Michael Finucane (Fine Gael)

Of course my party will assist and facilitate the early passage of the Bill into law. On many occasions the Joint Committee on Communications, Marine and Natural Resources, of which I am a member, has had ComReg before it and ComReg has been subject to a certain amount of criticism. I am rather surprised that the Minister, in the dying days of this Government, is introducing legislation of this kind. I anticipated that he would react much sooner.

Many see ComReg as fairly indecisive in administering its current functions. This Bill can be seen as taking on one particularly big player, Eircom, which is the true competition in the marketplace. Indeed, the Minister's party in Government privatised Eircom and we have seen over a period of years where, as a commercial entity, the end game of the shareholders is to increase their profit margin. What has created problems for people is that they cannot state that the level of telecommunications service received since the status of Eircom changed is superior to that provided previously.

Has the Minister of State at the Department of Communications, Marine and Natural Resources, Deputy Browne, experienced the frustration of phoning Eircom regarding the installation of a business or domestic line? I had this experience recently and found myself referred to five different operators over the course of 45 minutes with a simple request to install a telephone line. I can empathise with the people who rang "Liveline" complaining about the level of services.

There may be deficiencies with regard to competition and what stimulus will competition in this country receive when section 15 of the Bill refers to fines of up to €4 million or 10% of turnover? If I were a competitor considering entering the Irish market, seeing such a draconian fine would act as a deterrent to joining. If this Bill is supposed to stimulate competition, it is going about it the wrong way with fines of this nature.

ComReg often paints Eircom as the big, bad wolf and there seems to be an ongoing saga between the two. I would like to put the issues between ComReg and Eircom since 1997 on the record. ComReg issued 118 directions and 101 of these were relevant to Eircom, which shows that Eircom dominates ComReg's attention. Eircom complied with 95 of these directions, challenged six and challenged four in court. The courts found against Eircom in one of these cases while three challenges were resolved before substantive court hearings. Eircom challenged three directions on appeal and all of these were resolved before substantive appeals panel hearings. Before coming to the attention of the courts or the appeals panel there are no challenges and no appeals so there is no enforcement crisis.

It is suggested that there is serious resistance to regulatory action and, in many ways, the Bill is flawed in this regard. The points I have made highlight this. Perhaps the Government has created a monster by privatising Eircom. Employees point out that there has been a dramatic reduction in staffing resources at the company. This kind of reduction means the same level of efficiency of service as in the past cannot exist. The new owners, Babcock & Brown, will grapple with the situation and effect the necessary changes to create a viable company. There is a lack of competition in the domestic telecommunications market and we recently saw Smart Telecom fail to establish itself in the business.

We may consider broadband as an example of the Government's activity. There are metropolitan area networks, MANs, throughout the country and €63 million has been spent to date on broadband provision. The Government is suggesting it might spend a further €100 million. Can the Minister of State say how many subscribers are accessing broadband as a result of the €63 million spent? Rather than spending a great deal of money on MANs, does the Government consider that it may be in its interest to enter into commercial arrangements with existing operators to provide a service, especially where subscribers are spread thinly? The laws of economics suggest that other routes may be a great deal more expensive.

The Minister of State referred to emergency call answering services and he should not have been surprised to hear Eircom is no longer interested in providing this service. Why would commercial entities that have no responsibility for subscribers who are not their customers and have no way of accessing the €6 million necessary to provide emergency call answering services wish to provide the service anyway? The Minister of State should not have been surprised that Eircom told him it was not interested and suggested he provide a service of his own.

I do not know how long it will take for this legislation to pass through this House but it is understandable that commercial entities like Eircom should seek funding from the State for providing these services. Companies cannot exist as charitable organisations if they have a commercial mandate. Eircom is concerned it will continue to carry costs until this legislation is implemented and a new service provided. I understand the company appealed to the Minister of State for appropriate funding for provision of the service and if this had been forthcoming, Eircom may have continued to provide the service.

Fine Gael has made no secret of its dissatisfaction at ComReg's pathetic performance in protecting consumers. Competition is low, prices are high and choice is often non-existent. Our communications markets remain dysfunctional and the purpose of the regulator seems only to offer the Minister a way to escape political accountability for what has come about. I give a guarded welcome to the new powers and the potential for higher fines because such fines are probably required. However, as I mentioned, the penalties are draconian and will not help achieve the ultimate objective of creating competition to benefit consumers. Rather they will act as a deterrent.

The recent Smart Telecom saga, involving the disconnection of 45,000 land lines, was a disgrace in 21st century Ireland. Regardless of the nature of the dispute between Eircom and Smart Telecom, and the actions of Eircom relate to its commercial mandate, it is outrageous that tens of thousands of innocent customers were disconnected. Such anti-consumer activity makes a hollow mockery of the Government's claims that we have a competitive telecoms market and a dynamic information and communications technology, ICT, infrastructure.

The Minister of State must immediately set up a mechanism which requires Eircom to inform ComReg when it is poised to disconnect an operator's customers at least one month before taking that final step. ComReg would then be required to give public warning that the operator's customers are likely to suffer loss of service, allowing them time to make alternative arrangements with another operator. It is vital that steps be taken in the long term to wrestle the network away from Eircom as much as possible to allow real competition to thrive and stop situations like the one we witnessed last night from happening again. There is practically no competition in the telecommunications system in this country.

It is highly unlikely that anyone seeking to enter the telecoms market could secure the capital for such a venture. This will inevitably lead to a reduction in the potential for growth in the sector and will have a knock-on effect on jobs.

Outside the telecoms sector it is clear Ireland has taken a knock. Anyone observing the mass disconnection of telephone lines will be of the opinion that such an occurrence is like what happens in a banana republic rather than a dynamic, knowledge-led economy. I am convinced the perception of a dysfunctional telecommunications market, which is clearly what obtains, will damage our efforts to attract foreign investment.

For customers in general, the real danger is that consumer inertia will become even more deep-rooted. Consumers will view Eircom as the only safe bet for an uninterrupted telephone service. This will lead to even less competition and upward pressure on prices. This is where ComReg must play a proactive role. At times when I listen to the commissioner, I feel ComReg has become very defensive of its position. This has become the norm.

One of the greatest inequities in the telecommunications sector is the dominance of Eircom and its stranglehold on the network. ComReg has raised the issue on many occasions but has done little or nothing about it. It raised the issue in the hope of generating discussion resulting in greater competition which it hopes will benefit the consumer. This will not necessarily be the case unless the break-up results in independent ownership and administration of the two or more companies.

If the network is to be sold off, it is vital that no existing market player, no matter what size, be allowed to seize control of it. Such a move would leave us exactly where we started. There are deep-seated problems associated with the privatisation of Eircom, which are manifesting themselves very forcefully. The privatisation was botched such that one company still has a near-monopoly of landline telephony in the country while the telecommunications infrastructure remains below par thanks to a lack of investment. It is important that this be considered.

When Telecom Éireann was in existence, it provided the money for infrastructure. There have been so many company changes over the years that infrastructure is not being put in place to a degree that would allow for a strong telecommunications industry in Ireland. This is one the obvious results of privatisation. I would like to see ComReg generating a proper debate to outline its proposals to end Eircom's dominance of the market once and for all.

I referred briefly to broadband. Ireland has slipped dramatically from among the leading five countries in Europe to the bottom two, which is in itself a serious obstacle to both the domestic and industrial sectors, which have had expectations far in excess of what has been delivered. It is quite obvious that deregulation has not worked to the advantage of the consumer and that there was no proper plan and no driving force to link up the service providers, Government and regulator. The initial targets announced by the Minister some two years ago have not been met and it is now time for him to assume responsibility for the direction in which the industry goes. This will require immediate negotiation with all parties involved, driven by the Minister with a view to removing all obstructions that have so far impeded the development of this most important information technology. Time is running out. Other European countries are advancing at a remarkable rate and those that started late have already passed us by.

I will make my other points on the various sections of the Bill during the Committee Stage debate. The Bill is overdue but at least it is before us. We hope to strengthen it on Committee Stage but we will support it on Second Stage.