that request and announced that one of Smart's wholesale contracts would be terminated by 5pm that evening.
Fine Gael's Bernard Durkan said the events of the last ten days had done irreparable damage to the whole concept of regulation, while the Green Party's Eamon Ryan said it was obvious that Eircom was still calling the shots in relation to the telecoms market in Ireland.
The chairperson of ComReg, Isolde Goggin, said that in the case of Eircom refusing its request, this was one area where there would be a case for improving the regulator's powers.
But she also said that the reason Eircom refused the request was that they were clocking up debt on an ongoing basis.
On Friday, the Smart board said it will sell off all of its businesses and assets for €1 to a private company controlled by its largest shareholders Brendan Murtagh.
A statement said the deal would allow Smart to provide a full service to its 160 corporate and 17,000 residential broadband customers 'effective immediately'. Eircom began cutting off these customers earlier this week, having disconnected 40,000 of Smart's fixed-line customers.
Mr Murtagh's company, BidCo, will also take on all of Smart's debts, estimated to amount to nearly €40m. Smart will be given a 10% stake in BidCo as part of the deal.
