Seanad debates

Wednesday, 27 January 2010

Communications Regulation (Premium Rate Services and Electronic Communications Infrastructure) Bill 2009: Report and Final Stages


12:00 pm

Photo of Paddy BurkePaddy Burke (Fine Gael)
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I welcome the Minister for Communications, Energy and Natural Resources, Deputy Ryan, to the House. I remind Senators that they may speak only once on Report Stage, except the proposer of an amendment, who may reply to the discussion on the amendment. Each amendment must be seconded. Amendments Nos. 1 and 2 are related and may be discussed together by agreement. Is that agreed? Agreed.

Photo of Michael McCarthyMichael McCarthy (Labour)
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I move amendment No. 1:

In page 8, between lines 36 and 37, to insert the following:

"(2) It shall be a condition of a licence under section 6 that—

(a) the premium rate service provider shall ensure that any service of an ongoing nature may be readily terminated by the user at any time, and in the case of a service provided by SMS, the user may terminate the service at any time by sending "stop" in reply to any SMS received,

(b) where a premium rate service provider fails to comply with paragraph (a) in any particular case, he or she shall refund the user in accordance with and subject to regulations under subsection (1) and shall pay the user compensation in accordance with and subject to such regulations.".

I welcome the Minister and his officials back to the House. As we said earlier on Committee Stage, the spirit of these amendments is to protect consumer interests. We are aware that, unfortunately, certain operators take advantage of people. Everyone has a mobile telephone and many people have two. Unfortunately, some people do not have the level of knowledge one would assume to subscribe to such services. For a variety of reasons, sometimes unwittingly, people might end up subscribing to a service and not discover that is the case until such time as the telephone bill arrives or their credit has been swallowed up.

In the context of amendment No. 2, in cases where that happens - the Minister is correct when he says we all know people who have been affected by it - one will not break the bank in terms of the amount of money concerned but, generally speaking, it is a wrong and if that is the case, it needs to be righted. If people are being treated in this manner, they need to be compensated by those responsible for the injustice in the first instance. All too often people can be lured into such arrangements, for example, to a weather alert or traffic alert system, and one might reasonably expect to be contacted once because of the requirements of a journey on a particular day. One might subsequently discover when a bill arrives that one has subscribed to a daily service at the cost of €1 plus VAT for each alert. The amounts concerned are not insignificant. When such a scenario arises, people should be compensated. A mechanism needs to be put in place to allow a swift cessation of any such activity.

Paragraph (b) of amendment No. 1 states, "where a premium rate service provider fails to comply with paragraph (a) in any particular case, he or she shall refund the user in accordance with and subject to regulations under subsection (1)". That is fair and reasonable.

Photo of Paudie CoffeyPaudie Coffey (Fine Gael)
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I second the amendment. The two amendments seem reasonable and the Minister might explain to us whether he believes they are not reasonable. The statistics show that premium rate services on fixed line and mobile devices have grown sixfold from one year to the next and were worth €195 million to the industry last year. Some 76 million chargeable premium text messages were sent in 2008. Taking all of that into account, there are obviously vulnerable categories of people who have mobile phones and who may genuinely look for information from some of these service providers but may find it difficult to get out of the contract they enter into with them.

Amendment No. 1 is simple. It obliges the service provider to stop the service if the user sends the word "stop" in a text message from the user's mobile phone. This is the system that is used already. I do not see any reason it should not be enshrined in the licensing arrangements to oblige the provider to stop the service once it has been instructed to do so by the user. Perhaps the Minister has another mechanism in mind that might clarify this or put into effect the spirit of this amendment to give more comfort to consumers that when they want to stop a premium rate service, which is quite expensive and can build up over time, there is a mechanism that obliges the service provider to do so when instructed. That is the spirit of the amendment, which the Minister might address.

As regards compensation, I understand the Minister has allowed for fines of up to €250,000 but there needs to be clear sanction in this area and consumers need to know there is such sanction where the service they are being sold is being abused, or if they are being defrauded or misled in any way. The levels of sanction must be clearly in place. Where fraud or abuse of the system is found by those in authority - either ComReg or another authority - there should be some level of compensation over and above a normal refund.

I quoted the statistics for a reason. This is now a huge business and it will grow exponentially in the years ahead because mobile telephones and devices are becoming more accessible. The applications that are on them now are such that one could run a laptop from a mobile phone. Premium rate services will be offered on these mobile devices so it is important we use this opportunity to regulate this area so people cannot be defrauded. Where they are defrauded, we must ensure there are good compensation measures, and when people instruct the service provider to stop, we must ensure the provider does so and does not continue sending premium messages. I accept this is the general thrust of the Bill, which is why we support it. There is much anecdotal evidence that where people tell the service provider to stop, it does not do so and continues to send messages and to charge users. This is the general spirit of the amendments, which I support.

Photo of Martin BradyMartin Brady (Fianna Fail)
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I agree with the points made by Senator Coffey. However, from the information I have and having worked in the business previously, I understand premium calls are a problem for many people, in particular when others use a person's phone without his or her knowledge. A disputed account situation may develop, which is a big issue. At the time I worked in the business, it was possible to bar calls to premium numbers from one's phone. I have checked this with some of my former colleagues in the old Telecom Éireann who tell me it is still the case that the customer can do this on most phones and, if not, a device can be provided to control that and ensure that if there are visitors to one's house who would not normally be there, they would not have access to those premium numbers.

Photo of Eamon RyanEamon Ryan (Minister, Department of Communications, Energy and Natural Resources; Dublin South, Green Party)
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I very much accept the spirit of the amendments but, unfortunately, I cannot accept them in this legislative form. As I stated during the debate on Committee Stage, the advice from the Attorney General is that it would not be appropriate to set out the terms and conditions of a licence in primary legislation, even if we do not disagree with the intent behind it. Section 7 empowers ComReg to make regulations specifying the class or type of premium rate service that will require to be licensed and the conditions that will attach to a licence. These conditions will include the basis and the circumstances under which refunds may be made to end users.

With regard to enabling users to terminate a subscription, this will also be a condition of the licence. The conditions of the licence are the critical issue. These may vary over time and different conditions will apply to different classes and types of premium rate service. By providing these conditions in secondary legislation, ComReg will be able to change the conditions it wishes to set by regulation. If they were set instead in primary legislation, amending legislation would be required in each instance. The code of practice to be published by ComReg under section 15 may also contain similar requirements in regard to the mechanisms for refunds and terminating a subscription service. Compliance with the code of practice will be a condition of a licence and thus enforceable by ComReg under this Bill.

In summary, while I very much agree with the intent of what the Senators propose, it is more appropriate for that intent to be acted out in secondary legislation, where there is flexibility and where it can adapt, rather than in primary legislation. We have the powers we need. I look forward to our putting them into legislation.

Photo of Paddy BurkePaddy Burke (Fine Gael)
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Is the Senator pressing the amendment?

Photo of Michael McCarthyMichael McCarthy (Labour)
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I will withdraw the amendment. I wish to refer to some aspects of the Minister's contribution. He said he cannot agree to the amendments in this legislative form. There is no other arena in which I will be successful in getting the amendment across. I recognise what the Minister has said. The spirit is there and it is about protecting the consumer. I acknowledge that he agrees with the spirit of the amendments, but as the seanchaí says, there the story rests.

Amendment, by leave, withdrawn.

Amendment No. 2 not moved.

Bill received for final consideration.

Question proposed: "That the Bill do now pass."

Photo of Eamon RyanEamon Ryan (Minister, Department of Communications, Energy and Natural Resources; Dublin South, Green Party)
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I thank the Seanad for passing what is important public interest legislation focused on protecting people who have been scammed via their mobile phone operations. This is a very real issue. It involved the largest volume of correspondence on my desk, which was often from young people who were inappropriately dealt with by commercial organisations. What we have done today is to give the State the powers to fight back to protect those consumers, which is very important.

Second, and crucially, we have given in the Bill a key development role to the development of broadband in this country, especially outside our cities, and to use the infrastructure we have, including the road network, to get fibre to every town and county. This is crucial for the social and economic development of the country. I very much welcome being able to provide that in the legislation and look forward to the relevant agencies putting it into practice and providing ducting.

I thank my officials, who have worked very hard, correctly and well in preparing the legislation. It has changed quite significantly as it has gone through both Houses of the Oireachtas, which is appropriate. We have listened to some of the concerns and ideas coming from the Opposition. I look forward to sending it on to the President and putting it into effect.

Question put and agreed to.

Sitting suspended at 3.30 p.m. and resumed at 5 p.m.