Vol. 418 No. 2
1 Mr. Kemmy asked the Minister for Tourism, Transport and Communications if she will outline the plans, if any, she has to introduce competition in telecommunications services as recommended in the Culliton report; if she will give details of any discussions held by her Department with interested parties; and if she will make a statement on the matter.
The recommendations in the report of the Industrial Policy Review Group (Culliton report) relating to competition in telecommunications services propose that competition to Telecom Éireann be allowed in the provision of value-added services and that resale of leased lines be allowed.
So far as competition in value-added services is concerned, on 3 March 1992 I signed a statutory instrument (S.I. No. 45 of 1992) which enables me to issue licences for value-added services. I might add that my predecessor informed the Dáil during Question Time on 26 November 1991 that no action would be taken under the Postal and Telecommunications Services Act, 1983, against those who provide value-added services in advance of the making of this statutory instrument.
In relation to the resale of leased lines, EC Directive 90/388 on competition in the markets for telecommunications services provides for prohibition on resale of leased lines until the end of 1992 with the possibility of an extension of this prohibition until the end of 1995. I would not be prepared to approve of resale until Telecom Éireann's tariffs are brought more into line with their costs. At present Telecom Éireann's charges for long distance and international calls are too high while the charges for local calls in many cases do not meet the costs of these calls. Approval in resale of leased line capacity would encourage, cream skimming and arbitrage and, by eating into Telecom Éireann's profitable area, would reduce the company's capacity to provide a universal service based on the most up to date technology.
There have been a number of approaches to my Department regarding the possibility of providing telecommunications services in competition with Telecom Éireann and the Deputy will understand why the interested parties would expect me to treat details of their approaches as confidential.
