Simon Coveney (Cork South Central, Fine Gael)
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Question 3: To ask the Minister for Communications, Energy and Natural Resources the way he will facilitate the opening of a fully competitive market in the postal delivery sector and in particular the way he will deal with financially supporting the public service obligation that currently exists for An Post in the context of open competition; and if he will make a statement on the matter. [23169/07]

Eamon Ryan (Dublin South, Green Party)
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The European Commission published a proposal for the third postal directive last year. It proposed that the postal sectors across the European Union should be fully opened to competition. The proposal has been debated at the European Parliament and European Council. Political agreement was reached at Council level on 1 October last that the deadline for the full opening of the market would be 1 January 2011 for most EU countries, including Ireland. As Ireland has fully implemented the first two European directives, the liberalisation of our postal sector has commenced. The reserved area, the part of the market confined to An Post, has been gradually reduced since 2000. To date, Ireland has adopted a light-handed and pro-competition approach to regulating the postal market, thereby maximising the number of postal operators entering the market. In the light of the benefits that competition brings, there is no reason to suggest Ireland should depart from such an approach.

I do not doubt that liberalisation and the complete removal of the legal barrier to entry will encourage new entrants into the postal market. Other sectors which have liberalised as a result of developments at EU level such as the telecommunications market have resulted in greater consumer choice and reduced prices. I anticipate that the liberalisation of the postal market will have similarly positive effects for Irish consumers.

Issues that will be important for Ireland in the context of a fully liberalised market will include the protection of the universal service and the continued viability of An Post in the face of open competition. The draft directive proposes that the existing levels of universal service be maintained, which means that there will be one clearance and one delivery to every address in Ireland no less than five days a week. If it can be established that meeting the universal service obligation constitutes a net cost, the draft directive sets out a number of options from which member states may choose, including the establishment of a compensation fund, the procurement of the universal service by a member state, the provision of compensation from public funds or the requirement that the universal service provider bear the full cost of the obligation from its resources. No decision has been made on how the cost, if any, of the obligation will be met in the absence of the reserved area. Many international studies suggest that meeting the obligation may not entail a net cost.

Additional information not given on the floor of the House.

To inform Government in its decisions on options relating to the USO and other matters, I intend, before the directive is transposed, to conduct a public consultation seeking the views of all stakeholders in these and other matters arising from the directive.

Simon Coveney (Cork South Central, Fine Gael)
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With all due respect, if the Minister were on this side of the House, he would describe that answer as waffle. Rather than answering the question, he gave the facts that everybody knows — for example, that competition will be good for the market. He said we needed to consider a number of options, but I want to know which option he favours. Competition will be not be a problem in busy cities and urban areas. An Post accepts it will have to compete with companies coming into Ireland to cherry-pick profitable areas within the postal sector. The problem is how we will pay for the universal service obligation. How can we ensure people in places like the Beara Peninsula, Connemara and north-west Donegal receive the same level of postal service as people living in Dublin 4? The reality is that we cannot expect An Post to compete on a head-to-head basis with companies in competitive areas while having to cross-subsidise loss-making in those parts of the country where the universal service obligation is more difficult to fulfil. How will we pay for it? Will we impose a levy on new entrants into the market? Will the State carry the cost by means of taxpayers' money?

Eamon Ryan (Dublin South, Green Party)
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If I have time, I would like to put a question back to the Deputy.

Brendan Howlin (Wexford, Labour)
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The protocol is that Ministers answer questions.

Eamon Ryan (Dublin South, Green Party)
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I will answer it with a question. How is Deputy Coveney so certain that a cost will be applied? Contrary to the absolute assertion that compensation will certainly be required, the international experience in countries where liberalisation has already taken place such as Sweden, Finland and the United Kingdom is that there has been no need for a compensation scheme because a discernible cost has not been applied.

Simon Coveney (Cork South Central, Fine Gael)
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On a point of information——

Brendan Howlin (Wexford, Labour)
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There is no such thing as a point of information, but the Deputy may ask a question.

Simon Coveney (Cork South Central, Fine Gael)
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Will the Minister give way?

Liz McManus (Wicklow, Labour)
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The Minister asked a question.

Simon Coveney (Cork South Central, Fine Gael)
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It seems somewhat warped that the Minister has started to ask the Opposition spokespersons questions. Intense lobbying is taking place in the United Kingdom for what is called zonal pricing, for the very reason I have outlined. Certain interests are trying to make the case that the further a postal company has to carry a letter, the more it should be allowed to charge the customer. We are trying to avoid the introduction of such a philosophy as part of our universal service obligation. The United Kingdom is not a particularly good example.

Eamon Ryan (Dublin South, Green Party)
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I will not object to any support measures we may need to put in place. However, there should not be an absolute and blanket assumption that such measures will be needed. It is important to consider the reality of the experience in other countries as we make our decision. It would not be appropriate for me to announce today the type of support price or mechanism we should put in place. This proposed directive was cleared by the European Council last week. We will have to respect any changes to the proposed directive which may be made by the European Parliament when it is referred to that forum. When the final outcome of the deliberations in Brussels is known, we will ask the public and the various bodies interested in this sector for their views. The Government position that will be outlined at that point will be based on detailed analysis of the support systems which might have to be put in place, if it is actually necessary in the light of international experience to do so.

Simon Coveney (Cork South Central, Fine Gael)
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The European Parliament——

Eamon Ryan (Dublin South, Green Party)
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As a former Member of the European Parliament, I would expect that the Deputy would recognise that as a valid approach.

Simon Coveney (Cork South Central, Fine Gael)
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I certainly do. The European Parliament will certainly not prescribe how the Government should implement competition in the Irish postal market. It will agree the overall directive and possibly amend the manner in which it will be framed, in the interests of promoting competition across the European Union. The Government will decide how we will put it in place in the Irish market.

Eamon Ryan (Dublin South, Green Party)
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Absolutely. I am saying, in response to your first accusation, that I had to make——

Brendan Howlin (Wexford, Labour)
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I ask the Minister and Deputy Coveney to address their remarks through the Chair rather than to each other.

Eamon Ryan (Dublin South, Green Party)
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The Deputy opposite claimed that I should have made a decision today about what we will do. He rightly pointed out that the European Parliament may amend the actual directive. I will wait until that happens before I come to a decision on what I will do.