Tom Hayes (Tipperary South, Fine Gael)
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This morning we will hear about two separate EU proposals. First, we will meet officials from the Department of Transport, Tourism and Sport to hear about COM (2013) 130, a proposal for a regulation of the European Parliament and the Council amending Regulation EC261/2004, establishing common rules for compensation and assistance for passengers in the event that there is a denial of boarding and cancellation or long delay of flights, and Regulation EC2027/97 on air carrier liability in the carriage of passengers and their baggage by air.

On behalf of the joint committee, I welcome Ms Ethna Brogan, Ms Niamh O'Brien and Mr. Austin Cunningham. I draw attention to the fact that, by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. If they are directed by it to cease giving evidence on a particular matter and continue to do so, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a person, persons or an entity by name or in such a way as to make him, her or it identifiable. Any submission or opening statement witnesses have submitted to the committee will be published on its website after the meeting.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

I call on Ms Brogan to make her opening remarks.

Ms Ethna Brogan:

I thank the Chairman for inviting us to attend. Together with my colleagues from the Department of Transport, Tourism and Sport, Mr. Austin Cunningham and Ms Niamh O'Brien, I hope to set out for the information of members of the joint committee the main elements of the legislative proposal - the reference is COM (2013) 130 - and the implications it may have in an Irish context. The proposal was published by the European Commission on 13 March. It is one of several new legislative proposals in the aviation sphere that will be presented by Commissioner Kallas to EU Transport Ministers at the next meeting of the Transport Council on 10 June which will be chaired by the Minister for Transport, Tourism and Sport, Deputy Leo Varadkar, in his capacity as President of the Council during the Irish Presidency of the European Union. It is for a new regulation of the European Parliament and the European Council to amend two existing EU regulations.

It is for a new regulation of the European Parliament and the European Council to amend two existing EU regulations: first, Regulation 261/2004, a well-known regulation which established common rules on compensation and assistance to passengers in the event of denial of boarding and cancellation or long delay of flights; and second, Regulation 2027/1997, on the liability of air carriers in respect of the carriage of passengers and their baggage by air.

The main objective of Regulation 261/2004 was to combat practices that had arisen in some parts of the airline industry, including overbooking of passengers to ensure maximum load capacity. The regulation established a suite of rights for passengers when travelling by air, including the right to care and assistance and even to compensation in certain circumstances when they were denied boarding or their flights were cancelled or delayed. While it has been in effect in European law since February 2005, the importance of the regulation came into particularly sharp focus during the volcanic ash crisis in 2010, when hundreds of thousands of passengers were stranded following the closure of most European airspace for number of days due to a volcanic eruption in Iceland. Under the regulation, each member state was required to appoint a body which would have responsibility at national level for enforcing the provisions of the regulation. In Ireland, the Commission for Aviation Regulation has been given that function. The main objective of the new proposal published by the Commission is to clarify some of the legal grey areas which have become evident in the implementation of Regulation 261/2004 and to take account of developments in case law relating to that regulation. Consumers and airlines alike have had difficulties in interpreting some aspects of regulation 261, which has resulted in number of cases coming before the European courts in recent years. The new proposal aims to provide clarity on issues such as passengers' right to information on delayed or cancelled flights, their right to assistance or compensation for long delays and for tarmac delays, their right to rerouting within specific timeframes and their rights in the context of missed connecting flights.

Under Regulation 261/2004, as adopted, air carriers were not required to pay compensation to passengers if they could prove that cancellations were caused by what were termed "extraordinary circumstances." However, the term was not defined in the regulation and this has given rise to a number of disputes between airlines and passengers over the years. The new proposal addresses this and defines the term in line with the decision of the European Court as being "Circumstances which are not inherent in the normal exercise of the activity of the air carrier and beyond its actual control." The proposal goes so far as to include a non-exhaustive list of such circumstances. For example, strikes caused by air traffic controllers or natural disasters are now clearly covered as extraordinary circumstances, and air carriers will not be required to pay compensation to passengers in those circumstances.

The proposal also introduces a number of new passenger rights which are not currently covered under the regulation. These include the right for passengers to have misspelled names corrected free of charge by airlines up to 48 hours before departure, the right to carry small musical instruments as cabin baggage and the right to more transparent information on cabin and checked baggage.

The proposal also aims to strengthen the oversight of air carriers by the enforcement bodies that have been set up at national level and by the European authorities. It reinforces the co-ordination and exchange of information among the national enforcement bodies throughout the European Union and will oblige airlines to put in place clear complaint-handling procedures and access to dispute resolution mechanisms where disputes arise. Finally, the new proposal aims to address the disproportionate financial burden that Regulation 261/2004 created in certain circumstances. For example, it did not place any limits on the assistance that airlines were required to offer to passengers, even in circumstances in which the delay or cancellation was beyond the airline's control. The current proposal aims to share out the economic burden among airlines, airports and other stakeholders.

As I outlined, the proposal will be presented to transport Ministers at the next Council meeting on 10 June, but this is just an initial presentation by the Commissioner on the proposal. Substantive discussions are not likely to get under way in the Council until July under the Lithuanian Presidency. Following publication of the proposal on 18 March, the Department wrote to a large number of stakeholders inviting them to submit their views on the proposal. We have received a number of interesting submissions and are examining them in detail. Clearly, we are also interested in hearing the views of the committee today in order that we can adopt a fully informed position in the negotiations on the proposal when they get under way in the Council in the coming months.

Timmy Dooley (Clare, Fianna Fail)
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I thank Ms Brogan for outlining the facts. What, if any, interaction has she had with Irish-registered airlines on the document? Would she welcome the committee's involvement? Is she satisfied that she has received the combined wisdom of those involved in aviation?

Ms Ethna Brogan:

We have written to all of the Irish licensed airlines and have received quite substantial views from the main carriers. We are also aware of the general views held by the international associations which represent airlines, such as the International Air Transport Association, IATA, ELFAA, which represents low-cost carriers, the Association of European Airlines, IACA and a number of other representative groups. The Minister for Transport, Tourism and Sport, Deputy Varadkar, recently met the director general of IATA, and it was one of the issues raised with the Minister as the organisation has some concerns about it.

Generally, the proposal has been welcomed by the industry. In the context of the response of the Irish airlines, in general they have welcomed the attempts to clarify the existing law under regulation 261 in many areas. Of course, they have some concerns about how far the proposal will go in terms of rights to assistance, compensation, etc.

Timmy Dooley (Clare, Fianna Fail)
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Is that document privileged between the Department and airlines, or would we as legislators be able to get access to it? If the information is under privilege we cannot have it. It would be open to the committee to consider inviting airlines to appear before us or communicate with us directly.

Ms Ethna Brogan:

When we wrote to the airlines we did not indicate that we would share the information. We can ask them if they have any objection to that.

Timmy Dooley (Clare, Fianna Fail)
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It is for reasons of clarity. To an extent, we are being asked to scrutinise proposed legislation without all the facts or information. We will have our own views but, as is generally the case with scrutiny, it is better that we hear all views. We will have our views as potential passengers. It would be nice to hear the views of the airlines.

Dessie Ellis (Dublin North West, Sinn Fein)
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I thank Ms Brogan for the presentation. Everyone's worry is that the regulation will lead to extra expenses in terms of administration and enforcement bodies. On the face of it, it ties up a lot of areas. We have all been in a position in which we have had to sit and wait when a flight is cancelled. It has happened many times.

Will baggage weight be standardised? Different airlines have different rules. Ryanair and Aer Lingus have their own rules and sometimes one is more flexible than the other. They charge extra fees. Another issue is wheelchair availability. I have often seen people struggle to get places on flights. Will the new regulation help to ensure there is a quota, if necessary, to deal with anyone who is in a wheelchair or needs special seating?

On passengers' rights and access to information, from what Miss Brogan said I understand the regulation will make things much clearer. That has often been a problem. People have been left sitting and do not know what to do.

Ms Ethna Brogan:

On the issue of baggage weights, I will ask my colleague, Ms Niamh O'Brien, to comment in detail on the proposals in regard to the Montreal Convention limits. In short, the regulation does not give any particular rights to individuals to carry on, say, 20 kg as opposed to 10 kg.

Dessie Ellis (Dublin North West, Sinn Fein)
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Will there be no standardisation in this regard?

Ms Ethna Brogan:

No, it will remain a matter of airline policy.

In regard to wheelchair availability, again, I will ask Ms O'Brien to outline the provisions in the regulation in respect of persons with reduced mobility. There is already a regulation in place dealing with the rights of such individuals when travelling by air. The new regulation does not introduce any new rights in that regard, but it does include certain rights in respect of potential damage to equipment. In addition, it obliges airlines to provide passengers with reduced mobility with a better level of information on the rights they have at airports.

Ms Niamh O'Brien:

The regulation does not go into any detail regarding standardisation of baggage weights. It merely sets out that passengers must be informed of the restrictions both at the booking process stage and at time of check-in. As regards weights and dimensions, that is a matter individual to each carrier and there is no specific regulation which establishes a minimum. There are some operations and regulations in regard to the assessment of weights for passengers and baggage for the safe operation of an aircraft, but the differences exist primarily due to the configuration of each aircraft. Even within certain carriers' fleets there may be different aircraft types and thus different configurations. The regulation will merely ensure that passengers are informed of these matters when booking. The Commission's impact assessment did not go any further in regard to the issue of checked baggage.

Seán Kenny (Dublin North East, Labour)
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Do these regulations apply to passengers who travel on ferries and trains internationally, where the same situations can arise in terms of cancellations, delays or lost baggage, or do they relate exclusively to airlines?

Ms Ethna Brogan:

This regulation relates to air travel only. There are separate regulations covering other modes of transport. Regulation 261 of 2004, which is the original regulation dealing with air transport, was the first passenger rights provision introduced by the European Union. Separate regulations have since been introduced dealing with the other forms of transport.

Seán Kenny (Dublin North East, Labour)
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My second question relates to overbooking. I recall flying out of an airport in New York some time ago and hearing an announcement over the public address system that passengers willing to forgo a particular flight would be awarded with free hotel accommodation in Paris. Is that type of inducement strictly legal? It is putting somebody in a very awkward situation where an airline has overbooked a flight and nobody is willing to forgo their seat. Is it illegal for carriers to overbook a flight?

Ms Ethna Brogan:

It is not illegal to overbook a flight, which is something that had become fairly widespread practice in the industry in the past. The original regulation from 2004 set out to address this issue, but there are still instances where airlines, for various reasons, might overbook a flight. Where a passenger is denied boarding, Article 4 of the new regulations sets out the obligations on the carrier in terms of what that passenger is offered. The airline must, for example, seek volunteers to forgo their seat but if no volunteer is forthcoming, a suite of rights then comes into play in respect of the passenger who is denied a seat. He or she must be offered an alternative flight, rerouting and so on. This issue is dealt with specifically in the regulation, but it is not illegal to overbook a flight. Overbooking can happen for a number of reasons.

Paschal Mooney (Fianna Fail)
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Does the debate on these provisions come under the red card-yellow card system? In other words, can the proposals be changed? Ms Brogan mentioned that they will be brought before the Council in June, which seems very imminent.

Ms Ethna Brogan:

These are proposals for regulations, which means they come under the co-decision process. In other words, they will be discussed by both Parliament and Council. The regulation was published only a few months ago and has not yet been introduced for discussion at the Council. That will happen on 10 June and I expect the discussions will take place over a period of several months, probably spanning the remainder of the year.

Paschal Mooney (Fianna Fail)
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To clarify, I am talking about the provision under the Lisbon treaty whereby national parliaments can give a yellow card to a particular Commission proposal before it proceeds any further. Ms Brogan is talking about what happens at European Parliament level whereas I am talking about what can be done by national parliaments where they do not agree with a particular proposal.

Ms Ethna Brogan:

These provisions come under the co-decision mechanism involving the European Parliament and the Council.

Paschal Mooney (Fianna Fail)
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Is Ms Brogan saying that national parliaments have no input?

Ms Ethna Brogan:

National parliaments participate through the process in which the committee is engaged today, but they do not have a veto.

Paschal Mooney (Fianna Fail)
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It is my understanding that there is a yellow card system whereby a number of national parliaments can coalesce to object to Commission proposals before they advance of the Council of Ministers.

Ms Ethna Brogan:

A voting mechanism will apply in the Council discussions whereby member states' relative weighted votes-----

Paschal Mooney (Fianna Fail)
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I am referring to the obligations and functions of national parliaments. I am not talking about the Council of Ministers or the European Parliament.

Ms Ethna Brogan:

Is the Senator referring to subsidiarity?

Paschal Mooney (Fianna Fail)
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My question relates to the process which allows national parliaments, not acting unilaterally but in a co-ordinated way, to veto certain provisions. Will Ms Brogan clarify at what point in the deliberative process national parliaments can object to the proposals? Rather than wasting time on it here, she might get back to me at a later date.

Ms Ethna Brogan:

I will do so.

Paschal Mooney (Fianna Fail)
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In the absence of such a provision, all we are doing here is feeding into a ministerial decision.

In regard to restrictions on baggage, Ms Brogan indicated that under the new proposals, passengers will be allowed to take small musical instruments on board an aircraft. Will this allowance be in place of or in addition to the existing on-board conditions which both Ryanair and Aer Lingus operate in this country? Both carriers, in common with many low-cost airlines, are attempting to dissuade passengers from taking anything at all on board. So many restrictions are now in place in respect of checked in baggage that it is becoming financially prohibitive for passengers to check in anything. Most carriers now have a system at each airport where passengers must check whether their item of luggage conforms to particular dimension requirements before they are permitted to take it on board. Will Ms Brogan clarify whether this proposal means that passengers can take small musical instruments in addition to the standard personal baggage limit and not instead of it?

Ms Ethna Brogan:

The proposal obliges airlines to permit passengers to carry a musical instrument in the passenger cabin provided it can be stowed safely in the baggage compartment or under the seat. However, carriers may determine that a musical instrument forms part of a passenger's hand luggage.

Paschal Mooney (Fianna Fail)
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That is a flaw in the proposals in that it represents no addition whatsoever for passengers. Where will passengers put the rest of their personal baggage, the carry-on item or items that usually go into the overhead bins, if they substitute a musical instrument, such as a banjo, guitar, fiddle or lute? This will generally apply to travelling musicians, for instance, who are performing across Europe. Many musicians treat their instruments like children and I can understand the origins of this proposals, which probably arises as a consequence of sustained pressure. However, it will be of no advantage whatsoever if airlines continue to operate their own internal restrictions whereby a passenger can take an instrument but nothing else.

My final question relates to the apparent lack of transparency in regard to how fare structures are arrived at by airlines.

Consumer groups state that if one goes online between midnight on Saturday night and 1 a.m. on Sunday, one is more likely to obtain cheaper fares than at any other time. There is no transparency on the part of the airlines with regard to how they have arrive at their fare structures. Consumers are in the dark as to the point at which it is cheaper to book flights. Is there anything in the proposals before us which addresses that issue?

Reference was made to a number of organisations and I accept this might have been in response to a specific question. Have any of the user groups across Europe or have any of the consumer groups in Ireland submitted proposals? Is Ms Brogan in a position to indicate the type of matters that are of concern to those groups from the point of view of consumers?

Ms Ethna Brogan:

Fair structures are not covered under this regulation. The air services regulation, No. 1008/2008, sets out the common rules for the operation of air services throughout the Union. Under that regulation, airlines have absolute and complete freedom in setting their fares. This is because it is a liberalised market. However, there are obligations under that regulation in respect of transparency at the time of booking. This means that the full cost of all the add-ons which have become a feature of the industry-----

Paschal Mooney (Fianna Fail)
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A breakdown.

Ms Ethna Brogan:

-----must be made apparent to the passenger at all stages during the booking process. What the Senator referred to is not covered in the proposal before the committee, it is covered by a regulation which has been on the books since 2008.

Paschal Mooney (Fianna Fail)
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It is a separate regulation and not one with which we are dealing today.

Ms Ethna Brogan:

Yes.

Tom Hayes (Tipperary South, Fine Gael)
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Who pays the cost in respect of this matter? Airlines have a habit of passing on costs to consumers. Will Ms Brogan provide clarification on whether there is a cost involved?

Ms Ethna Brogan:

The cost of providing care, assistance and compensation falls primarily to the airlines. In some cases where a cancellation or delay is caused by another body in the chain - for example, if an airport authority fails to clear snow from a runway and flights cannot take off at their scheduled times - the proposal before the committee will allow airlines to pass on the costs involved to that body. In reality, the costs of compliance relating to airlines probably are passed on within their fare structures. They are not borne by the consumer. The proposal is giving rights to the consumer to compensation in certain instances. The airlines must pay the costs to which I refer. Whether they absorb them or pass them on through their fare structures is a commercial matter for them.

Tom Hayes (Tipperary South, Fine Gael)
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Are there safeguards contained in the proposal which would prevent the costs from being passed on to consumers.

Ms Ethna Brogan:

No. Competition is the safeguard. It is a widely competitive market so-----

Tom Hayes (Tipperary South, Fine Gael)
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So essentially they can pass them on to the consumer.

Ms Ethna Brogan:

Yes, they can pass them on.

Paschal Mooney (Fianna Fail)
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My final question related to consumer groups.

Ms Ethna Brogan:

Yes. In the Irish context, we wrote to the National Consumer Agency, the European Consumer Centre and a number of other consumer bodies. We received a couple of responses in which the proposal is generally welcomed. In a general sense, the view of those bodies to which I refer is that the proposal is an improvement on Regulation (EC) 261/2004. The latter contains many ambiguities and has been the subject of a large number of cases before the European courts. In such circumstances, the bodies to which we wrote welcomed the clarifications provided in the new proposal and the new additional rights which will be introduced if it is approved.

Paschal Mooney (Fianna Fail)
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I am of the view that proposal should go further. Airlines should be able to carry musical instruments as checked-in baggage for free. Difficulties are going to arise in the context of the practical workings of this. The trend among airlines is towards minimising the amount of material passengers may take on board and they have already introduced severe financial restrictions in place in respect of checked-in luggage. If the proposal goes through, people will be informed that they can take their musical instruments on board - it will count as carry-on baggage - but they will not be able to take anything else. There must be clarity on that matter.

Ms Ethna Brogan:

I note the Senator's comments.

Paschal Mooney (Fianna Fail)
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I feel strongly about this matter. On paper, this appears to be an excellent initiative because difficulties with baggage are the bane of people's lives. I do not just refer to professional musicians in this regard but also to families whose children may be carrying small musical instruments with them as they go on holiday. All sorts of restrictions have been introduced in this area. The proposal before us seems to go some way towards addressing the problem but unless clear criteria are set down, the airlines will get around what is proposed. There is no doubt about that.

I take this opportunity to formally propose that representatives from the two major airlines, Ryanair and Aer Lingus, in this country be invited to come before the committee for a debate on this proposal. Aer Arann could also be included but I am not sure whether it considers itself a subsidiary of Aer Lingus.

Tom Hayes (Tipperary South, Fine Gael)
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Is it agreed that we should adopt the Senator's proposal? Agreed.

Paschal Mooney (Fianna Fail)
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I would be grateful if we could also obtain some feedback on how the system of red and yellow cards will operate in respect of a matter of this nature.

Tom Hayes (Tipperary South, Fine Gael)
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Yes, that will be dealt with. We will also ensure that the issue relating to the national Parliament is dealt with in private session.

Paschal Mooney (Fianna Fail)
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I thank the Chairman.

Tom Hayes (Tipperary South, Fine Gael)
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I thank Ms Brogan, Mr. Cunningham and Ms O'Brien for attending and for engaging with us. We will now move on to our next item of business.

Tom Hayes (Tipperary South, Fine Gael)
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We are joined by officials of the Department of Communications, Energy and Natural Reosurces to consider COM(2013)147, a proposal for regulation of the European Parliament and of the Council on measures to reduce the cost of deploying high speed electronic communications networks. On behalf of the committee, I welcome Ms Katherine Licken, Mr. Aidan Ryan and Mr. Eugene Dillon.

I wish to draw the attention of the witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009 witnesses are protected by absolute privilege in respect of their evidence to the committee. If witnesses are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable. I also wish to advise the witnesses that any submission or opening statement they have submitted to the committee will be published on the committee's website after this meeting. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.

I invite Ms Katherine Licken to make her opening statement.

Ms Katherine Licken:

We very much welcome the opportunity to come before the committee to talk through this proposal from the Commission which is very much in its early stages. The working group has not yet had a substantive discussion on it. I will introduce my colleagues: Mr. Eugene Dillon is responsible for the regulatory side of the Department on the telecoms sides and Mr. Aidan Ryan is our technical expert on telecoms. I will ask Mr. Eugene Dillon to give the opening statement.

Mr. Eugene Dillon:

The Commission's proposal, which is presented to us in the form of a draft EU regulation, was circulated by the Commission by covered letter dated 26 March. At this time we remain within the standstill period required by the treaty to allow national parliaments to consider the issue of the subsidiarity before the paper is placed on the agenda for consideration in detail within Council and with the Commission. The following comments on the draft text are therefore restricted to a departmental interpretation of the current proposal without the benefit of having consulted with other member states or the Commission in particular detail. The proposal is consistent with current Government policy, as set out in the national broadband plan, Delivering a Connected Society, which was published by the Minister in August 2012.

I propose to speak briefly on the Commission proposal under a number of headings, including a brief background to the introduction of the current Commission proposal in the context of its contribution or its ability to assist us in delivering the Government's national broadband plan, a summary of the obligations arising from the Commission proposal, the qualified nature of the access rights proposed by the Commission, some more detail but nevertheless brief comments on the structure of the proposal and the rights and obligations arising and concluding with the Department's initial views on the Commission's proposal.

The narrow objective of the proposed regulation is to reduce the costs and enhance the efficiency of deploying new high speed electronic communications infrastructure by scaling up existing best practices across the EU with a view assisting in the delivery of EU targets to make ubiquitous access to fast or super fast broadband available at fixed locations across the EU by 2020. The Commission estimates that this initiative will require a significant capital investment across the EU which it estimates will be up €63 billion. It is widely agreed that civil engineering works - that is taking the cable into the ground or overhead, civil works as we call them in the trade - constitute the dominant part in overall next generation broadband network deployment costs, irrespective of the technology. Even if one was using wireless technology or digging a trench for the cable, the figure would be in the same ballpark. The total estimated cost is €63 billion across the EU. The EU Commission estimates that if these proposals are adopted, costs could be reduced by between 20% to 30%.

Following research and consultations by the Commission, the proposal identifies and addresses four main problem areas in delivering next generation broadband access. The areas identified by the Commission are issues, inefficiencies or bottlenecks concerning the use of existing physical infrastructure such as, for example, ducts, conduits, cabinets and other infrastructure used in the provision of other utility services such as electricity, gas, transport and water. Bottlenecks relate to co-deployment, inefficiencies regarding administrative permit granting and bottlenecks concerning deployment within buildings. The buildings would be multi-occupancy units rather than residential single dwellings.

In summary, the regulation, if adopted, would require member states to withdraw any legal text which prohibits other utility infrastructure providers in the electricity, gas, transport and water markets from concluding agreements with next generation network investors to access their networks. It would require the alternative infrastructure providers to make information under existing and planned infrastructure available if requested. Such network providers would be required to meet all reasonable requests for access to the networks unless there is good reason not to permit that access. It would require greater harmonisation in the granting of statutory authorisations to permit construction. Co-ordination in Ireland would be across local authorities whereas in federal states it would be across the different regions or cantons. It would also require that new build multi-occupancy development units or any major refurbishment of existing multi-occupancy units, which require planning permission, would make provision for ducting to allow subsequent broadband connections possible. In other words, the ducts would be installed at the time of construction rather retrofitted and it would require member states to establish administrative dispute resolution processes to provide fast and inexpensive dispute solutions.

These are the main effects of the Commission's proposal. The access rights to networks of other utilities it is proposed to establish - which are possibly the most controversial - are not absolute rights, rather they are conditional and qualified. The obligation to allow high-speed broadband providers to access other networks is subject to a number of exemptions, for example, in the case where an alternative network operator already offers a telecommunications product to the market, the competing telecommunications service provider must purchase that product rather than demand a right to lay its own cable, if an alternative operator can demonstrate, on reasonable grounds, the physical infrastructure to which access has been requested is not suitable, if there is a lack of space to host the proposed facilities, if there is a risk to the integrity or security of the network already deployed or if there is a risk of serious interference from the planned electronic infrastructure with the provision of other services.

That might arise with the gas market, for example.

There are a number of exceptions which seem reasonable on the face of it. The text of the proposal is relatively short. I will summarise its content as follows on an article-by-article basis if that is of assistance.

Articles 1 and 2 are procedural in nature, setting out the scope and definitions. Article 3 establishes the general right of network operators in the electricity, gas, transport and water markets to offer access to their physical infrastructure and imposes an obligation on network operators to meet reasonable requests for access under fair terms and conditions, but subject to the permitted exemptions I have mentioned. This article also provides for a dispute settlement body to review any refusal to permit access or any unresolved dispute regarding terms and conditions of access. As is the case throughout the Commission proposal, the role of the dispute resolution body is to provide a fast and inexpensive process which is explicitly without prejudice to the rights of the parties to make applications to the courts.

Article 4 generates a right of third parties to access a prescribed minimum set of information concerning existing physical infrastructure as well as planned civil works. It also obligates those network operators to meet reasonable requests for in-site surveys of specific elements of networks to see whether they can assist the telecommunications sector, again, subject to the exemptions to which I referred.

Article 5 contains an obligation and right to negotiate co-ordination of planned civil works - future planned works - on transparent and non-discriminatory terms. Article 6 establishes a right of access using electronic means to information regarding statutory obligations which vary across the EU 27. In administrative terms we are talking about road opening access rights and way leaves. Provision must be made to allow application for the permission to be made to one contact point within each member state.

Article 7 establishes an obligation to equip new or renovated multi-occupancy buildings with in-building physical infrastructure or ducts to permit the completion of connections to individual units via a hub located outside the building. Article 8 allows electronic communications network providers to terminate their network outside the building at the hub to facilitate connections to individual units. Articles 9 to 11 concern additional procedural provisions regarding the designation of competent bodies and other procedural matters on which I will not dwell.

We are currently in the stand-still period on this proposal and have not therefore engaged in any detail within Council or with the Commission. Subject to that proviso, the Department’s initial response is to welcome the Commission’s proposal. The requirement to allow other network providers to negotiate with telecommunications networks investors is consistent with Government policy set out in the national broadband plan, in so far as it encourages all commercial and non-commercial State bodies to enter into such agreements where that can be done on a commercial basis beneficial to a landowner or infrastructure. The exemptions permitted in the Commission’s proposal seem proportionate and should enable us to resolve any conflicts that might arise on a case-by-case basis. It is also the case that the right of access is limited to access to existing or planned infrastructure. Our concern in that regard is that a telecommunications service provider could arrive and say it needs another provider to invest additional funds to allow it to lay its cables. There is no obligation. The proposal concerns existing infrastructure only.

The proposals to harmonise permit granting procedures is also broadly consistent with the national broadband plan which recognises that the more efficient and cost effective the various approval systems are for the roll-out of the required next generation broadband infrastructure.

The proposed dispute resolution body, which aims to provide timely and inexpensive decisions, should be beneficial to all parties if they come to it in good faith. In the case of disagreement by any party with a proposed solution, the Commission proposal is explicit in recognising that the dispute can then be referred to the courts. We are, therefore, of the opinion, at this very preliminary stage of debate at Council, that the Commission proposals are consistent with established national policies on access to alternative infrastructure and on that basis our opening position is that the proposal is a welcome development but subject to detailed debate in due course.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I thank Mr. Dillon. That was a very good outline of the issues. I would prefer to have each question answered in turn rather than asking seven questions at once.

Tom Hayes (Tipperary South, Fine Gael)
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That is okay.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I broadly welcome this proposal. It is sensible. In the days when we had Telecom, the ESB and water services, I could never understand why a road could be dug up three or four times in a year. This is the IT equivalent of making sure that a road opening is done once and the services are provided.

I understand the principle of subsidiarity. I also understand the House of Commons concerns that the Commission has failed to satisfy both limbs of the subsidiarity test. However, I do not fully understand the potential consequences, nor do I understand why the House of Commons is concerned about the principles of subsidiarity in this regard. I am aware the officials were not party to the debates but have they been in contact with staff in the House of Commons in order to understand their concerns?

Mr. Eugene Dillon:

I would turn it the other way around. I do not presume to speak for any other member state but, normally, if a member state has a particularly strong view on a proposal from the Commission one would expect it to lobby bilaterally. In other words, it would be in touch with this country, Germany or another country, and say it has particularly strong reservations. That has not happened. I am aware that more private companies in the UK are engaged in utilities such as electricity and rail and they might have particular concerns, whereas our State bodies have a public good element to them. They might be worried about the effect on their balance sheet if somebody else’s property is going through their ducts but that is speculation on my part. The reason we are reasonably comfortable with the proposal is that existing Government policy is consistent with it. In other words, all the State bodies are encouraged, if it is to their benefit and on a commercial basis, to make their infrastructure available or to negotiate with telecommunications providers on a commercial basis. I am speculating but it might be the case in Britain that because there is private or commercial ownership that those property owners would have lobbied and in the context of ownership that subsidiarity is a concern.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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It might be useful to make informal contact with officials in the House of Commons to try to ascertain the position in case there are concerns that we have not considered.

Mr. Eugene Dillon:

Yes, that will happen anyway within the Council but at the moment, procedurally, we are in a stand-still period. I have no doubt that when the matter is raised in Council there will be interaction across the member states.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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My second question is whether the Department has sought, or if it proposes to seek, the views of telecoms and other infrastructural providers, including the smaller locally based providers in this country.

If the Department has been in contact with them, what was their response?

Ms Katherine Licken:

If I may respond, we consult regularly with the Telecoms Industry Federation, which is part of IBEC. We meet with its representatives regularly and discuss whatever proposals are on the table, and we would expect to get input from them for certain areas. In drawing up the national broadband plan and the task force that went before it, which was quite detailed work, we discussed much of this already and therefore we are very familiar with industry's views on that. That puts us in a strong position for this particular regulation.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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Will the Department be talking to the small and medium enterprises as well as IBEC?

Ms Katherine Licken:

Yes.

Mr. Eugene Dillon:

Through IBEC.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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Third, do the proposed regulations cover inter-country, cross-channel infrastructure?

Mr. Eugene Dillon:

They may on the landmass of Europe. They apply to existing infrastructure. If there is a gas pipe between Ireland and the United Kingdom, in principle it is covered by this provision but it is subject to the exceptions-----

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I understand that.

Mr. Eugene Dillon:

-----which I believe is one of the ways the Commission dealt with subsidiarity. It is for the member state or the property owner to decide.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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It would seem to make sense that inter-country connections, including submarine, would be covered.

Mr. Eugene Dillon:

Yes. It allows it. It certainly does not prohibit it.

Ms Katherine Licken:

In Ireland we have had a policy, when State companies are building cross-border infrastructure such as the east-west interconnector or some of the ESB's infrastructure, of asking them to provide for fibre for telecommunications purposes, and they have done that.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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Logic would dictate that the regulations would reduce the overall costs not only of deploying but also of maintaining electronic communications networks, but only if the skills of maintenance personnel are improved to cover fibre line maintenance as well as other maintenance. Will these regulations in any way dictate the range of skills required by workers on lines? I do not see it in the submission and therefore I assume they do not.

Mr. Aidan Ryan:

I will take that question. The nature of the legislation is high-level. It is at the principal level of facilitation that the advantages can be leveraged from the use of and access to infrastructure. It is always dependent on the terms and conditions, and that will be worked out at a lower level. It is not envisaged that the detail of who services the individual infrastructure or the relationships, or whether third party companies will be involved, will be considered at this stage. It will be down to the detailed negotiation the legislation proposed would take place, and it will be resolved then on a commercial basis between the relevant parties.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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Fourth, in theory the impact of these regulations would be that there is a lower cost to the service user. Is there anything in them that will guarantee that there is a reduced cost to the service user rather than an increase in the profits of the service providers? Is that part of these regulations?

Mr. Aidan Ryan:

The focus is on reducing costs. It is about rolling out infrastructure, facilitating service delivery and doing things in a quick and efficient manner. The ultimate delivery of the cost to the consumer then falls into the competition remit. Telecommunications is a completely liberalised market and one would expect that the competitive forces, which in Ireland are very active in the telecommunications industry, would force the prices down to normal profit levels.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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Will these regulations have any practical impact on the delivery of broadband services to isolated rural areas, for example? I am aware there is a proposal for a dispute resolution body in the event of disagreement over fair costs for line owners. Is there a level before the dispute resolution body, or will the effect be that almost every proposal will have to go before this dispute resolution body? Is that being left to market forces?

Mr. Eugene Dillon:

There are two or possibly three levels. In the first instance it depends on the attitude of the two parties coming to the talks. If, say, the water network provider or the electricity provider is appearing in good faith and is willing to reach an agreement, and the telecommunications investor is willing to reach an agreement, they would do that on a commercial basis. It is a matter for them. If the parties cannot reach an agreement there is provision for this dispute resolution body to set in but, ultimately, if either party is dissatisfied with the decision of the dispute resolution body - I see it as a non-binding arbitration or something like the Labour Court, dare one mention the phrase - they have the right to go back to the courts. One's property rights as they exist in Ireland can be upheld and vindicated, but in the first instance it is about the attitude of the two parties coming to the talks. If one is an unwilling party, one could foresee going to the dispute resolution body and, if the party remains dissatisfied, going to the courts if necessary for vindication, but there is no way we can compel people to reach agreement.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I understand that. Mr. Dillon estimates that between 20% and 30% of the total of €63 billion across the EU will be saved by 2020.

Mr. Aidan Ryan:

If I could add to the comments made by my colleague, while the regulation is new, many of the principles captured in the regulations are already being applied by the telecommunications operators. If we look at a number of the major semi-state companies, the ESB has a great deal of infrastructure, which it shares with numerous telecommunications operators. For years RTE has made its masts available to facilitate people in putting key infrastructure on high sites. The mobile operators have come to sharing agreements between themselves. Rather than building two masts, they now try to consolidate into one mast to reduce the costs. Bord Gáis Éireann is another example. There has been a tradition of sharing and of operators working out these agreements together. The proof is that the models are in place, they are working, and the industry has been better served by the co-operation agreements reached. If anything, I would say that the level of co-operation between competing operators and infrastructural providers is increasing. That is being driven by competitive aspects, and we see the benefit in the costs of telecommunications in our economy.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I ask that question because if there is to be a saving of 20% to 30% overall, I hope it will be used to provide a service to the more isolated areas of Europe, including Ireland.

Ms Katherine Licken:

If I might add to that, when we were operating the task force one of the requests from the industry was that we remove barriers to allow them accelerate their deployment. It is exactly what the Deputy is saying. If we removed some of the barriers and made access to infrastructure easier they would be able to deploy services further out, particularly in the rural economies, where it is difficult. To answer the Deputy's question, that is the hope.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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However, there is nothing in the regulations to recognise that this is something we, as part of Europe, want to do.

Ms Katherine Licken:

I believe it is implicit in the regulation. That is the ambition behind the regulation. In the digital agenda for Europe, the ambition is 30 Mbps for everybody across Europe, and this is one of the enabling measures to make that happen. I would take it that is exactly what the entire regulation is about.

Mr. Aidan Ryan:

Recognising that much of the infrastructure is in rural areas, this provides an ideal opportunity to leverage that infrastructure where there might not be as great a choice as there would be in urban areas. It is supportive of the roll-out of infrastructure into the more rural areas.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I thank the witnesses.

Paschal Mooney (Fianna Fail)
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I will not keep the witnesses. I am curious about a number of issues.

Will these proposals have a negative impact on small and medium-sized enterprises? I ask in the context of the reference made in the presentation about how there would be access to buildings, private property and so on. As for the appeals panel, will it cost much and what will be its powers? The witnesses have outlined to a degree how the system will work when there are contesting parties. Another interesting point is the Commission has chosen a regulation instead of a directive in this regard, which is significant. Do the witnesses have an opinion on the reason for this choice? In addition, while Mr. Dillon stated this proposal complies with Ireland's policy on the expansion of broadband, would this not be better achieved at member state rather than European-wide level? While I do not wish to go into the subject matter of that policy at present, it appears to be somewhat selective in its roll-out, in that where I come from in County Leitrim, we probably will end up being the last area to get it because of our lack of population density. There are a number of other things but I do not wish to take up the time of the meeting. Deputy Colreavy has covered an immense amount of issues in that regard.

Mr. Eugene Dillon:

I might need Senator Mooney to elaborate on the negative impact. This proposal pertains to the provision of infrastructure. My understanding is it is only applicable to multi-occupancy residential units on the private side, which would be a matter of laying a cable to a hub from which individual units could be connected. Consequently, the impact on the private sector will be quite limited.

Paschal Mooney (Fianna Fail)
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Yes.

Mr. Eugene Dillon:

In many instances, one would expect that a developer would welcome that the onus is on the telecommunications service provider to lay the cable at a cost to itself.

The appeals panel is a detail we have not yet considered in detail. We will be obliged to bear in mind that on the one hand, it has a role to help to arbitrate or resolve disputes if the parties are willing, while on the other hand, we are aware there is an ability to go to the court if one does not-----

Paschal Mooney (Fianna Fail)
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I apologise for interrupting but there seems to be an implication, both in Ireland and Europe-wide, that there could be disputes arising out of this. Despite Mr. Dillon's suggestion that people should welcome this proposal - on the face of it, it is akin to stating the obvious that they should welcome it - the fact that an appeals process is being enshrined in the proposal seems to suggest that someone somewhere within the Commission believes this will create difficulties. I am trying to tease out whether Mr. Dillon can anticipate where they might arise.

Mr. Eugene Dillon:

I will defer to Mr. Aidan Ryan but the only point I will make is that we read into this proposal that it is without prejudice to the right of either party or both parties to go to court. Consequently, within a hierarchical structure, we would envisage consultation between the parties and then this appeal body as an efficient administrative solution but ultimately, it will be a matter for the courts to resolve ongoing disputes.

Mr. Aidan Ryan:

Senator Mooney is correct. The proposal is trying to bring together parties for a common good and a better good. For example, one might consider an item of restrictive infrastructure, such as where an entity might have ducts going across a key bridge. While the desire might be to go from one part of an area to another, the nature of the bridge might confine the rolling out of additional infrastructure or make it very difficult - it could be a protected infrastructure or whatever. If that duct is in place, it is owned by a particular operator that may consider it to be a particular asset it controls and it might use it for competitive advantage, that is, to restrict. Consequently, an operator could be reluctant to facilitate other competitors availing of that piece of infrastructure. This proposal is that parties should be aware this infrastructure is in place and there is a way to get across from one part of a bridge to another. The parties should be able to talk and should reach conclusions on reasonable terms that allow the infrastructure to be shared. The term, "reasonable terms", is used quite a bit in the legislation and associated documentation. However, pending someone's refusal to make available such infrastructure, in the greater social good the appeals panel will try to address that. The purpose of that panel is to serve the good. Moreover, recognising the sovereignty and subsidiarity issue, the directive is completely without prejudice to the right to go to court as being the ultimate arbiter, in the event of a complete breakdown of negotiations.

Paschal Mooney (Fianna Fail)
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I am grateful for the response but am I correct in observing that Eircom controls the infrastructure to a large extent and that it then sells its use? I have forgotten the term for it but I understand that Eircom has the line to the house and thereafter, the line goes from outside the house into the house. Do the witnesses foresee a difficulty in this respect? Has there been evidence that Eircom has not played ball in this regard?

Ann Phelan (Carlow-Kilkenny, Labour)
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Is not the purpose of this regulation to try to deal with such scenarios?

Mr. Aidan Ryan:

In the example raised by the Senator, Eircom is an incumbent operator and by definition, it has a lot of infrastructure. If one takes the example of the copper wire coming into a house, back in 2001 it was recognised across Europe that not all operators could begin to start running copper wires. Consequently, a process was put in place, the technical term for which was unbundling the local loop, in which other operators were given the opportunity, on terms. This principle has worked and across Europe, there are instances of how other operators go as far as the exchange and then use the copper wire used by the incumbent, which has facilitated competition to a great extent. This proposal is extending it, in that the particular regulation in question simply confined it to the copper wire between the exchange and the house. However, this proposal pertains to the further infrastructure that is back right across the network. It is an extension of the same principle.

Ms Katherine Licken:

It will be more like making available non-telecommunications infrastructure.

Paschal Mooney (Fianna Fail)
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All right. It appears as though the inference is the Department does not anticipate any real difficulties from an Irish perspective. I acknowledge it cannot anticipate.

Mr. Aidan Ryan:

In the context of the greater social good, it will facilitate the grater rolling out of infrastructure and greater competition.

Paschal Mooney (Fianna Fail)
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Through the Chair, the witnesses do not foresee a need for legislation that would, for example, compel in the national interest or is it the case that this regulation will address that?

Mr. Aidan Ryan:

That is the main aim of this directive.

Ann Phelan (Carlow-Kilkenny, Labour)
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On the face of it, this proposal is something that is to be welcomed. In some cases, we may have missed the boat because at a local authority level, people have argued that, as is the case in other countries, part of one's planning permission should have made provision for all these services. It is much easier to do it at that stage than it is to retrofit it. As it is very expensive to do it through retrofitting, I certainly would welcome that.

As for asset owners, railways and roads were mentioned but is there a need to include motorways and tunnels? Mention also was made about one specific point of contact and the witnesses might explain or expand on what that might be. In addition, does the Chairman envisage that some stakeholders will appear before this joint committee to discuss this directive or will they simply deal with the Department?

Tom Hayes (Tipperary South, Fine Gael)
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I suppose that really is a decision for later on.

Mr. Aidan Ryan:

I agree with Deputy Ann Phelan's comments in terms of the position, had planning permissions originally been provided for this. We are trying to catch up and use the opportunity to resolve these issues in respect of civil works that are under way at present. For example, we have been working closely with the local authorities in respect of road opening licences, on co-ordinating and bringing together the various stakeholders that have an interest in rolling out, building and using infrastructure in order that this information will be available in some central form. The latter need not be a single organisation or individual. The draft regulation refers to having web-based and hyperlinked facilities through the owners. However, the key part of it is that once the access to the information is available for the relevant parties, this will allow the right decisions and engagements to take place.

That principle is captured well in the proposed legislation.

Ann Phelan (Carlow-Kilkenny, Labour)
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On the point about motorways and the asset owners, should we specifically use the word "motorways".

Mr. Aidan Ryan:

On transport services, there is the precedent in Ireland of putting in place telecommunications ducts along many of the new motorways and they are available to operators. In particular, in the definitions section, in Article 2, the definition of "transport services" specifically includes railways, roads, ports and airports.

Ann Phelan (Carlow-Kilkenny, Labour)
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How will the MANs infrastructure feed into this directive?

Mr. Aidan Ryan:

I argue that the MANs have already done this. The principle from inception has been that it is a publicly-owned asset. It is available to everybody on equal terms. The maps and locations of the infrastructure were publicly available and advertised and persons were invited to come on open-access terms. The principle delivered on in the MANs many years ago was the precursor to what is being proposed.

Ann Phelan (Carlow-Kilkenny, Labour)
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I thank Mr. Ryan.

Tom Hayes (Tipperary South, Fine Gael)
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It seems to be both positive and well worthwhile. I thank the questioners for their contributions. As Mr. Ryan states, it is already in place. I thank the officials for their attendance.

Tom Hayes (Tipperary South, Fine Gael)
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On COM (2013) 130, I propose that the committee proceed to invite stakeholders from the airline sector to attend a meeting to discuss their views and make observations on the proposal. Is that agreed? Agreed. I also propose that, as well as the two airlines, we add the Commission for Aviation Regulation which is the body in charge of the sector.

Ann Phelan (Carlow-Kilkenny, Labour)
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Perfect.

Tom Hayes (Tipperary South, Fine Gael)
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Is that agreed? Agreed.

On COM (2013) 147, I propose that the committee proceed on the basis that it may wish to write to the Department of Communications, Energy and Natural Resources to request it to take into consideration its views and observations and keep it updated on the proposal, especially on discussions with stakeholders and concerns which may arise. Is that agreed? Agreed.