Seanad debates

Thursday, 15 February 2007

Communications Regulation (Amendment) Bill 2007: Second Stage

 

Question proposed: "That the Bill be now read a Second Time."

11:00 am

Photo of John BrowneJohn Browne (Minister of State, Department of Communications, Marine and Natural Resources; Wexford, Fianna Fail)
Link to this: Individually | In context

I am pleased to present the Communications Regulation (Amendment) Bill 2007 for the consideration of the House. This Bill is a key part of the Government's priority legislative programme and, when enacted, will greatly strengthen the power of the Commission for Communications Regulation, ComReg, to enable greater competition in the electronic communications market.

It is a result of consultation between officials of my Department, the Commission for Communications Regulation, the key market players and other stakeholders in the industry. Before going into the details of the Bill, I would first like to give Senators some background on the electronic communications sector in Ireland and the rationale for the Bill. The electronic communications market is of key importance to the national economy and is a significant factor in determining national economic competitiveness. It is estimated to account for over 3% of GNP, with total revenues for fixed, mobile and broadcasting markets now estimated at almost €4.5 billion per annum.

Creating an open and competitive market is the key challenge for the national regulatory authority, ComReg. The EU regulatory framework for the electronic communications sector, which is in place since 2003, is based on competition law principles. The framework was designed to reform the European regulatory structure for the sector in light of the experience of market liberalisation. It replaced the previous system of telecommunications licences with a new general authorisation system and changed the way the significant market power of operators was determined and regulated.

The regulatory framework aims to ensure fair competition between service-providers, some of which are dominant for historical infrastructural reasons and, as a result, enjoy a market advantage. Relevant remedies are applicable under the regulatory framework to stimulate competition and discourage the abuse of dominance, thus leading to a better range of competitively priced services for consumers. It is essential the framework be implemented in full in Ireland to realise the objective of promoting competition for the benefit of consumers.

ComReg primarily operates in a commercial environment where decisions in respect of operators can have a significant financial impact. In analysing telecommunications markets, ComReg has found significant market power in both fixed and mobile markets. Where dominance is found, ComReg is obliged to impose remedies to improve the competitive environment.

To encourage compliance among market players, especially the larger players, ComReg requires a suite of enforcement options ranging from minor sanctions for less serious breaches of the regulatory framework to more stringent sanctions for major breaches. Enforcement is a key element of effective regulation, and appropriate remedies and sanctions are vital to secure regulatory compliance.

It is in that context the enforcement proposals in the Communications Regulation (Amendment) Bill 2007 have been drafted. Both ComReg and the European Commission have cited the lack of strong enforcement measures as an obstacle to the implementation of the regulatory regime in Ireland. The primary purpose of the Bill before the House is to increase the enforcement powers of ComReg in order that it can better achieve its primary function, the promotion of competition in the market, thereby leading to better and more competitively priced electronic communications services for consumers.

Apart from the regulation of the market, the Bill also provides for the establishment of an emergency call answering service, ECAS, to be operated by a private sector undertaking. The ECAS is currently being provided by Eircom and funded from its own resources.

Eircom has approached the Department and has indicated that it is no longer minded to provide that service. It is proposed, therefore, that the service be provided by a new undertaking and funded by a fee per call, to be determined by ComReg and paid by public-access telecommunications providers that forward emergency calls to the centre. It is also proposed that ComReg monitor the quality of the service and report annually to the Minister on its operation.

The Bill also provides for the regulation of the .ie Internet domain name by ComReg. With the increasing importance of Internet addresses to economic activity, there is also an increasing need to ensure the operation of the .ie domain name is technically and operationally secure.

I now turn to the text of the Bill itself. As a detailed explanatory memorandum on the Bill has been published, I do not propose to go into the detail of the text but rather to highlight the main provisions of the Bill in the order they appear in the text.

The Bill is divided into four Parts. Part 1 contains standard preliminary provisions. Part 2 contains the main provisions giving additional functions and enforcement powers to ComReg. Part 3 amends the Electronic Commerce Act 2000 to provide for the regulation by ComReg of the .ie domain name. Part 4 of the Bill amends the Competition Act 2002 to give ComReg powers under that Act to investigate and prosecute offences such as the abuse of dominance.

In Part 1 of the Bill, section 5 amends the Communications Regulation Act 2002, hereafter referred to as the principal Act, to confer additional functions on ComReg. The following additional functions are included: monitoring the operation of the ECAS, to be established pursuant to section 17 of the Bill, to which I will return later; collecting and disseminating information from undertakings for the purpose of contributing to an open and competitive market, and for statistical purposes.

While ComReg has a variety of information-gathering powers under the regulatory framework, none of them clearly envisages their being used for general statistical purposes such as the compilation and publication of ComReg's quarterly key data reports on the Irish communications market. While most operators comply with ComReg's quarterly report data requests, the regrettable fact remains that some of the major operators either do not provide data for some quarters or fail to supply any of the data that ComReg requires.

There is also a lack of any express power in the various regulations implementing the regulatory framework for ComReg to collect data for the purpose of market analysis. That is a far from ideal situation, since the market analyses that ComReg conducts are the cornerstone of its regulatory function. Any regulatory intervention by ComReg in the market must be evidence-based. Such evidence must be reliable and thorough. In that regard, accurate statistical data are crucial. ComReg also has reporting obligations to the EU Commission and to the Central Statistics Office and supplies data from the quarterly reports to the OECD and the International Telecommunications Union on a voluntary basis.

Deficiencies or delays associated with the provision of information to ComReg have a direct effect on its ability to share information with other organisations. It should be noted that ComReg is mindful of the burden that data collection imposes on operators and has sought to assist operators by specifying particular data requirements that do not apply to them.

A third additional function conferred on ComReg by Section 5 is to carry out investigations on its own initiative. Currently, ComReg can carry out investigations only as a result of complaints from undertakings and consumers. This widening of its powers to carry out investigations into matters relating to the provision of electronic communications services, networks or associated facilities on its own initiative will increase its effectiveness as regulator of the industry.

Section 6 is a new provision that enables the Minister to obtain information from ComReg and undertakings that will assist him or her in formulating policies and plans to deal with network and security issues that may arise. Section 7 provides protection for whistleblowers who disclose appropriate information to ComReg. That provision will encourage employees of undertakings to report any wrongdoing to ComReg and conforms with Government policy to provide such protection in new legislation.

To improve the transparency of ComReg's operations to the industry and public, I have included new provisions under section 10 requiring it to prepare and publish, before the end of each financial year, annual plans and associated budgets setting out the principal activities that it proposes to undertake in the following year. It is reasonable that companies in the communications and postal sectors that fund ComReg's activities should have more information on how the levies paid to ComReg are spent. Those provisions will enhance the transparency of ComReg's operations.

Section 11 provides ComReg with the power to require persons to appear before it to give evidence or produce a document that relates to a matter concerning the performance or exercise of any of its functions or objectives. That power will assist ComReg in its investigative functions and will improve ComReg's ability to gather information on suspected breaches by operators of their obligations under the regulatory framework.

Under the principal Act, authorised officers have the power to enter, search and inspect premises and take copies of books, documents or records relating to the provision of electronic communications services, networks or associated facilities or postal services. That power, however, may not be appropriate in all circumstances. Many of the regulated firms are very large and occupy several sites. Without precise knowledge of what documents or files may be stored in a particular location, those search powers represent a blunt instrument. The power to require persons to appear before ComReg to produce evidence or documents would allow ComReg to place on the operator the onus of producing relevant documents and answering questions about them.

That power, which will substantially increase the effectiveness of ComReg's investigatory powers, is important in the context of proper enforcement and is based on a similar provision in the Competition Act 2002 that empowers the Competition Authority to summons witnesses to attend before it.

Section 14 introduces a new offence of overcharging by an undertaking. The current regulatory framework provides ComReg with powers regarding consumer protection but does not specifically allow ComReg to investigate overcharging. The Director of Consumer Affairs has the primary role in consumer protection, but given ComReg's overarching regulatory remit for electronic communications, I consider it appropriate to extend ComReg's consumer protection role to include powers to allow the specific investigation of overcharging. Previous incidents of overcharging by operators highlighted ComReg's absence of powers to intervene in such matters. The provision will rectify that situation.

Any investigation of suspected overcharging under this section may, if ComReg considers it necessary, include an audit of an undertaking's billing system to ensure its accuracy and to determine whether the overcharging arises from a system failure or from one-off or other factors.

The current regulatory framework under which ComReg operates was transposed into Irish law by regulations made under the European Communities Act 1972. Section 3 of that Act prohibits the creation of indictable offences. Accordingly, the current regime only provides for summary offences with a maximum fine of €3,000 and the option of civil proceedings for non-compliance with obligations under the regulatory framework.

Section 15 of the Bill provides a mechanism to enable me to create indictable offences for the purpose of ensuring that penalties in respect of certain serious breaches of obligations are effective and proportionate and have a deterrent effect. As I already stated, enforcement is a key element of effective regulation and appropriate remedies and sanctions are vital to secure regulatory compliance.

In reports on the Implementation of the EU Telecommunication Regulatory Package, the European Commission has found that effective competition is often precluded by the lack of enforcement of national regulatory authorities' decisions. In particular, in its 11th report published in February 2006, it identified the limitations of the power of the Irish national regulatory authority, ComReg, to enforce decisions as an obstacle to the further development of competition in the fixed and broadband markets. Where a national regulatory authority has strong powers of enforcement, this of itself encourages operators to comply with their legal obligations.

I am also making provision in section 15 on civil and criminal proceedings on the admissibility of expert evidence, the provision of documents to juries, presumptions as to the authenticity of certain documents and the admissibility of statements contained in certain documents. These provisions are based on similar provisions in the Competition Act 2002. As in competition law, legal proceedings relating to the electronic communications regulatory framework can be technical, specialised and complex and these provisions will facilitate the effective administration of such proceedings.

Section 16 provides for an amendment to section 57 of the principal Act, which provides for physical infrastructure sharing by infrastructure providers. Currently, where agreement cannot be reached on physical infrastructure sharing, ComReg can intervene to ensure access to the operator who requests it. However, sharing can only be enforced by ComReg against operators through conditions attached to their authorisations.

Some physical infrastructure providers, such as property developers, who are not subject to an authorisation, have entered into exclusive contracts with only one operator to provide electronic communications services to the occupiers of new developments, thus denying other operators the opportunity to provide a service. In such situations, ComReg cannot ensure access to other operators. In some cases the universal service provider — in this case Eircom — cannot gain access to provide a service which it is obliged to do under the universal service regulations.

The amendment to section 57 will enable ComReg to enforce access to physical infrastructure against operators and other infrastructure providers by way of an application to the High Court for a compliance order with a decision made by it in any dispute on sharing. ComReg may also apply to the court for an order directing the respondent to pay to ComReg a financial penalty of such amount as is proposed by ComReg having regard to the circumstances of the non-compliance. The effect of this provision should be increased competition between operators, more choice for the consumer and lower prices for services.

Section 17 inserts a new Part 6 into the principal Act that provides for me as the Minister to enter into a contract with an undertaking for the provision of an emergency call answering service. This section also provides for ComReg to regulate the price the undertaking shall charge for the handling of emergency calls. It also provides for a payment regime where the undertaking shall charge the operator who forwards emergency calls on a per call basis.

Part 3 amends the Electronic Commerce Act 2000 to provide for the regulation of the .ie domain by ComReg. It provides for the powers given to me as Minister, pursuant to the Electronic Commerce Act, to be transferred to ComReg. This Part also provides ComReg with powers to designate an interim authority and to have access to the registry files to ensure that the functioning of the .ie Internet domain name is secure at all times.

At the National Telecoms Summit in April of last year, I announced that I proposed to give ComReg competition law powers in an attempt to improve the competitive environment in the broadband sector. In order to improve access and services in this sector, full local loop unbundling is essential. It increases competition, innovation and choice on the DSL network for consumers. It is also a legal requirement under the EU regulatory framework. Without it Ireland will never reach its potential.

Part 4 amends the Competition Act 2002 to provide ComReg with the same power that the Competition Authority has under that Act, to investigate and prosecute breaches of sections 4 and 5 of the Act relating to restrictive agreements and practices and abuse of a dominant position — but only in the communications sector. These powers are similar to those which the UK regulatory authority has in the telecommunications sector and which have proven effective in opening up the broadband market in the UK. Strong powers to prosecute specific anti-competitive behaviour are needed in order to encourage compliance among market players, especially the larger players.

The Competition Authority is the national agency responsible for enforcing Irish and European competition law. However, given ComReg's detailed sector specific knowledge of the dynamic and rapidly changing electronic communications sector, the Minister, Deputy Noel Dempsey has decided, in agreement with my colleague the Minister for Enterprise, Trade and Employment, that ComReg be given similar powers of investigation and prosecution as the Competition Authority has under Part 2 of the Competition Act 2002. Such powers will only apply to suspected instances of anti-competitive agreements, decisions and concerted practices and abuse of dominance in the electronic communications sector. These powers will significantly enhance ComReg's powers to enforce the competition law principles on which the EU regulatory framework is based. I am confident that they will strengthen ComReg's ability to open up the broadband market to more market players and I look forward to an increase in broadband penetration throughout the country as a result.

This Bill is an important measure in contributing to a fully open and competitive electronic communications market in Ireland. The proposals it contains are measured and proportionate responses to the challenges facing the Commission for Communications Regulation in meeting its mandate. They do not radically change ComReg's enforcement functions, but merely enhance and strengthen them within the existing framework. Unless ComReg's decisions can be adequately enforced, its overall competence to carry out its functions is restricted. As I stated in my opening remarks, enforcement is a key element of effective regulation and appropriate remedies and sanctions are vital to secure regulatory compliance.

I am confident that the strengthened enforcement powers being made available to ComReg will result in improved services and more choice for the consumer, particularly in the broadband market, and will provide the regulatory certainty to encourage more players to enter the market. Operators will also benefit from a growing market and compliant operators will have nothing to fear from the proposals contained in this Bill. At the end of the day, however, it will be the individual consumer, the business sector and the wider economy that will benefit from increased competition and a broader range of services, and that is the ultimate aim of this important Bill.

Apart from some amendments of a technical legal nature that are being examined in conjunction with the Attorney General's office, I do not intend to introduce any substantive amendments to the Bill on Committee Stage. I look forward to hearing the views of the Members of this House on the Bill and their assistance in facilitating its early passage into law. I commend the Bill to the House.

12:00 pm

Michael Finucane (Fine Gael)
Link to this: Individually | In context

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.

Photo of Brendan KenneallyBrendan Kenneally (Fianna Fail)
Link to this: Individually | In context

I welcome the Minister of State to the House. He seems to be spending a lot of time here lately. I welcome the arrival of this Bill, which deals with some very important, but not well-publicised, issues and makes provision for the safeguarding of essential services for citizens. It deals in essence with fixed and mobile telephony and has particular relevance to electronic communications, particularly the Internet and the less well-known ".ie" domain name registry.

I welcome in particular the strengthening of the enforcement powers of the Commission for Communications Regulation, ComReg, which need to be formalised in a world in which few actually understand the system other than the specialists who operate it. The regulations under which the commission is working at present were introduced under the European Communities Act 1972, more than 30 years ago, which is, for some, a whole lifetime ago. There is no primary legislation to underpin what the regulator is doing. It cannot provide for indictable offences, for example, and has only summary jurisdiction under which to work.

When we consider the vast sums of money that the telephone companies turn over each year and the enormous profits they generate, we realise there is insufficient oversight of their operations and insufficient provision for bringing them to heel when appropriate. We need these mechanisms, which the Bill proposes, to make them toe the line.

I am pleased ComReg will be given the same kinds of powers the Competition Authority enjoys under Part 2 of the Competition Act. These new powers will also allow ComReg to investigate abuses of a company's position, such as is suggested in the case of Eircom's fixed-line network. Up to now, there was no effective communications legislation to deal with this and people will be glad to see that such an essential service as our telephone system is finally being brought into line in this regard. As a result of this legislation, ComReg will be in a much stronger position to prevent or eliminate abuse by a company in a dominant position, and will be able to impose substantial fines to bring some realism into the sector.

I note that under section 6, the Minister and the commission are being given information-gathering powers in regard to the technical operation and performance of telecommunications networks. This is essential because, from what we have seen so far, the various networks have not exactly been forthcoming with information in regard to their businesses. On the occasions when members of the Joint Committee on Communications, Marine and Natural Resources tried to question representatives of the telephone companies, particularly the mobile operators, they were stymied at every turn and put on the long finger. Senator Finucane will be well aware of this because he is a member of the committee. We found it almost impossible to obtain information and details on customer bases, how charges are linked to income, activity details, etc. The proposed measure will give the Minister and the commission the power to extract the information we require to properly balance and regulate the activities of the telecommunications companies. The net effect will have to be a better deal for the public.

Section 11 provides for the commission to require providers to attend before it and produce relevant documentation. With this clearly stated in legislation, the providers will not be able to seek the protection of the courts to stymie the intent of the Oireachtas. There are plenty of protections built into the section to provide for cases where it would be undesirable for someone to divulge information. However, where one has been found guilty of an offence, the fine of €5,000 per individual should focus minds. The penalties reflect the seriousness of the circumstances as we see them. With telecommunications likely to be a continually expanding business, we should get it right at this relatively early stage.

It is highly appropriate and practical for the Minister to have similar powers in the event that we need to react to the loss of one of the networks or some major upset affecting day-to-day business. Someone would have to be able to step in, establish all the facts quickly, take the necessary decisions and restore normality to the network in order that commercial and social Ireland would not experience the major disadvantage of not having a communications service.

One of the areas of difficulty and sometimes hardship for network subscribers is the high cost of roaming charges levied on them when they are abroad. They are scandalously high in some instances. In the case of Vodafone, roaming charges have been eliminated for users of its network in the United Kingdom, but this must be achieved for other networks also. Call charges are steep enough without criminally high roaming charges being imposed in addition. Call charges are steep enough without criminally high roaming charges being imposed as well. With the implementation of this measure, the commission or the Minister can establish all that information and act appropriately on it. In any event, we do not yet know to what extent technology will catch up with these conventional systems. I am not altogether familiar with them, but there are methods by which calls can be made by way of computer and telephone lines, which can deliver a lengthy call to the US for instance, for only a few cent. With the ongoing expansion of the world wide web, there will surely be many more developments in the future and who knows what systems may be used a decade hence.

In the meantime, the vast majority of people are dependent on the companies and networks we have and it is up to us to see that charges and service are at an acceptable level or be able to adequately determine why not. For many years we have depended on the goodwill of a wide range of companies to provide services on a goodwill basis in this country. One of these is the provision of an emergency call answering service. In ordinary terms, this is the 999 system as we used to know it and the 112 service being used on mobile phones today. Perhaps because the telephone system in Ireland developed from that provided directly by the Department of Posts and Telegraphs, we took it for granted that the emergency service would be provided and maintained free of charge for every subscriber and from every phone.

Traditionally, when someone dialled 999, prominent red lights lit up on the switchboards in front of the operators and someone would immediately answer the call and connect to the relevant emergency service. That is the way it has been up to now and we should acknowledge the co-operation of the particular network operators which kept the service going. It is time now to bring this service into line with modern trends and requirements and Part 6 of the Bill provides for the formalising of this service between the Minister and an appointed EGAS agency. The service will be put out to tender and a private contractor appointed to administer it. It will be funded by all of the operators across the networks, who will exchange charges as appropriate.

I am glad to see that the Bill proposes to formalise the situation in regard to domain registry in respect of web sign ".ie". I want to acknowledge that this service is being administered in a very controlled manner, appropriate to its level of importance as a national service and resource. The .ie was allocated to this country by the International Organisation for Standardisation and is similar to the letters allocated to other countries in accordance with the two-letter code in the international standard. It is regulated to some extent under the Electronic Commerce Act 2000, but a great deal has happened within e-commerce since the passage of that legislation. The purpose of its inclusion in the Bill is to facilitate fairness, transparency and promotion of fair competition in the allocation and administration of domain names under the .ie extension.

The approval and allocation of such a domain name is administered privately, but in a very fair and disciplined way, with very little scope for abuse of the system. While it may be very easy for someone to register under the .com or .eu domain names, .ie is very tightly controlled and it is a requirement on every applicant to fully establish and justify his or her entitlement to a registration. This has maintained the integrity of the system which the Bill seeks to underpin and the administration of .ie will now come under the control of ComReg and the Minister.

Far from having been abused in the past, the system of domain registration for .ie was if anything, too restrictive, but with the number of Internet sites now being set up and requests for the registration of domain names with .ie, the same level of vetting is not possible. According to its own site:

The IEDR is the registry for .ie Internet Domain Names and maintains the database of .ie registered Internet names. The IEDR is an independent not-for-profit organisation that manages the .ie country code Top Level Domain (ccTLD) namespace in the public interest of the Irish and global Internet communities. The IE Domain Registry is not a governing or regulatory body, but provides a public service for the .ie namespace on behalf of the Internet community.

I am told by reputable companies which register domain names that the IEDR is very well structured and managed at the moment. It is not slow to refuse or revoke a domain registration where appropriate, on the basis of a company not fulfilling its undertakings or even placing inappropriate material on its website. For instance, all applicants applying for a .ie domain name who are not situated in the 32 counties of Ireland, must demonstrate a real and substantive connection with Ireland. Examples of acceptable documentation demonstrating substantial trade or commercial activity within Ireland include copies of invoices; showing trade to or from Ireland; high-quality brochures displaying a significant intention to trade in Ireland; and a signed letter on headed paper from a bank manager, firm of chartered accountants, registered auditors and tax consultants — where the tax advisor identification number is displayed — or solicitors, confirming the applicant's trade relationship with Ireland.

All this demonstrates how seriously registration has been taken so far, but it is a growing responsibility. It is such an important resource for the country as a whole that its future effective and honest administration justifies this being guaranteed by giving ComReg an official watchdog status in the process, to avoid mistakes and unfair situations, as happened under other domain registrations. For example, there was the high-profile case some years ago of the domain name of www.waterford.com being registered by a young person and subsequently sold to the company. As currently constituted, and with the level of vetting applied to applications, that would not happen in the case of .ie. Proof of a bona fide business is required and there is cross-checking with the Companies Office and other agencies before a .ie domain name is registered. We have to maintain the integrity and stature of .ie as a domain register and its inclusion in the Minister's and the commission's remit will help towards that end.

Section 16 has a very important and welcome provision in regard to infrastructure sharing. There has been a certain amount of abuse in the past in regard to the ducting and cabling installed by developers in new housing estates, whereby the subsequent occupiers of the houses were tied to one telecommunications provider in almost a monopoly situation. This is now being addressed and will eliminate such restrictive practice in the future.

I am very pleased to see that section 7 provides for what we refer to as a whistleblower's charter for wrongdoing within the communications industry. We have seen the value of disclosures made by courageous individuals in the past, often with adverse consequences because they had no protection in legislation. It is only proper that anyone who makes a disclosure as regards wrongdoing in the communications industry should have legal protection against civil and criminal liability. We have to avail of every opportunity to maintain the integrity of one of our most important industries and the Bill goes a long way towards dealing with many of the deficiencies in communications in Ireland at the moment. I commend the Bill to the House.

Photo of Feargal QuinnFeargal Quinn (Independent)
Link to this: Individually | In context

Senator Norris has asked whether he can share some time with me. I believe I have 15 minutes. All he requires are the last three or four minutes.

Michael Finucane (Fine Gael)
Link to this: Individually | In context

Is that agreed? Agreed.

Photo of Feargal QuinnFeargal Quinn (Independent)
Link to this: Individually | In context

I welcome the Minister and the Bill, although it is, perhaps, ten years too late. I am very impressed at what Senators Finucane and Kenneally have been able to determine from the Bill. I do not see myself as someone who is expert in this area, as regards going through the Bill and recognising the challenges it presents. I recall the time, 25 years ago, or more, when I became chairman of An Post and there was a great rivalry within the old Department of Posts and Telegraphs involving postal staff who would be left behind in what was regarded as the second cousin or the poor relation. An Post people thought their company would be a poor relation to the new sexy modern Telecom Éireann. In fact, Telecom Éireann was very far behind due to the lack of investment over many years before that. Our hopes were high for what could be achieved in the years ahead.

I am disappointed when I reflect on the direction in which we have gone, especially taking account of the Lisbon Agenda. It outlines that we intend to be the new knowledge-based competitive market in Europe. When I reflect on the progress we have made, I discover that while we thought we had skipped a generation in the 1980s and would have in place a modern telecommunication system, it appears others have moved even faster. I welcome the Bill on the basis that it is an attempt to close that gap.

I pose two questions in regard to the Bill, namely, will it help us to become more competitive and will it create more competition in which I am a great believer? I come from a background where competition is crucial. When I observe the changes that have taken place in other businesses, I examine this area from that point of view.

We first began passing laws to regulate the communications sector in 1997, ten years ago, and our history has been consistent across our successive attempts to control this sector, namely, we have been too timid, too shortsighted and too unaware of the vast importance to the nation of what we were dealing with. Today we are paying the price for what I regard as those shortcomings over those years.

In our approach to regulating communications we have been slow to realise this is not only a commercial matter of simply holding the ring between rival commercial interests and seeing that fairness is guaranteed between them. That is not enough. I spoke on this area ten years ago. That was a fair description of the approach taken in the first of these Acts, namely, to be fair to the different competitors. I pointed out at the time that this was far too passive a role for the State to take. I argued there was a clear public interest in how the communications sector developed in this country. It was not a matter of indifference to the State how the sector developed. I took that view because I believed then that the economic future of this country could depend crucially on the extent to which we could harness the new potential of communications to develop our role in the emerging new knowledge society that is outlined in the Lisbon Agenda.

My belief has proved to be right. If anything, I underestimated the importance the sector would have. However, my views were not listened to in 1997 and, as a result, we were saddled with legislation that proved ineffective in regulating the communications sector. From the beginning it was clear that the regulator had not been given a proper hand to deal with it. In terms of the legislative powers at his disposal, he had a great difficulty. This weakness was immediately recognised by the commercial players involved who engaged the regulator in a long series of lawsuits that were designed to challenge his regulatory powers and to confine them as much as possible.

Many court decisions went against the regulator, but that was not the fault of the regulator or the courts, rather it was our fault in that weak legislation was the cause of that problem. The result has been that the communications sector in this country has been run for the past decade entirely from the viewpoint of the short-term commercial interests of the players involved. The national interest has not got a look-in, rather it has been blatantly ignored and perhaps defied on many occasions.

Nowhere has this been more true than in the roll-out of broadband. It is clearly in the national interest that this should have taken place long ago. Some other countries have done a much better job and we are very far behind them in this area.

Photo of Brendan RyanBrendan Ryan (Labour)
Link to this: Individually | In context

Hear, hear.

Photo of Feargal QuinnFeargal Quinn (Independent)
Link to this: Individually | In context

That is one of my main criticisms of what went wrong in those years. The fact that we have not managed the roll-out of broadband and that we still languish at the bottom of the European league table of broadband penetration is entirely due to the ability of the commercial interests involved, in particular Eircom, to go their own sweet way in clear defiance of the often repeated wishes of the political leadership of this country and in clear denial of the national interest in the matter.

Photo of Brendan RyanBrendan Ryan (Labour)
Link to this: Individually | In context

Hear, hear.

Photo of Feargal QuinnFeargal Quinn (Independent)
Link to this: Individually | In context

That happened over those years. Let us not waste time blaming Eircom or others like it. It has only been doing what private sector companies always do, namely, looking after the interests of its shareholders. I have got great support from Senator Ryan on this. He does not hear me say those words often.

Photo of Brendan RyanBrendan Ryan (Labour)
Link to this: Individually | In context

They do a better job of looking after their own interests than the State does of looking after ours.

Photo of Feargal QuinnFeargal Quinn (Independent)
Link to this: Individually | In context

That is exactly how it should be. The real people to blame in this matter are we, the legislators, who allowed this to happen by the laws we enacted ten years ago. If we did not foresee what would happen back in 1997, we have had ample opportunities since then to see the error of our ways. Despite this, we have been very slow to do what is necessary to impose our will in this area, even with all the support we have had from Brussels and the direction it has given us.

The stark fact remains that the sector has operated as it has for the past decade. If we wish the communications sector to be run in the national interest, as it is our right to do, then we must assume the powers to make that happen. To whatever extent this Bill represents a step in that direction, which is desirable, and I am not sure exactly how far it does go in that respect, it must be welcomed, however belated its arrival.

I have a number of questions for the Minister of State which I hope he will be able to answer. Will this legislation deliver competition which we have not had up to now? With the best will in the world, is there a danger the heavy penalties provided for in the Bill will act as a disincentive to competition? Will those operators considering joining this race, which should yield them high profits, find the heavy penalties provided for in the Bill a disincentive to do so? I have always had a difficulty trying to explain to myself and others how the electricity system works here where the ESB is the power provider as well as the retailer. That is similar to a case where a large supplier in the business I have experience of is a manufacturer and also a retailer. How do we make sure that such a system can work? Is there fair competition if the producer of a product is also the retailer which deals with the customer? In this case Eircom seems to be the network as well as the retailer. Does Eircom have a view on this? It is such a large player in this area that we must know the direction it intends to take. Is it enthusiastic about splitting and separating what it does? It is difficult to understand how that system can work if the network and the retailer is the same operator.

Senator Kenneally referred to the system of emergency calls, which the Minister of State also mentioned. I was not sure how the system worked in the past but I gather Eircom is not terribly enthusiastic about maintaining it because it involves a considerable cost. From my reading of the Bill I assume that some effort is required to put this right to ensure we have an effective and efficient emergency system, which luckily I have not had to use too often. If the system is operated by only one of those retailers and it is not terribly enthusiastic about doing so, perhaps that explains why we hear complaints about the emergency system not working nearly as effectively as it should.

A provision covering whistleblowers is also provided in section 7, which is worthy. However, if we include a provision for whistleblowers in the communications sector, does that mean a similar provision must be included in every Bill introduced? If so and if we have to wait 10, 20 or 30 years before it is implemented, is it worthwhile considering the introduction of whistleblower legislation to cover every area to ensure we do not have to remember to include a similar provision in every Bill introduced, given that there may be areas of society not covered by legislation?

My last question is on broadband. I have been impressed by the progress made in this area in other countries. I am mindful particularly of Singapore, which identified many years ago that it wished to be the hub in Asia, and perhaps even of the world, for handling the knowledge society. It did that by giving every citizen an e-mail address. Have we taken the right steps in that sector in this country? Have we identified that Ireland could be a similar centre for Europe or the world? We are so far behind other countries that we have ended up at the bottom of the league table. Is there a danger that it is too late? I do not believe so because technology moves so fast that sometimes it is useful to come in behind the others. We may not be burdened with the old equipment and we can buy the modern equipment.

These are some of my concerns. I am confident the Minister has looked at this and that his objective is the same as that of all of us. However, I remember ten years ago when many of us clearly stated that the objective was not just to be fair between different competitors in this market, but actually to encourage competitors to come into the market in the first place. It is not just a question of being fair. It might have been better not to privatise something if the only objective was to make fairness the only common area between different competitors. In such cases, there might be other ways of doing it. In this case, it is right that we encourage competitors to come in. We encourage fairness between them, but we also make sure that competition gives us the sort of service we want in Ireland. That service may mean broadband only, broadband or emergency services, or it may mean that we get an advantage in a competitive marketplace to take the lead in this world. I welcome the Bill inasmuch as I understand it is an effort to go in that direction, and I wish the Minister well.

Photo of Mary WhiteMary White (Fianna Fail)
Link to this: Individually | In context

I welcome the Minister of State to the Seanad and the progress of this Bill through the Houses. This Bill will allow ComReg to facilitate increased competition in the Irish telecommunications market, a goal of which I am very much in favour. Increased competition will enhance the provision of vital telecommunications infrastructure and should result in lower prices and greater choice for consumers. It should also encourage greater uptake of broadband across the country. Like Senator Quinn, I know that competition is the driving force in change and innovation. Competition is critical because nothing will improve if we do not have it in every area, including in elections to the Oireachtas. I wish the Minister of State success in the forthcoming general election.

Even though broadband uptake is increasing, it is nowhere near the level we should expect of a country as rich as Ireland. In its broadband telecommunications benchmarking report for 2004, Forfás ranks Ireland in first place in international broadband connectivity. This means Ireland is ahead of Denmark, Luxembourg, the Netherlands, Sweden and France. International connectivity means the ability of a broadband user to connect to users in other countries through international broadband networks. At the launch of the 2004 report, Adrian Devitt, senior policy analyst at Forfás, stated that this is why we can attract companies such as Google and eBay. Broadband is critically important for multinational or indigenous companies that are producing goods for export, since the ability to move information is as important as the ability to move goods. For small businesses and households, broadband promotes IT skills and increases productivity in the economy. I have wireless broadband at home and it is a great pleasure to move my laptop all over the house with no wired connections. That encourages people to use it more often. It is quick and fast and there is no big deal about it.

Martin Cronin, chief executive of Forfás, stated last November that broadband services are critical for the attraction of foreign direct investment, for the development of indigenous industry and for the promotion of the knowledge economy. The increasing importance of services to the economy, particularly those structured around electronic transactions and information flows, makes it essential that Ireland has access to reliable and cost-competitive communications services. The broadband benchmarking update, also produced by Forfás last November, highlighted the need for increased competition in the sector. Countries with the highest broadband take-up rates are those that have competitive markets for the supply of broadband services. The protection and promotion of competition that will be ensured by this Bill is to be welcomed wholeheartedly. I sincerely hope the Bill heralds a new era for telecommunications in Ireland.

Photo of Brendan RyanBrendan Ryan (Labour)
Link to this: Individually | In context

Cuirim fáilte roimh an Aire Stáit. Tá súil agam go bhfuilimid ag druidim i dtreo an deiridh leis an bpraiseach atá déanta ag an Rialtas seo don bhonneagar teileachumarsáide.

ComReg is toothless and I always wondered why. We knew it was toothless because we could all see it. We saw it when Citibank encouraged people to buy Eircom shares about two years ago, citing Eircom's ability to get around the regulator. It is beyond me why we did not sit up and take notice of such a statement by an international adviser. ComReg is also indifferent to consumers. Its willingness to deal with individual consumer complaints is not impressive. Its unwillingness to deal with such complaints is what one would notice. An example is the recent controversy involving NTL in Dublin, in which ComReg apparently claimed it was not its problem.

The cable component of our telecommunications system is in a mess. It is mostly used in television, but it should be used for so much more. There is an extraordinary variation in provision and price from region to region, yet ComReg apparently felt it did not need to worry about such a variation. Why does it cost more to have a basic digital television service in Cork than it does in Limerick or Dublin? I keep asking officials from ComReg and they tell me that there are some mysterious factors at work. They have tolerated poor customer services from cable companies and from Eircom. They have also tolerated bullying tactics.

I availed of a low-cost option for international calls, which did not mean leaving Eircom. When I registered with a company to do this, I promptly received a letter from Eircom telling me I had left its service. I knew I had not left Eircom and I was not going to leave Eircom because it is far too complicated. The letter informed me that I would not be receiving any services if I had problems with my line as I had abandoned Eircom. I wrote to ComReg and I was assured that ComReg officials were in touch with Eircom and that Eircom was sorry about the mistake. When I telephoned Eircom, I was told it was definitely not a mistake, but I could not be informed of what company I had chosen as that was confidential. I chose a new provider but Eircom would not tell me the name of the provider I had chosen. Eircom would only put me through to someone who, for a fee, would re-establish my connection with Eircom. It was rip off upon rip off and it was organised and planned.

ComReg eventually succeeded in getting Eircom to sort it out and I was told by ComReg that Eircom was sorry. I wrote to Eircom, but I have not received an acknowledgement from the company of its high-handed attempt to frighten me into paying money for something I did not need to pay for. Having listened to the Minister of State, I now know why and I will come to that.

However, I want to return to the issue of cable television. We pay one licence fee per household, no matter how many televisions are in the house. However, there is a rip off in Cork where cable television viewers are charged extra for multi-room viewing. I have no idea why that is the case. The signal does not break down or dilute because one has it in two rooms instead of one. It is a rip-off and an abuse of a local monopoly. If ComReg was any good, it would not allow the service providers to do such things. Instead, it stands back and leaves them alone. We are all familiar with the universal complaints about customer service. One of the problems is that most of these companies no longer have a physical base, such as an office. One cannot visit the headquarters of these organisations because there is no such place — they exist somewhere in cyberspace. Judging by the universal accent I hear every time I deal with Eircom, I am convinced its call centre is entirely staffed by people from Asia, or based in Asia. That would not be a problem if the service were any good, but it is not, through no fault of those at the other end of the telephone line.

The provision of cable broadband services is a basic requirement. Ireland is unique because of the extent to which cable has been installed in its urban areas, probably as a result of the demand for British television 20 years ago. All of our domestic areas should be able to avail of the highest quality cable broadband services because we got started early. The cable broadband that is on offer is slow by the standards one would expect nowadays. It is limited and it is expensive. ComReg's toothlessness has made it unable to do anything about the limitations and expensiveness of the broadband service. When one reads the stuff on its website, it is clear it is too obsessed with complicated technical issues relating to spectrum allocation, etc. It has not really got around to focusing on consumers. The astonishing manner in which it rolled over and allowed Eircom to impose increases in the cost of line rental does not do it any credit. Why should it be getting more and more expensive to rent a fixed line? It is dreadful that increases were sanctioned to give Eircom a little boost in the one area it controls, after it was squeezed out on the call side.

I have picked up on one extraordinary thing throughout my dealings with ComReg. It seems the regulator starts from a position of accepting the bona fides of the companies it is regulating. It presumes the people with whom it is dealing are nice guys who need to be brought into line. A means of regulating the communications sector was developed as a recognition that those involved are not nice guys — they are out to make as much money as they can, using whatever legal ways they can. I do not suggest for a second that such people behave illegally. They try to maximise their profits in a legal manner, which is what their shareholders expect them to do. It would be naive to expect patriotism from telecommunications companies, but such naivety is widespread and extensive.

The private telephone monopoly that was established when Eircom was privatised is regulated with such a light touch that Eircom, when it was a publicly quoted company, could boast throughout the world about its ability to defy the regulator. ComReg was established to prevent the abuse of that monopoly, but it has failed to do so. The legislation that was used to establish the regulator continues to be inadequate, five years later. The process of defending consumers, which involves going to the High Court to make people do certain things, seems to be the most incredibly tortuous way of providing the most straightforward services, such as roads and water, to consumers, who should be able to take them for granted. There are many problems in our local authorities, but at least they are able to provide water and sewerage services — the ESB provides electricity connections — when new housing estates are built. People tell me it is increasingly difficult to get a telephone line installed or repaired. It is the privatised monopoly that is causing the biggest problems.

I would like to respond to some aspects of the Minister of State's speech. I could make a speech about the broadband mess, which is the only way to describe it. The ideology that competition can solve such problems is probably driven by the Department of Finance. First year economics students could tell one that real competition exists if there are so many players in the market that the departure of one participant would not affect the market. It is probably impossible to get a sufficient number of players in the telecommunications market. I have no problem with maximising competition, but the belief that it will lead to the provision of broadband in Castletownbere and its hinterland is nonsense. In a country like Ireland, which has a fairly substantial population outside its major towns and cities, universal access to high-quality and high-speed broadband cannot be achieved without the State involving itself in the market.

When one listens to the Minister of State, Deputy Browne, one wonders on what planet people are living. While I do not want to quote too extensively from his speech, I would like to comment on some revelations about the nature of Irish society which seem to have dawned on the Government. The Minister of State said that "both ComReg and the European Commission have cited the lack of strong enforcement measures as an obstacle to the implementation of the regulatory regime". How many speeches on enforcement, in areas like drink driving and speed limits, etc., have been made in this House in the past 20 years? We have finally realised, five years after the establishment of ComReg, that organisations of that nature will fail if they are not given strong enforcement powers. Words rarely fail me, but we are getting close to itnow.

The Minister of State stated baldly that "the regrettable fact remains that some of the major operators either do not provide data for some quarters or fail to supply any of the data that ComReg requires". That sounds like cowboyism. The major participants in the market have been given something that is a privilege, particularly in the area of mobile telephony. They are allowed to use the radio spectrum, which is a limited resource. They have responded by telling the State regulator to get lost. They do not tell ComReg what it wants to know. I started to wonder about the country when I read an astonishing statement in the Minister of State's script. I refer to his announcement that ComReg "is planning the introduction of a fully automated data capture system that will allow operators to submit data online." It seems it is impossible to submit data on-line to the regulator of our telecommunications system, which is supposed to be ensuring the whole system is modernised. I presume one can submit data in paper form only. If the communications regulator has not yet enabled itself to be communicated with electronically, what does that say about the vision within that organisation? Such complacency suggests to me that the whole thing is a mess.

I was glad to hear Senator White quoting my classmate in college, Mr. Martin Cronin, who is now the chief executive of Forfás, about the need for broadband services. I am sick of talking about the need for broadband. This country's failure to provide such basic infrastructure is its biggest problem. The American Chamber of Commerce Ireland has stated bluntly that 40% or more of its US executives do not want to hold meetings in Ireland — they think it is too difficult to get around this country because of the state of its roads. It has said the absence of a reliable——

Photo of Ann OrmondeAnn Ormonde (Fianna Fail)
Link to this: Individually | In context

Senator Ryan knows that is not true,

Photo of Brendan RyanBrendan Ryan (Labour)
Link to this: Individually | In context

That is what it has said. The member businesses of the American Chamber of Commerce Ireland employ 100,000 people. In the businesses' submission to the Government on the national development plan, they pointed out that more than 40% of their US executives did not want to come to Ireland for meetings. They mentioned broadband again and again. Given that this small country has a small population and is not short of money at present, why can it not sort out its infrastructural problems? The revelations about telecommunications which have dawned on the Government——

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Cork East, Fianna Fail)
Link to this: Individually | In context

The Senator is not being very positive.

Photo of Brendan RyanBrendan Ryan (Labour)
Link to this: Individually | In context

——have come about five years too late.

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Cork East, Fianna Fail)
Link to this: Individually | In context

He is running down the country. His negative talk does not help at all.

Michael Finucane (Fine Gael)
Link to this: Individually | In context

I call the Minister of State to order.

Photo of Brendan RyanBrendan Ryan (Labour)
Link to this: Individually | In context

Who set up a telecommunications regulation system that had no enforcement powers? I did not do so, the Government set it up and it takes five years for it to dawn on the Government that if the telecommunications sector is to be regulated, the regulations must be enforced. I am not being negative; I am pointing out the fact. International competitiveness reports, mostly from the World Economic Forum, state that one factor showing deterioration in Ireland is the capacity of the Government to respond flexibly and rapidly to new situations. This is as good an example as one could ask for.

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Cork East, Fianna Fail)
Link to this: Individually | In context

I fundamentally disagree.

Photo of Brendan RyanBrendan Ryan (Labour)
Link to this: Individually | In context

Slow, late and inadequate is the only way to describe it. Our telecommunications infrastructure is a mess. We should be looking to what telecommunications will be like in 20 years' time instead of being last behind places like Estonia and Hungary and wondering why modern telecommunications and other industries are moving to those countries rather than staying here.

We go on about cost competitiveness, which I acknowledge is not unimportant, but there are all sorts of factors entirely within the Government's hands and one of those is telecommunications infrastructure. From the series of astonishing admissions in the Minister of State's speech, we know what the problem is. A private sector quasi-monopoly has been bullying ComReg for four or five years, doing what it liked, and unable to be dealt with. It is now whingeing to people about the possibility of significant penalties. This is the core of the matter.

I know that some people in the Government share my view that it was a mistake to privatise the infrastructure and the solution ought to have been to keep the telecommunications infrastructure in public ownership and to privatise the service providers. That is my view. To see the classic and ultimate example of what the private sector does when it has an infrastructure monopoly is to go out to the WestLink any day of the week and watch the most glorious rip-off the State has ever invented. It is a bad service at an exorbitant price making enormous amounts of money and which will have to be bought out at a cost which will nearly equal the cost of the tribunals which worried so many people on the Order of Business this morning.

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Cork East, Fianna Fail)
Link to this: Individually | In context

Can ComReg do anything about that?

Photo of Brendan RyanBrendan Ryan (Labour)
Link to this: Individually | In context

The Government can.

Photo of Michael AhernMichael Ahern (Minister of State, Department of Enterprise, Trade and Employment; Cork East, Fianna Fail)
Link to this: Individually | In context

The Senator is jumping around from one issue to another.

Photo of Brendan RyanBrendan Ryan (Labour)
Link to this: Individually | In context

I am not referring to the roads but to the inability of Government to react quickly and flexibly and to see where the world is going. The Government believes that the old model is the new model but the old model is out of date.

I am more than a little worried about the emergency service. I can understand the Government's position in this case as Eircom, apparently, does not regard itself as having any public service obligations and it is trying to get out of those that it has. Given that the same agency which is supposed to be responsible for the quality of cable television services, the customer service quality of the mobile phone services and many other services, will now take responsibility for the quality of the emergency service, people have cause to be nervous in terms of customer service.

This is a welcome Bill and would have been a lot more welcome four years ago when it was needed. At the core of the Bill is the belief that there is some mythological form of competition which will miraculously and suddenly give us all high quality broadband. I repeat that it will not unless somebody and the State takes charge. I do not care whether this is a public private partnership——

Senators:

I have allowed the Senator some latitude.

Photo of Brendan RyanBrendan Ryan (Labour)
Link to this: Individually | In context

I will conclude. The legislation is welcome and complicated and the penalties are proportionate in terms of the apparent abuses that have been going on. I hope it passes through both Houses reasonably quickly and is enforced with the vigour it deserves.

1:00 pm

Photo of Ann OrmondeAnn Ormonde (Fianna Fail)
Link to this: Individually | In context

I welcome the Minister of State to the House. I have listened to Senator Ryan's contribution. While I like the Senator as a person I would hate to sit down to table with him because of his doom and gloom and negative thinking. In his view, no matter what the Government does, it is wrong. I do not understand that approach.

Extra powers are being given to the consumer. The telecommunications regulator, ComReg, will provide additional powers to the consumer. For too long the consumer has not had sufficient influence when it comes to interacting with telecommunications companies. The consumer has had very little option when it comes to complaining about the services or about price. I hope the Bill will change the situation. I ask the Minister of State to reassure Senator Ryan that the Bill will give power to the consumer. Listening to Senator Ryan, one would think that the Bill is a non-starter.

The Bill will give ComReg the power to investigate, to prosecute breaches of competition law, such as abuse of a dominant position or price fixing. This set of powers will have implications for all the main telecommunications companies, particularly those operating in the fixed line business. The most dominant player in this system is Eircom which, according to the most recent figures, had a 72% share of the overall fixed line market in the third quarter of 2006. In this time of open competition this is a very high proportion of the telecommunications market.

All but 28% of fixed phone lines in the domestic and business sectors and Internet and broadband and fax connections are Eircom lines. The next five companies only make up 20% of the entire market share. There will never be fair competition in that kind of market place and the dominant players could abuse their position and engage in price fixing. The Minister and his Department have correctly realised this kind of situation could not be allowed to continue and is the reason this Bill is vital for the telecommunications infrastructure of the country.

Telecommunications companies will face fines of €4 million or more if they fail to comply with the rules laid down by ComReg. This level of fine will make the companies involved take notice and should help to drive competition, generate more movement in the market and ultimately protect consumers. ComReg will effectively have the same powers as the Competition Authority, meaning that its bite will be just as bad as its bark. It will be able to carry out investigations following on from complaints or even on its own initiative. The regulator will have the power and influence to gather evidence and even to compel people to appear before it under oath, produce documents and other evidence and to fine and protect whistleblowers. These provisions should benefit the consumer and ensure that companies taking advantage of their market dominance becomes a thing of the past.

The Bill also gives the Minister the power to lay down regulations to bring EU directives into Irish law, a mechanism which should allow for more effective and efficient governing. This should have a further impact on opening up the market.

Overcharging and charging consumers for services they do not want and failing to supply services sought by consumers will also be outlawed under this legislation. The last of these points is of particular importance, given the difficulties in obtaining broadband services in certain parts of the country. The recently published national development plan also contains a number of measures in this area and together with this legislation it is hoped delays in the provision of broadband will be a thing of thepast.

While certain sections of the telecommunications sector require further improvements to meet the demands of consumers, considerable consumer successes have been achieved in the industry over the past year or thereabouts. The decision by Vodafone and other mobile telephone companies to scrap roaming changes in the North and the United Kingdom was a positive development, which has made a significant difference to business people travelling to and from the North and Britain, while also benefiting the casual telephone user calling home from trips to the North or the UK.

The mobile telephone sector appears to be faring much better now that greater competition has entered the marketplace. With four operators enjoying a significant presence, competition has offered consumers choice and payment options to best suit their needs. Nevertheless, considerable criticism is still levelled at the fact that we have the highest mobile telephone bills in Europe. While I accept the mobile telephone operators' arguments that this is due to Irish people spending longer on the telephone than their European counterparts, more should be done to reduce telephone bills. I hope ComReg will be able to take action in this area.

I am in favour of several other measures in the Bill. I agree that ComReg should have responsibility for the oversight and management of the .ie domain name. Given that the Internet and telecoms are one and the same in the digital age, it is essential that ComReg take over the management of our national domain name. I also agree that the Minister should have further information-gathering powers in the area of telecommunications. If Government wants to be effective in having responsibility for telecoms, we need to have as much information as possible at our fingertips.

Once the legislation has been enacted, a public information campaign will be needed to ensure consumers are aware of what it entails. Consumers must be informed of legislative change. I am concerned that the strong powers provided for in the Bill will not be enforced. For this reason, the regulator must monitor breaches. The provisions for the establishment of an emergency call answering service should also be supported.

This is a worthwhile Bill which will finally offer consumers protection from over-charging and address the dominant role of Eircom. What impact will the legislation have on Eircom's retail network? The consumer will be pleased with the changes introduced by the Bill provided he or she is informed of them. I ask the Minister to ensure the message is reinforced through a public awareness campaign.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
Link to this: Individually | In context

I welcome the Minister of State at the Department of Communications, Marine and Natural Resources, Deputy Browne, to the House and wish him well in his portfolio. I had the honour of serving in the Department of Posts and Telegraphs in 1982 before it was broken up and Telecom Éireann and An Post were formed. I was later appointed my party's spokesperson on posts and telegraphs.

I welcome the opportunity to speak on the Bill. It is important that the nation's communications providers are regulated in line with the European Union regulatory framework. It is also important to grant ComReg powers to enforce best practice and fair pricing in the communications sector. By granting ComReg increased powers to investigate and prosecute anti-competitive behaviour among communications providers, the Bill will help ensure consumers secure a better deal from certain communications providers which are ripping them off. Increased enforcement powers and powers of information gathering granted to the Minister under the legislation will result in better information being passed on to the consumer and greater effectiveness in the enforcement of other provisions of the Bill.

The case of Eircom illustrates the reason the Bill is necessary. Since deregulation Eircom has become much less accountable, leading to complaints of poor service and unsatisfactory broadband roll-out. This problem must be investigated and resolved. The investigation and enforcement of communications providers' responsibilities to the consumer must be addressed. I hope the Bill marks a step in the right direction.

Eircom has indicated it will not continue to provide the emergency call answering service it and its predecessors provided in the past. It has been suggested that this service be put out to tender. Does this mean that essential life or death services such as 999 calls will be offered for tender? If a provider is found for the emergency service, will steps be taken to ensure sufficient operators are available to answer life or death telephone calls?

I pay tribute to the work of the former Department of Posts and Telegraphs. Under the old system, before automation, telephone operators provided an excellent emergency telephone service to the public. What system will be in place to ensure private providers do not attempt to cut back on emergency call answering services? There could be unthinkable consequences if this matter is allowed to slip by without proper public debate.

Recently, it has come to my attention that mobile telephone providers have been placing essentially hidden fees on customers' accounts. These roaming fees are another example of the hidden costs of rip-off Ireland and exploit customers' lack of knowledge of the ins and outs of call charges. Before discussing the role of Vodafone, I will declare an interest. As a result of my shareholding in Eircom, I have become a small shareholder in Vodafone, from which I receive a small dividend. I also pay high charges to the company. Vodafone's roaming fees are ludicrously high for customers visiting other countries. If one is not careful, one could find oneself paying €15.90 to receive a ten-minute call in Britain or Northern Ireland. To secure an exemption from roaming charges, one must, ostensibly, inform Vodafone before travelling abroad. I do not believe this facility exists. While Vodafone is the worst offender in this regard, it is also unacceptable that a similar service offered by Meteor costs up to €9.90.

According to recent figures, Vodafone has 2.17 million mobile telephone customers, many of whom travel abroad for business and leisure. They are being ripped off by mobile providers' excessively high roaming charges. The company, the largest mobile operator in Ireland, is abusing a captive market. Mobile telephone users do not receive a message informing them how much they must pay when taking or making a call in other countries. Bill payers receive a shock when their statement arrives. While abroad, public representatives pay for the privilege of receiving calls from constituents seeking information on issues of concern.

Pay-as-you-go customers will only find out what they have been charged for calls made while abroad when they run out of credit. These hidden costs must be stamped out or made obvious to customers. No one knows how much it costs to receive a call. Given that mobile roaming fees vary widely, it is important to shop around and inform oneself of what is involved. The www.callcosts.ie website, established by ComReg, provides full details about the hidden costs of mobile telephones, broadband and home telephone services. While I commend the regulator for taking this step, not everyone has access to a computer or time to research the cost of calls.

The Bill addresses important issues, while also raising new questions. The hidden fees charged by telecommunications providers should be investigated. This is comprehensive, timely and necessary legislation which I hope will become law shortly. When the Opposition parties were in Government, they gave away——

Senators:

We are about to have a history lesson.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
Link to this: Individually | In context

Senators are required to be reserved while in the Chair.

Senators:

It was hard to resist making a comment.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
Link to this: Individually | In context

The 1982-87 coalition Government gave away our rights to satellite broadcasting to Atlantic Satellites, a £1 shelf company. This happened in advance of the advent of satellite broadcasting at its current levels. Ireland was allocated a slot over the Indian Ocean which was a footprint into all of Europe, including Britain and Ireland. Nobody seems to be able to locate the relevant file in the Department. I was not in the Department after that period, so I could not research the matter but it is on the record and I have a good recollection of it. A fellow countyman of the Minister of State, a Mr. Stafford from Wexford, was the main promoter of Atlantic Satellites at that time. It was a shelf company.

Senators:

Mr. Stafford cannot defend himself.

Photo of Terry LeydenTerry Leyden (Fianna Fail)
Link to this: Individually | In context

Before Sky got off the ground, we had an opportunity to have our own footprint over Europe, yet we blew it. We threw it away and I regret that very much. It is possibly a historical point of view but these were important allocations to our country. We are currently at the cutting edge of the communications sector in which a large number of jobs are being created. The roll-out of broadband is vital in this regard.

Perhaps the Minister of State could outline the situation concerning broadband. I cannot understand how, as most towns have now been ducted, we are getting wireless broadband instead of ducted systems. Perhaps the major contributors are getting broadband through the ducted system. Work has been carried out in most towns to install broadband facilities but I do not see much benefit coming from it due to recent changes in technology. A large degree of broadband penetration is vital for the development of this country. We should be at the forefront in thisregard.

I commend the Bill to the House. I wish the Minister of State well in his Department. It is an exciting one in which to work because it covers a wide variety of interests. It is important to have a watchdog for consumers' interests.

Photo of John BrowneJohn Browne (Minister of State, Department of Communications, Marine and Natural Resources; Wexford, Fianna Fail)
Link to this: Individually | In context

I thank Senators for their contributions to this debate. I welcome the opportunity to respond to the various comments and observations made on the provisions of this important Bill. Of course, I will ask my officials to see whether they can find the missing file Senator Leyden mentioned, particularly as it refers to a Wexford man.

As Senators have agreed, the Bill is necessary to ensure that the independent regulator, ComReg, has the tools required to ensure that the electronic communications sector is open and competitive, and that individual and business consumers benefit from increased choice and lower prices for the services they need. As I outlined in my opening statement, the Bill contains a number of provisions designed to achieve this objective. In this regard, sections 11 and 15 are particularly important. I note the general support of the House for these provisions. Effective investigatory and enforcement powers are essential if ComReg is to carry out its function of ensuring compliance by all operators with their obligations under the regulatory framework. I welcome the support from Senator Finucane and others for the measures proposed in the Bill. It is important to get the legislation right. Broadband was slow to take off but approximately 500,000 people are now availing of it and 31% of households have broadband.

A number of Senators referred to the level of fines provided for in the Bill. Fines of up to €4 million, or 10%, of turnover apply only to serious non-compliance within the framework, that is, to a very limited range of offences. In fact, this will help rather than hinder competition. New players will know that big operators with large market share face serious penalties if they do not play ball concerning their obligations.

The telecoms sector is mainly subject to private sector investment and naturally these firms will only invest where they get a return. The Government has invested, and will continue to invest, in order to promote regional broadband initiatives, including the MANs system and the proposed national broadband scheme, which will bring broadband to under-served areas. We are all aware that in certain areas of the country it is difficult to get broadband and consequently the private sector will not go there. It is important for the Government to continue to fund broadband initiatives in such areas.

Senator Finucane raised the issue of Smart Telecom. I understand that ComReg has a protocol to deal with this type of situation should it recur. The provisions under Part 4 — giving ComReg powers under the Competition Act to investigate and prosecute anti-competitive behaviour and abuse of dominance, together with its increased investigative and enforcement powers — give ComReg an effective set of regulatory tools that will have an appropriate deterrent effect on the industry and encourage compliance.

Senator Quinn referred to shortcomings in the Irish communications sector and the contributions made to these shortcomings by the weakness of the regulator's powers. This Bill is designed to ensure that ComReg will have the necessary powers to address these shortcomings as well as ensuring competition in the market and providing a better service for consumers. Senator Finucane referred to the development of networks and access to them. The Bill's provisions will ensure that ComReg can provide access to those networks for operators who require it, and particularly to those networks belonging to dominant players in the market. This will encourage operators to invest in improving the services they provide to their customers. It will also result in a more competitive and responsive communications sector. These issues were raised by Senators Finucane and Kenneally who cited examples in support of their remarks. I hope the Bill will deal effectively with the matters they raised.

I welcome the input by Senator Ryan. Under the Communications Act 2002, ComReg is obliged to promote the interests of customers. The Minister for Communications, Marine and Natural Resources, Deputy Noel Dempsey, is always anxious that the interests of customers should be promoted.

I understand that the National Consumer Agency has engaged with NTL on customer service issues. I am glad Senator Ryan welcomes the level of fines proposed, which will improve the competitive position in the industry. I also welcome the support from Senators Kenneally, White and Ormonde on a number of issues raised in the course of debating this legislation.

The provisions of the Bill for the establishment of an emergency call handling service and the regulation of the .ie domain name are extremely important measures. A number of Senators referred to these measures and I welcome their support for them.

I thank Senators once again for their contributions to and interest in the Bill. I welcome the support of this House for its provisions. I look forward to Senators' early consideration of the Bill on Committee and Report Stages with the overall objective of placing it on the Statute Book as early as possible. I wish to thank my officials for their support and all the work they have done to enable me to bring this legislation before the House. I look forward to the Bill's early passage through both Houses.

Question put and agreed to.

Committee Stage ordered for Tuesday, 20 February 2007.

Sitting suspended at 1.20 p.m. and resumed at 2 p.m.