Wednesday, 27 January 2010
Communications Regulation (Premium Rate Services and Electronic Communications Infrastructure) Bill 2009: Committee Stage. `
I welcome the Minister to the House. Amendments Nos. 1, 2 and 5 are related and may be discussed together.
Government amendment No. 1:
In page 3, before section 2, to insert the following new section:
2.---In this Act---
"Commission" means Commission for Communications Regulation;
"Principal Act" means Communications Regulation Act 2002.
I apologise for my delayed arrival. Most of the amendments I hope to move are of a textual nature rather than being substantive changes. Amendment No. 1 is an example of this. We are seeking to apply the definition of "Commission" to the whole Bill rather than just Part 2, which deals with the regulation of premium rate services. The definition of "Commission" is appropriate to the whole Bill.
We have had long discussions in this and the other House on whether we should have a single regulatory agency for both telecommunications and broadcasting or separate regulators, which is the current approach. I stand by the position we have taken, while recognising that it is a point for valid discussion. I am keen that we get on and establish regulation of premium rate services. The problem is that the current body, Regtel, which is neither the communications nor the broadcasting regulator, does not have the powers that are needed. The aim of this Bill is to make those powers statutory and protect the public from inappropriate commercial behaviour. The wider issue of regulation of communications and broadcasting can be aired again on other occasions; however, I cannot accept these amendments to the Bill.
Amendments Nos. 6, 7 and 21 to 24, inclusive, are related and may be discussed together by agreement.
Government amendment No. 6:
In page 7, subsection (2)(d)(i), lines 9 and 10, to delete "the services are" and substitute "each service is".
These are minor textual amendments which have been agreed with the Parliamentary Counsel to provide consistency in the wording in section 6(2) and section 15(2). It is to ensure standardisation of language. In certain sections we have used the words "each service is" and we are seeking to standardise the terminology rather than change the meaning substantively.
I move amendment No. 8:
In page 8, between lines 25 and 26, to insert the following new subsection:
"(11) The Commission may give a direction to a network operator that is necessary or expedient for the performance of the functions of the Commission, and the network operator shall comply with the direction.".
I do not propose to accept amendment No. 8. There is a need to balance the power of the commission to regulate with the rights of the persons being regulated. The Bill, as drafted, strikes this balance. It provides the commission with the power to set conditions to a licence that may be complied with and with effective powers to deal with non-compliant service providers. There is certainty about what is expected of service providers once they are licensed to provide a service. The proposed amendment would remove that certainty. If the commission wishes to add additional conditions to a licence it may do so under regulations made by it under section 5.
I am afraid the proposed amendment cannot be accepted. In drafting the Bill consideration was given to allowing ComReg to make an order exempting classes of premium rate services from the requirements to be licensed. In order to provide for exemptions from this requirement the legislation would need to be clear about the types of service that would be exempted. In discussing this with the Attorney General's office, the advice was that from a legislative perspective it would be preferable to empower ComReg to specify by regulation which service was required to be licensed and the current provision in the Bill was suggested.
This approach also provides certainty for existing and intending premium rate service providers about the types of premium rate service for which they will require licences, and will reduce the regulatory burden on the sector. As a regulator of the sector, ComReg will be in touch with developments in the sector through its association with other regulators and its ongoing engagement with the industry; it will therefore be in a position to foresee any new developments that may lead to new types of premium rate service being offered to the public and will have the knowledge and expertise to specify in regulations the type of services that are required to be licensed.
I move amendment No. 10:
In page 8, between lines 36 and 37, to insert the following new subsection:
"(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 regret I will not be able to accept the proposed amendments. As I stated during the debate on the same amendment on Committee Stage in the Dáil, it would not be appropriate to set out the terms and conditions of a licence in primary legislation. The advice from the Attorney General's office is that the type of detail proposed in the Senator's amendments is more appropriate for inclusion in secondary legislation. To specify such detail in a Bill is neither appropriate nor desirable. Conditions of a licence may vary over time and different conditions will apply to different classes and types of premium rate service. Conditions including any requirements with regard to refunds will be set out in regulations made by ComReg under section 7 of the Bill and will also be included in the code of practice to be published by ComReg under section 15.
I thank the Minister for his reply. The system by which people terminate such messages is not too effective, and there are particularly vulnerable categories of people. For example, a person who is not up to speed with mobile phone technology may inadvertently subscribe to some type of service. There are cases, of which I am sure the Minister is aware, in which one finds all of a sudden that one's phone credit has been used up. In using a strategy such as this one still ends up connected to the service and in receipt of text messages, which is expensive. This is grossly unfair and, in some cases, sneaky. I appreciate the Minister's reply and will withdraw the amendment on the basis that I will resubmit it on Report Stage.
I refer to amendment No. 14. There is merit in Senator McCarthy's contribution. Many are not au fait with the manner in which these charges apply. We have witnessed people being taken advantage of, people who lack knowledge of services in which they are invited to participate and the costs they incur in many industries. The time has come to err on the side of the consumer rather than the supplier. I would, therefore, like the Minister to examine this issue further. With regard to banking and other sectors, an acknowledgement, apology or a refund is not sufficient subsequently. Sanctions are needed against individuals and commercial entities, in particular, which may have a policy of taking advantage of sections of society which may not be as literate as they are regarding the various services they offer and the costs pertaining to them. Sanctions would build in inhibition on the part of companies in taking advantage of people, particularly those who are vulnerable or ignorant of what they are signing up to. I would like the Minister to examine this issue. They should be sanctioned and the sanctions should be set at a level that would provide a clear disincentive for a company to do this.
I agree with both Senators on the importance of having effective sanctions and we are seeking to do this. A code is in place under RegTel but the difficulty is that it is not enforceable. We are legislating to give legal powers for that to happen both in regard to the ability to stop unwanted services and to obtain refunds. A number of sections provide for such conditions to be part of the licence arrangements and the requirements of the operator. In failing to meet them an operator will be liable to further sanctions up to revocation of its licence. We are including powers to stop the scams about which we all hear from constituents and to give them the ability to stop services they do not want, to obtain refunds and to seek redress where they have been scammed.
I take on board fully the Minister's comments. I have referred to companies which deliberately take advantage of premium rate numbers. Provision should be made for a financial sanction that would make it unprofitable for them to succumb to this temptation. A refund is not a great disincentive because the company will succeed in many instances as only one or two consumers will take up the issue with it and be refunded. The principle underpinning exemplary damages could be considered by the Minister. Perhaps he is correct that there is sufficient discouragement in the current framework but, in many areas, a significant financial penalty should be imposed as an intermediate step before revoking the licence where it has been clearly illustrated somebody following company policy deliberately decided to take advantage of a consumer.
I agree. Section 12 addresses services provided without a licence, which are unregulated, and provides for fines of up to €250,000, while section 32 provides for fines of €5,000 on summary conviction for someone who has committed an offence. These fines are necessary as a backup to the codes we are putting in place.
The amendment was agreed with the Parliamentary Counsel. The intention of the provision is that if one or more services provided under a licence is causing harm to consumers or may cause potential harm to consumers, the licence covering all services may be suspended pending an investigation by ComReg. The amendment clarifies that intention.
The amendment is not accepted. To ensure fair procedure the section provides that the licensee be notified prior to making an application to the High Court but to make the application ex parte would go against this provision. Following debate on the amendment on Committee Stage in the Dáil, I received clarification from the Attorney General's office that the notification procedure would not unduly delay an application to the court. The common law allows an ex parte application to be made where it is considered that the circumstances justify such an application. Whether provided in legislation, it is a matter for the court to decide whether to hear the application without the other party being put on notice or present.
I do not propose to accept the amendment. As a matter of policy, it is not considered appropriate that the breach of a condition of a licence should be an offence. The powers in the Bill to ensure compliance with the conditions are adequate for the purpose. The possible revocation, suspension or amendment of a licence under section 10 provides a strong incentive for service providers to be in compliance. The offence provision for operating an unlicensed premium rate service is intended to incentivise intending premium rate service providers to obtain a licence for such services.
I move amendment No. 19:
In page 11, between lines 23 and 24, to insert the following new subsection:
"(2) Where a premium rate service provider contravenes subsection (1), the Commission shall establish a speedy mechanism to ensure redress for the consumer.".
Protection of the consumer is at the heart of these amendments. Bearing in mind Senator Walsh's worthwhile contribution, it is important that we seek to protect consumers and address appropriately instances where they clearly have been taken advantage of through blatant blackguarding. I will understand if the Minister cannot take the amendments on board but I will revisit the issue on Report Stage. I do not mean to take for granted his imminent response to the amendment.
I reiterate much of what was said on the earlier amendment about the need for serious sanctions to be applied when service providers abuse their positions. I appreciate that the statistics for premium rate charges were discussed at length on Second Stage. However, I remind the House that premium rate services on fixed lines and, in particular, mobile devices represent an industry that was worth €95 million last year. In 2008 Irish people received 76 million chargeable premium rate text messages. In the last year the number of complaints to Regtel has increased by four times, from 1,700 to 6,000. It is obvious, therefore, that there are abuses. Senator Walsh is right to say we need to consider the rights of consumers. Serious sanctions need to be provided to ensure service providers do not abuse their positions or take advantage of consumers who might not be fully aware of the extent of the services they receive.
This section of the Bill sets out the sanctions that will apply to those who provide unsolicited services, overcharge unsuspecting consumers or charge for services that are not provided. The proposed fine of €5,000 is small buttons to some service providers, especially in the context of the statistics I have mentioned, which show that huge incomes are being generated. I do not suggest all premium rate service providers are abusing the system. It is obvious that the vast majority provide very good services at reasonable rates. Equally, however, it is obvious that the small number of service providers which prey on vulnerable consumers will not want serious sanctions to be put in place. That is why Fine Gael is proposing that the fine be increased from €5,000 to €20,000. If that kind of stick hangs over any service provider which intends to abuse its position, it will not hesitate about rolling back. The amendment is an attempt to protect consumers by introducing serious sanctions. It is, therefore, well worth considering and I suggest the Minister should accept it.
The amendment relates to the sanctions imposed when premium rate service providers charge rates in excess of the published amounts they stated they would charge. It could be suggested such an offence would represent a second breach of the law in this area. These charges are imposed on consumers by commercial entities. I would restrict the imposition of premium rate charges to circumstances in which money is raised by charities for good causes. However, one is allowed to impose such rates for commercial purposes. The charges in question can be exorbitant, as one can see when one watches certain television channels at night. They are excessive. They are significant multiples of the actual cost of telephone calls and text messages. A real deterrent should come into force when charges go above a certain level.
There should be a link between the extent of the fines and the moneys being generated from these enterprises. I suspect that the latter amounts are colossal. Therefore, a fine of €5,000 is probably not a great deterrent. I ask the Minister to examine the matter. I am not absolutely certain of the extent of the revenues being accrued. I suggest the fine imposed on a company should relate in some way to its overall revenue from premium rate services, as there should be a built-in deterrent. If, as I suspect, €5,000 is a minuscule proportion of what each company generates, it cannot be said to be a deterrent. Sufficient deterrents are needed to ensure the code of ethics is complied with fully. I suppose I am betraying a certain suspicion of the operators of many of these services but an element of profiteering is a feature of this industry. Although some are starting to learn more about some aspects of it, others are being exploited by virtue of a lack of awareness on their part of what precisely they are getting themselves into.
I am afraid I cannot accept the amendment, although I accept the intentions of the Senators who tabled it. With regard to amendment No. 19, I remind the House that a mechanism for speedy resolution is provided for in section 44 of the principal Act which states that if a person or company which is alleged to have committed an offence remedies it "to the satisfaction of the Commission" within 20 days of being notified of the alleged offence, the matter giving rise to that offence will not result in prosecution. If the person or company wishes to have the matter remedied without being prosecuted, they will have to repay the amount owed and make a further payment of €1,500 to the commission. That mechanism applies to all summary offences under the principal Act. It will also apply to this Bill when enacted.
I take the Senators' point about the importance of putting strong measures in place to deter companies from engaging in fraudulent activity. A range of measures, from fines to the revocation of licences, is available. I will consider what the Senators have said and come back to them at a later stage. The existing system has been designed to take account of the revenue flows in this sector. The implications for businesses of not only having to repay money, but also having to pay fines are significant. There is also the backup threat of having one's licence discontinued. If one operates without a licence, one can face fines of up to €250,000. I suggest the various stages of this process offer a certain protection against fraudulent behaviour.
I move amendment No. 20:
In page 11, subsection (2), line 26, to delete "€5,000" and substitute the following:
"€20,000 and shall be obliged to re-emburse any or all end users in full as appropriate under subsection (1)(a), (b) and (c)".
The Dail Divided:
For the motion: 27 (Dan Boyle, Martin Brady, Larry Butler, Ivor Callely, James Carroll, John Carty, Donie Cassidy, Maria Corrigan, Déirdre de Búrca, John Ellis, Geraldine Feeney, Camillus Glynn, John Gerard Hanafin, Marc MacSharry, Lisa McDonald, Paschal Mooney, Niall Ó Brolcháin, Labhrás Ó Murchú, Francis O'Brien, Denis O'Donovan, Fiona O'Malley, Ned O'Sullivan, Ann Ormonde, Kieran Phelan, Shane Ross, Jim Walsh, Diarmuid Wilson)
Against the motion: 16 (Ivana Bacik, Paul Bradford, Paddy Burke, Jerry Buttimer, Ciarán Cannon, Paudie Coffey, Paul Coghlan, Maurice Cummins, Paschal Donohoe, Frances Fitzgerald, Dominic Hannigan, Fidelma Healy Eames, Michael McCarthy, John Paul Phelan, Phil Prendergast, Brendan Ryan)
Tellers: Tá, Senators Camillus Glynn and Diarmuid Wilson; Níl, Senators Paudie Coffey and Maurice Cummins.
Question declared carried.
I do not accept this amendment. This is a standard provision in legislation where there is a transfer of staff from one body to another. It provides that the transferred staff will have the same terms and conditions as they currently have, as required under the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003.
Under the transfer of undertakings legislation, it is customary that, even in circumstances in which private companies are transferred to new owners, the employees' terms and conditions are taken on board. There is good reason for this provision, namely, protection for employees. However, this does not mean that if the commercial challenges facing the company change in future, it cannot revisit the transferred employees' terms and conditions as if they were continuing employees in the company. Should we not examine this matter to ensure that such would be possible?
I raise this matter in the context of the disproportionate action taken by air traffic controllers who held the travelling public to ransom. It turned out that the Irish Aviation Authority, IAA, was paying 30% of salaries as a contribution to pensions. This situation would not be sustainable in any company. It may be a carryover from this type of legislative clause, an issue that was not addressed by management. We can never expect to extricate ourselves from our serious economic difficulties if we allow bad practices to continue within the semi-State and State sectors. There are reasons to be fair to people, but there are also reasons to be sensible in what we do.
I am making this point in the context of recent events, as a similar legislative clause would have been used as the basis for the inaction of management and that company's board to tackle an obvious anomaly that has had serious implications for the State sector. When we are undertaking transfers, they should comply with the European legislation but they should not ignore commercial realities and the requirement that people on boards or at senior management level within the bodies in question should operate them properly, efficiently and in line with best managerial practice.
The Senator has made good points. This matter does not relate to the example provided alone, an industrial dispute that had a significant effect. We must be flexible in the next year or two as we amalgamate a number of agencies and look for efficiencies in how we deliver public services. Obviously, one wants to maintain the primary rights and conditions of employees, but we will also need flexibility and efficiencies in how we do business and work, particularly in the public service. I will pass on the Senator's points to the relevant powers in the Department of Finance and elsewhere who, as we undertake the work of amalgamating agencies, have a responsibility to ensure we achieve such efficiencies for the good of everyone.
I agree 100% with the Minister. We must be fair to people who work in the private and public sectors. I know people in the latter who apply themselves diligently and conscientiously to their jobs and we are fortunate to have such excellent people. As with every organisation, however, there are drones within the service and, unfortunately, they tend to be protected. In the private sector, these people would find themselves sidelined after a time, but this is not the case within the public sector.
We must ensure the best possible commercial practices apply. I am a member of the Joint Committee on Communications, Energy and Natural Resources which has examined some of the relevant semi-State organisations. Across a range of those bodies, opportunities were taken by people, who quite often were moving from the public sector to the semi-State sector, to ensure salaries were increased significantly. In some instances, salaries at the top level in the semi-State sector are probably not commensurate with responsibilities and jobs. However, the salaries for senior administrative positions, which we are approximately discussing in this event, have been inflated. I do not know how this situation will be tackled but it needs to be tackled. We must also be fair if we are asking people at the lower levels to play their part by taking salary reductions. I do not disagree with those reductions because salaries in the public and private sectors are too high, which is a large part of the reason we have lost competitiveness. At senior level within the semi-State bodies, there must be an overarching mechanism to control some of the excesses of many years that have inflated salaries. It is not fair that people who hold positions of greater responsibility in the private sector do not get anything like those salaries. We must be more energised about and engaged with this area.
Amendments Nos. 26 to 28, inclusive, are related and may be discussed together.
Government amendment No. 26:
In page 20, lines 39 to 41, to delete all words from and including "NRA" in line 39 down to and including "operator," in line 41 and substitute the following:
"NRA to impose charges for the use of ducts, which are provided and made available on those roads by an authority to a network operator,".
These are minor drafting amendments agreed with the Parliamentary Counsel. Amendments Nos. 26 and 28 provide better clarity of meaning in the text, and amendment No. 27 is necessary to ensure the provisions of section 53(20) of the principal Act include consents under subsection (4) as well as subsection (3).
I agree with the amendments but with one caveat. It is essential in all these areas where we have public utilities, such as the National Roads Authority, that where charges are applied it should not merely be about cost. There should be an onus on them to have reasonable costs so that there is value for money. As such, the charges passed on to the consumer should reflect that. I often see in public utilities that nobody exercises control over costs. The costs are a purely mathematical exercise and passed on to the competitive world. We must be conscious of that.
Absolutely. More than anything else, our competitiveness throughout the country will depend on fibre availability. It must be rolled out competitively. State infrastructure is one of the best ways to roll it out throughout the country. I agree with the Senator on the need to keep the cost down and availability up.