Deputy Deenihan is in possession and he has five minutes remaining of the time available to him.
Private Members' Business. - Telephone Charges: Motion (Resumed).
The following motion was moved by Deputy O'Malley on Tuesday, 18 May 1993:
That Dáil Éireann condemns the Government's decision to approve increases in telephone charges of up to 400 per cent for day-time local calls and regrets that the Government's decision failed totally to address the overall cost levels of Telecom Éireann or to encourage greater competition as recommended in the Culliton report.
Debate resumed on amendment No. 1:
To delete all words after "Dáil Éireann" and substitute the following:
"notes and approves of the action of the Minister for Transport, Energy and Communications in authorising the implementation of a package of telephone tariffs which will improve competition and assist in job creation in the economy, allow Telecom Éireann to further develop and update our national tele-communications infrastructure and provide incentives for maximising public usage of the telephone system; further approves of the Government's decision to recommend that State and Local Government Agencies maximise the use of freefone facilities and welcomes the decision to establish a Telephone Users' Advisory Group to monitor the impact of the rebalancing of telephone tariffs."
—(Minister for Transport, Energy and Communications.)
I wish to share my time with my colleague, Deputy Kenny.
Is that satisfactory? Agreed.
Telephone use by people with mobility and speech impairment has enabled them to combat isolation and play an active part in their communities. Use of the telephone provides a lifeline. Implementation of the local charges as announced would greatly increase isolation and force people into more passive roles and cause hardship.
Bord Telecom has successfully exhorted the public, through its advertising campaigns, to keep in touch by making "that call". I put it to the Minister that they will no longer be able to afford to make that call. The Minister and Bord Telecom have deprived them of that right. In this way Bord Telecom has deliberately sought to increase telephone usage as a social medium and it is now asking this most vulnerable group in the community to pay an exorbitant price following this so-called readjustment of charges.
Finally, Fine Gael is committed to Bord Telecom Éireann. We believe the question of ownership of Bord Telecom Éireann is not relevant; in our view it should remain in public ownership, but it must become competitive. The winds of competition are blowing through Europe and Telecom's future will not be guaranteed by trying to hide from these competitive forces but by gearing the company to take on competition in Ireland and to compete for business throughout the European Community and Eastern Europe. The Minister has not taken the proper approach. He will not make Bord Telecom Éireann more competitive by imposing this harsh package on the ordinary people of this country, especially the most vulnerable sections of society.
It has been brought to my attention that Telecom Éireann may decide to charge a call-out fee of £30 following the implementation of this package and that thereafter the charge for 15 minutes work would be £32. I do not know if this is a hidden charge, unannounced by the Minister in his speech, but I would like him to clarify this matter. The total charge for 15 minutes work, between the call-out fee and the fee for work done, would be £62. If that is the case, are there any other hidden charges?
Telecom Éireann is a strong company, which can become competitive and economically sound while in public ownership during the next few years and which can compete and avail of opportunities on the European market. But it is difficult for it to assess the impact this overall package will have. The Government is entitled to instruct Telecom Éireann to revise this package. A number of years ago people were refused entry to Croke Park when the Government refused to abolish VAT on hurleys. In this case a 10 per cent levy which could be absorbed by the Government will be payable by every single individual with telephone equipment. This is an extremely sore point and it could lead to a massive public protest in November when bills are sent out.
As people who are politically aware, the Government could say to Telecom Éireann that its overall programme will not lead to the company becoming more competitive and that therefore it should revise its proposals in the public interest. Many elderly people could spend an hour or two on the telephone — their only link to companions — and these telephone charges will hit them very hard. The Minister and the Government should be aware that protest groups are gathering momentum, expressing concern and will play a vital role in the months ahead in convincing the Government that it was wrong to take this action.
As outlined last night by my colleague, Deputy Noonan, my party believes that Telecom Éireann has an important part to play in the telecommunications business. We also believe that the company should remain in public ownership and avail of opportunities in the European Community. Further, we appreciate that trained personnel are available to Telecom Éireann but do not expect the Government to rob the poor to subsidise the rich.
A short time ago people were unable to obtain information on their telephone bills, but from the facts produced by the Minister we now know that up to 70 per cent of calls are under three minutes. All over the country consumer committees are being set up. While it is important to be in Government, it is also important that one takes cognisance of the social consequences one's actions may have. The Minister's predecessors refused to implement this package and I think he should do likewise.
I wish to share my time with Deputies Hughes and Ó Cuív.
Is that satisfactory? Agreed.
Since the day the Culliton report was published it has been abundantly clear that some of the measures contained in it would be difficult and unpalatable. The changes in Telecom Éireann charges are a necessary part of that process. The future of the company — one of the most important in public ownership in Ireland — is at stake. It is forgotten perhaps in the controversy that this company employs more than 10,000 people and that an investment of more than a £1 billion has been made by this company in recent years. The objective of the Government is to keep Telecom Éireann strong and competitive. If we do not, the employment impact within Telecom Éireann itself and as a result of other knock-on effects will be very severe.
Contrary to what has been claimed, the amended charges are only one part of the package because there is continuing substantial capital investment by the company, supported by the taxpayer, to improve performance, service and productivity. In fact, I might add that the whole country saw the direct result of some of that investment in the spectacular technical success of last Saturday's night show in Millstreet to which Telecom made a very large contribution.
There is no escaping the fact that Telecom, as a result of European deregulation, will face stiff competition in the future, especially in respect of longdistance calls. We cannot expect Telecom to compete with one hand tied behind its back against multinational giants.
At the same time we have to take the opportunity to allow Telecom maximise its share of business traffic and to provide major reductions in the costs incurred by industrial users of the telephone services.
Of course, extra charges on any sector of the community are never welcome, especially when some of the announcements surrounding such increases lack sensitivity. In this regard I have to say — and I think most Members of this House would agree — that the misleading and disingenuous advertisements placed by Telecom Éireann were both offensive and unhelpful. But that does not alter the fact that the principle of change must be accepted. No matter how painful or difficult, we cannot allow it to be said that this Government is prepared to shirk necessary decisions. Part of this process, an essential part, is the gearing of our telecommunications network in an efficient and cost-effective way to make the maximum contribution to economic development.
The announcement by the Minister last evening that he is examining ways and means of protecting those most likely to be severely affected will be welcomed by most objective commentators. The same objectivity, if applied to some of the more hysterical outbursts by some of the Opposition, will reveal that cant and hypocrisy for what it is.
For many years, for example, the privatisation of Telecom Éireann and the dismantling of that major investment on the part of our electorate was a prime policy objective of the Progressive Democrats. I have no doubt whatever that, were they in Government today, we would be forced to listen to speeches about the operation of free market forces, while job losses and charges in Telecom Éireann mounted. The privatisation of Telecom Éireann is not on this Government's agenda. Neither are we prepared to stand by and allow it to be weakened by competition from companies ten or 20 times bigger.
May I say, in relation to the privatisation of British Telecom — sometimes suggested as a model for Ireland — that that resulted in the loss of 30,000 jobs and the highest ever domestic telephone tariffs within the United Kingdom. That is UK-based data, not Irish data.
On a point of order, this speech is so good, I wonder whether we could treat ourselves to a copy of it?
That is not a matter for the Chair.
Yes, I will arrange that. The attitude of the Opposition in this case contrasts sharply with their stated policy of funding assistance to maintain employment and the commercial viability of Aer Lingus. I want to knock firmly on the head the absurd assertion by the Progressive Democrats that the proposals are contrary to EC law. That is not only misleading but is the exact opposite of the real position. EC policies and directives in the area of telecommunications all point to the need to have charges based on objective criteria. In general these charges must be costorientated, but that is the ultimate goal. Some cross-subsidisation is permitted under EC law but the cross-subsidisation we have at present — that is, where local calls are being subsidised by international calls — is in fact unacceptable to the EC. The EC considers that international calls cost too much relative to local calls. They consider that, in effect, there is a surcharge on international calls and that that practice must cease, which is exactly what the current set of Telecom Éireann proposals is about.
As I have said already, the Minister should be congratulated on his announcement last evening that £500,000 of Telecom Éireann's budget will be set aside to meet the telephone costs of voluntary organisations. It should be reiterated that the vital services of organisations such as the rape crisis centres, The Samaritans and Childline will not be affected by these new telephone charges.
In the Department of Social Welfare we are concerned to ensure that none of the bona fide services provided by voluntary agencies, many of whom work in the areas of poverty and deprivation, will suffer any disadvantage as a consequence of these charges. I intend to review carefully the position as it will affect each of them in close consultation with the agencies themselves. I am carefully examining the position of elderly and disabled people living alone. There are some 105,000 such people in receipt of free telephone rentals at a current cost to the Exchequer of £18 million. The purpose of that allowance is twofold: first, to allow elderly and disabled people summon help in emergencies and, second, enable them remain active in the community and keep in touch with relatives and friends. We will carefully monitor the operation of the new charges to ensure that the objectives of this scheme are not undermined.
I might add that the Department of Social Welfare is among the top five Telecom Éireann customers, paying £2.7 million this year in addition to the £18 million provided for the free telephone rental scheme. The Department is also a major recipient of telephone calls, occasioned by the substantial number of queries received. We will be negotiating with Telecom Éireann on the greater use of Freefone facilities or fixed charge calls to the Department of Social Welfare and to other Government Departments.
The Labour Party as a whole is committed to an ongoing, through review of the proposed charges so that the overall economic objectives are achieved in a fair and equitable manner. We hope that the process of review will accomplish two things: first, it should take into account the views of a wide number of user groups before the new charges are introduced in September next; and, second, examine the effects of the charges once they are introduced. The technology exists to enable Telecom Éireann to be reliable and flexible in the application of charges if circumstances dictate that such flexibility is required. Because of substantial capital investment Telecom Éireann is very technologically advanced.
Already the Government has established a telephone users' advisory group which, when fully operational, should facilitate an ongoing review of the position. I can promise this House that the Government will take very seriously indeed any information or representations it receives from that group. Indeed, any recommendations it makes will be made public so that the Government can be judged on its response in due course.
I might reiterate, particularly to Members of the Opposition, that I think they have stated a case for saving jobs in Aer Lingus. Well, this Government is determined to ensure that the jobs content of Telecom Éireann is also protected. It is grossly unfair to advance an unbalanced argument which ignores the future of Telecom Éireann and which is essentially a subterfuge argument for privatisation.
We are told, quite correctly, that it is our responsibility to introduce policy which will have the effect of reversing the terrible burden of employment and its costs to this nation. Tinkering around with the system is no longer sufficient. There has been a root and branch examination undertaken by Culliton and its methods of implementation examined by Moriarty, with both reports now endorsed by Government.
When the Culliton report was published the question was often asked when its constituent parts were to be implemented. In fact, there was a criticism of the Government on its slowness in taking on board its recommendations and media commentators and Opposition Deputies availed of the opportunity on several occasions to call on the Government to implement the suggested reforms without delay. One of the first such reforms undertaken was the telecommunications tariff re-balancing package announced by the Minister for Transport, Energy and Communications.
Telecom Éireann has a debt in excess of over £1,000 million which must be repaid to the Exchequer, its shareholder, and it will spend in excess of £100 million this year on maintaining and improving the service available. We must all acknowledge the huge investment there has been in the telecommunications network, resulting in vastly improved levels of service all round. We should remember that this network is a national asset which continues to be improved, taking account of new technology and more importantly, competing with overseas forces. The latter require Telecom Éireann not only to be at the cutting edge of technological change but also to be competitive with its large multinational competitors, who could undermine its profitability.
For example, ATT and MCI, both international giants, have already become more competitive than Telecom Éireann on international routes. Callers simply apply for a call card which gives them access to an ATT or MCI operator. That operator can connect them to any destination in the United States, Europe, or vitually any other country at cheap local call rates after billing for the initial call. Already Telecom Éieann is currently losing approximately £15 million from this international competition. In addition its market share on United States and Australian routes has fallen from 50 per cent to 30 per cent.
In recent years we have witnessed companies from abroad, particularly from America, setting up here and employing large numbers of workers. One of their main reasons for doing so was our telecommunications links, which are on a par with any other country worldwide, and a highly educated workforce who are computer literate. With the reduction in international telephone charges the Industrial Development Authority henceforth can quite properly and forcefully seek other administrative-type companies to locate here.
As a Deputy from the west I am enormously aware of the many impediments which business tourism and consumer interests had to withstand over many years because of the remoteness of our location vis-à-vis our capital city, where all our main State, semi-State and commercial concerns are located. For example, every time a person from my constituency telephoned Dublin, Galway or Cork they were penalised due to our peripherality whereas businesses located in Dublin had a competitive advantage. Many people in my constituency who have to use the telephone for business are well used to ensuring their calls are kept to a minimum as invariably calls to our capital city were trunk calls and people could not afford the luxury of an indefinite duration.
Costs to industry must be reduced. If companies are to continue to successfully penetrate European markets it is vital that the tariffs imposed on international calls are reduced to levels which allow exporting firms to become more competitive. From September it will cost £1.09 plus VAT for a three minute call to a near European country, the second lowest rate in the EC. The old rate of £1.83 was the dearest of seven EC states and almost twice the cost of the UK rate. The charges will mean a £60 million pound reduction in the cost of internatonal calls, two thirds of which will accrue to business users. There will also be £21 million in savings in the cost of certain trunk calls within Ireland which will also be helpful to business. The reduction in the A rate trunk call for calls up to 56 kilometres is a further improvement. Such calls will be reduced on average by 25 per cent from 1st April 1994. I note the Minister's commitment to making further reductions as resources permit until Telecom get to a stage where the short trunk rate and local rates merge and there is only one national trunk rate. How often have we heard that the cost of doing business was prohibitively high in Ireland? The Telecom package will go some way towards levelling the playing pitch and improving our competitiveness in international markets.
Coming from an area whose economy is increasingly dependent on tourism the package contains attractive features, not only for tourism operators, be they small bed and breakfasts or large hoteliers, but also for people from Ireland and overseas who now have an opportunity to visit our tourist resorts in that their telephone charges will be drastically reduced. Tourism is not an industry that operated from Monday to Friday but, during the season for seven days of the week. The introduction throughout the entire country including Northern Ireland, on Saturdays, Sundays and public holidays of trunk calls charged at a special rate of ten minutes is an additional boost to users of the telephone system.
Many private householders who have sons and daughters living in this city will be able to keep in closer contact with their families by intelligently using the cost structures and benefits built into the rebalancing package. We all know of fathers and mothers in our constituencies who are in receipt of social welfare benefits and who could never enjoy the luxury of telephoning their children who work away from home, unless in emergencies, these people can now feel free to use the telephone at the weekend without wondering about their ability to pay their telephone bill.
There are many attractive features to the Telecom package. As has been stated, it now introduces choice where none existed before. Already more than 100,000 old age pensioners and handicapped people living alone are entitled to free telephone rental. The Minister has had an analysis carried out of the bills of all old age pensioners and he will have to ensure that no hardship will arise for that general group of customers. I welcome the changes announced here last night by the Minister.
I accept in general the figures which have been produced to show the distribution of the share of benefits and costs arising from this package and quite clearly timed local calls will bring in substantial additional revenue. However this is subject to the proviso that there is little or no change in the pattern of usage in the local call area on timed telephone calls. Telecom is absorbing £15 million pounds of the savings which are being distributed to both business and residential customers and there is marginally greater savings to business as a result of their use of the international portion of the network. We are doing no service to the Irish public by creating hysteria and trying to mislead and deceive people as to the overall thrust of this package.
Telecom has proven to be one of the successes of the semi-State sector. The last overall increase was in 1986, with Telecom absorbing inflation in the meantime. In January 1992 there was a reduction of 33 per cent in national trunk call charges and, together with this package, that has cost Telecom £65 million. Prices have reduced by 34 per cent in real terms since 1986. Wild predictions can now be made as to the effect this package will have on residential as well as business customers, but we can be certain of one thing, that if Telecom had not been committed to an investment programme and to reducing its charges to both business and residential customers since 1987, the levels of unemployment would be even greater than they are.
The Opposition motion refers to the overall cost levels of Telecom Éireann. However, it has to be acknowledged that Telecom Éireann has already shed 5,000 jobs since 1985 and all indications are that further jobs will go within the next few years. In facing international competition the company will have to continue to increase its productivity, level of service and number of subscribers. At present there are 1.1 million subscribers and Telecom predict that this figure will rise to 1.36 million over the next five years. There has been a substantial increase in the use of mobile telephones, and usage is expected to increase by 500 per cent over the next five years with further development in the use of data transmission service.
Telecom Éireann's original plan was to have been much tougher on the consumer. I commend the Minister for examining all aspects of the proposals put forward to him by Telecom and coming up with a package which is well balanced, which will permit for four out of every five telephone calls to be cheaper than heretofore, which introduces choice for the consumer where no choice existed before, which will permit for greater usage of the telephone system where, heretofore, the cost was prohibitive, especially for long distance calls, and which will allow Telecom Éireann to ward off competition and protect its customer market. This rebalancing package was not introduced with a view to gaining extra revenue for Telecom — the company is contributing £15 million from its profits — but was primarily introduced to ensure that we are not left in five or six years' time with a skeleton of a national telecommunications company that would have to discharge an expensive social mandate on the unprofitable aspects of its business, leaving the more profitable and lucrative business to an increasingly competitive EC communications market. As Damien Kiberd stated in one of the Sunday newspapers "The reality is that business customers were heavily crosssubsidising domestic telephone users and losing overseas markets as a consequence."
In my constituency there are 18,000 telephone subscribers within the local call area whereas in the Dublin local call area there are 411,000 subscribers. That gives some idea as to the disadvantages of that system for people in the west. I commend the Minister for introducing this package.
I have no doubt it has many attractive features, not only for businesses but for residential customers who use their telephones intelligently. I welcome last night's announcements.
I was surprised at the motion put down by the Progressive Democrats. Suddenly great emphasis is placed on local calls. Previously people in the west had to pay more for short distance calls. When I started a campaign seven years ago to ensure that these calls were charged at the same rate applying in Dublin there was silence. People may say local calls are charged at the same rate throughout the country, but that depends on the definition of "local". Up to four years ago if I made a telephone call from Cornamona to somebody down the valley it was considered a trunk call; if I made a call from Clifden to Galway it was considered a trunk call and if I made a call from Doire Iorrais to Rosmuc, which is three miles away, it was considered a trunk call. I would have paid 15 times more for these calls than for a local call in Dublin. The ludicrous situation existed whereby in an area such as Clifden the number of local subscribers was 1,500 compared with 411,000 local subscribers in Dublin. For too long people in the west have paid a hidden subsidy. This was a pernicious and expensive system. Those using the telephone in the west had to pay a disproportionate amount for their calls.
On foot of the changes brought about four years ago the average bill in the 095 area and the 092 area, in which I live, was reduced by one-third to half the previous cost. However, we still pay much more for telephone calls than our city counterparts because much more of our short distance calls are considered under the existing system to be trunk calls. At that time I asked what justification there was for charging 15 times more for a call from Cornamona to Galway than for a call from one part of Dublin to another. At that time the computers were connected in such a way that, for 11p, people could stay on the telephone for as long as they wished. Anybody who knows anything about telecommunications knows that there is no cost justification for such a scheme. The rebalancing a few years ago helped to redress a patently unjust system, but it went only a small way as there are still parts of the country in which there are only 8,000 subscribers in the local call areas. There are a great many areas in the country, including my own county where a telephone call to the county town, about which we hear all the weeping, is a trunk call. In some areas it is still a trunk call to ring the local hospital or the local county council office but we heard very little about that from the Opposition spokespersons. At present somebody in Clifden who wishes to contact the local geriatric home in Loughrea must make a trunk call. A great many people do not understand the system. They think all calls within the 091 exchange area are local calls but it is broken up into three different areas and if somebody like me who lives in Cornamona has to ring the Teagasc office in Athenry, he has to make a trunk call. Indeed it is a trunk call to ring the psychiatric unit in Ballinasloe. Members on the Opposition may laugh but these are the realities of life for people in the west.
Will this package improve things?
Yes it will.
It will not, except at the weekends.
The Deputy should be allowed to make his speech without interruption, let us not forget the rigid time limit in this debate.
All over the country we have to pay trunk rates for what are essentially local calls because it was arbitrarily decided to draw a line on the map. Calls within a designated area are regarded as local while outside it, they are trunk calls. Two things are being done in this package; first, there is a commitment to reduce by 25 per cent the "A" rate calls, the Minister has gone further and given a clear undertaking that it is his intention, over time, in line with a proposal I made a few years ago, that the "A" rate charge and the local charge will merge to bring equity to the system and that those living in rural areas would not be permanently penalised for having access to essential services and ringing relatives.
In the meantime you pay more.
We must remember that by percentage of population the offspring of people in the west tend to be more scattered than those born in Dublin. As a consequence of these proposals the Minister has made it possible to contact anyone in Ireland at the weekend for ten minutes for the cost of a local call. Conveniently, all these things have been skipped over. When asked questions about this rebalancing exercise, I have stated clearly how I will measure it in practice: by noting if the average telephone bills in the west come down. Obviously someone will have to pay for that although there is a net contribution of £50 million from Telecom Éireann. The west cannot continue to subsidise the east. The population in the main urban centre will have to bear a more equitable part of the load than they have up to now. We know they have been loath to do this, indeed they did not object when we had to pay by the minute, not per three minutes, for local calls. The weak communities in the west could be dismissed out of hand and told they did not count because they did not have the population numbers.
You will now pay more.
We pay more at present.
Deputies, please desist from interrupting.
I see what is happening now as part of a process — in which I played a big part initially — to bring equity into the telecommunications system. I argued that technology should make it possible to call any part of Ireland from another for the cost of a local call. There is no logical reason for setting up arbitrary local call areas because that relates to the days when the telephone lines went along the railway lines and people had to crank the handle to put the call through from one operator to another.
The Deputies want to preserve the status quo. Members are concerned about possible adverse effects of the change in duration of local calls. I would be the first to admit that if I thought it would impose a cost greater than the reduction for the majority of my constituents I would be very concerned because we have already paid more than our fair share for telecommunications services. I believe that when the jigs and reels are over, we in the west will find there is regional rebalancing and that the basic service is costing the same as those on the east coast. This has been denied to us for too long and we will not tolerate it any longer.
Tá ceisteanna agam i dtaobh an ábhair seo. Glacaim leis, ar a shon sin, má tá figiúirí Theilecom Éireann mícheart agus má fhaightear amach go bhfuil costas níos troime ag titim ar dhaoine ná mar a mheastar anois gur cheart breathnú ar cheist na nglaonna áitiúla arís.
San iomlán, tá an rud ag dul sa treo ceart. Bhí caint sa díospóireacht seo ar "competition". Ina thaobh sin, fiafraím den Pháirtí Daonlathach an bhfuil siad ag iarraidh go mbeadh muintir na tuaithe ag íoc deich n-oiread de chostais theileafóin muintir Bhaile Átha Cliath nuair a thiocfaidh "competition", mar sin a tharlóidh. Más toil leo sin ba chóir go ndéarfadh Teachtaí Dála an Pháirtí Daonlathaigh san iarthar é sin go neamhbhalbh le muintir a nDáilcheantair.
I wish to share my time with Deputies Johnny Fox, Sargent and Currie.
Is that agreed? Agreed.
I am very glad the Progressive Democrats Party has used its Private Members' time to put this issue on the agenda of the House and given us the opportunity to condemn the Government's decision to increase local telephone charges. The motion before us rightly condemns the huge increase in local charges but it does not propose any remedy, does not address the savage and avoidable increase in VAT on telephone bills and the wider issue of telecommunications policy. The contributions of Deputies O'Malley and Cullen last night were over critical of Telecom Éireann and, by implication, its staff. They placed an undue emphasis of what they consider to be the advantages of competition in the telecommunications industry and, by extension, their ultimate desire to see the privatisation of Telecom. For these reasons the Democratic Left is proposing an amendment to the motion which calls for a revision of the unacceptable increases in local charges which will hit domestic subscribers and many small businesses; the reversal of the decision to pass on the full VAT rate to subscribers and the production of a comprehensive telecommunications policy setting out its strategy in regard to EC liberalisation of telecommunications and its implications for Telecom Éireann.
I am making that point at the outset of my contribution because while all the Opposition is united in its rejection of the Government's so-called rebalancing, Democratic Left has a somewhat different perspective on the future of Telecom Éireann and on telecommunications policy from the other Opposition parties. We are committed to Telecom Éireann remaining in public ownership and to the protection of the employment of the staff of Telecom Éireann who have made such a valuable contribution in turning that company around to profitability.
However, the reality is that the vote which will take place in this House at 8.30 p.m. will be on the Government's amendment, which explicitly expresses approval for the action of the Minister for Transport, Energy and Communications, Deputy Cowen, in authorising the new package of telephone tariffs. We will be voting against the Government amendment. It is strange that those Government Deputies, whether from Fianna Fáil or Labour, who are expressing reservations, as Deputy Ó Cuív did in his aguisín, that there should be a revision of the decision on local charges and who are telling their constituents privately that they are opposed to the Government decision, will have the opportunity of going into one or other lobby at 8.30 p.m. this evening. Any Government Deputy, from whichever party, who goes into the lobby to support the Government amendment is, in effect, giving the Minister a clap on the back and is voting for the increase in local telephone charges.
It is seen in the papers but not heard in the Dáil.
Scripts for the Connacht Tribune are no substitute for a vote here this evening. The impact of the charges on the domestic consumer and on small businesses has already been well articulated. Indeed, on the Adjournment debate last week I raised the issue with the Minister. What is most astonishing about the whole issue is the Minister's insistence on representing as pro consumer a decision which the consumers well know will cost them money. I cannot understand why the Minister does not simply come clean and tell us straight that the so-called rebalancing is a deliberate shift in the national telephone bill in favour of large businesses with a lot of international telephone use which is to be paid for by the domestic user and by small businesses. The reason for the shift is that Telecom Éireann, as a consequence of EC liberalisation of telecommunications, is facing competition for the international business by multinational telephone companies who have no interest whatever in the domestic consumer, no interest in supplying telephones to Deputy Ó Cuív's constituents in Cornamona or Rosmuc and who are interested only in the plum end of the market — the international telephone calls.
It would be possible to disagree but at least to respect such an honest explanation of the so-called rebalancing but what we have had from the Minister has been a deliberate attempt to sell the pass on the public. This is Government by public relations. Announcements are made, not to the Parliament where one is accountable, but to a press conference where the message is prepackaged and is intended either to confuse or to mislead. Fortunately, on this occasion the public have seen through the scripts and excuses and recognise the Government's decision for what it is — an increase in the domestic telephone bill.
Last evening the Minister declared, and I quote: "The facts are that overall telephone charges are being reduced". This is the kind of nonsense that used to tell us that the economy was improving while more and more people were losing their jobs and being driven into poverty. The Minister declared it was a net reduction in the average charge for calls on residential bills. He must know there is no such thing as an average telephone bill any more than there is an average family of two and three quarters children. Indeed, the average bill he produced is based on an analysis of telephone calls in the most unrepresentative of all months, December. From that analysis he informs us that the average bill is £7 for local calls, £5.70 for trunk calls and £6.56 for international calls from which he concludes that the average residential customer spends almost as much on international calls as on local calls and therefore that the rebalancing will benefit the customer.
Does he not realise that because of the holiday season local calls, and especially local business calls, would normally be reduced and that the average domestic subscriber is more likely to telephone a "happy Christmas" message to an emigrant relative at that time of the year? The analysis on which the Minister's entire case is based rests on a month in which the balance between local and international calls is distorted and, therefore, his conclusion that rebalancing will benefit the consumer is entirely false.
The public outcry can hardly have come as a major surprise to the Minister, because when announcing the charges last week he took the trouble to circulate his backbenchers with a letter which anticipated the outcry. The letter stated:
There will inevitably be an adverse reaction to some aspects of it, particularly those related to the timing and charging for local calls. Much of the complaints will be based on inaccurate or incomplete information and the purpose of this letter is to enable you to respond to any complaints which may be made to you.
It was remarkable that he could predict the inaccuracy and incompleteness of a case he had not yet heard.
It was a prediction on the Deputy's part.
It was mischievous on the Minister's part to supply a simple guide to the new telephone charges, along with questions and answers, so that Deputies in every part of the country could provide readymade prescripted answers to any awkward question they might be asked either by the local media or by any of their constituents.
The Deputy's party was never in favour of reducing telephone charges.
Deputy Gilmore to continue without interruption.
Yesterday the Minister came into this House and attempted to defuse public anger. He offered two olive branches to the angry consumer — a new telephone users' advisory group and £500,000 of Telecom's own money to fund free Helpline calls. There is acute irony in the establishment of a telephone users' advisory group after the decision has already been made to increase charges.
The Postal and Telecommunications Services Act, 1983, provided for a Telecommunications Service Users Council of between ten and 20 members whose functions would be to consider complaints and representations on behalf of users and to advise the Minister or the company on any matter relating to its services. This is the body which should have considered Telecom's position and which should have been asked for advice on the proposed rebalancing of tariffs. In 1987 the users' council was abolished by the then Minister for Communications, Deputy Ray Burke. The abolition was given legislative effect by the Restrictive Practices (Amendment) Act, 1987, which repealed sections 48 and 49 of the 1983 Act. The then Minister, Deputy Ray Burke, justified the abolition of the Telecommunications Service Users Council in a Dáil reply to Deputy De Rossa on 15 October 1987, when he said at column 430 of the Official Report:
The Government as part of their ongoing review of public expenditure, decided to disband the two councils
——the other was the Postal Service Users Council——
with effect from 4 July 1987.
He went on to make it clear that his Department had responsibility to ensure that Telecom Éireann provided satisfactory services to the public. Many of the Deputies, including the Minister who supported the abolition of the Telecommunications Service Users' Council in 1987, are still here. They will vote for the increases in telephone charges and try to assuage public anger by setting up a new telephone users group after the damage is done.
I have further news particularly for Deputy Ó Cuív, who has now left the House, that his own Minister is participating in discussions and decisions at European Community level. A report in the briefing which the Commission circulates to us informs us of an agreement which was reached on 10 May regarding further measures on the liberalisation of telecommunication services. Deputy Ó Cuív must know that it costs in the order of £20,000 to bring telephone service to many remote parts of his own constituency. When Deputy Ó Cuív experiences the effect of full EC liberalisation and the cost-based tariff structure, he will have less cause to quibble about the charges being imposed on the relative cost of phone calls between Rosmuc and Dublin than on the decisions in which his own Minister is now participating. They will create a real problem, because when competition comes there will not be many multinational telephone companies interested in supplying telephone services to Rosmuc, they will be interested in getting a bigger slice of the telephone business.
He will send up smoke signals.
I thank Deputy Gilmore for allowing me some of his time. As far back as 28 February 1991 I had a motion on the Order Paper in which I asked the then Minister not to increase charges because of the effect it would have on the old, the underprivileged, the lonely, the depressed and so on. On 17 April 1991, when the then Minister introduced time charges, I described them in the following terms: that the decision by the Minister to allow the timing of local calls was the thin end of the wedge. I make a confident prediction that a process has now begun, a recurring feature of which will be announcements of a reduction in the time for local calls. I take no pleasure in being right in relation to that, but then I was not entirely right, I did make some mistakes. I did not take some matters into consideration. I did not think at that time that from unlimited time to 15 minutes to three minutes would happen in less than two years. It took the British 25 years to do that. For once we have proved ourselves faster than they——
And they are still dearer.
——and it is unfortunate in this case. Nor did I expect the insensitivity, or the economy with the truth, or the attempted PR gloss that this was in the interests of the consumer. The Minister then was supposed to be insensitive. He was then known as Rambo. Former Minister Burke was supposed to be insensitive and I never anticipated that this was likely to happen.
Rambo II.
I must also admit I did not expect that this measure would be brought in in the way that it has been, with the support of the Labour Party as members of this Government because they appeareed at the time — I believe they were — to be strongly opposed to any charging for calls along the lines suggested.
Deputy Cox says, young Rambo "Prambo".
I do not want to waste my time on anyone else. It was, therefore, with regret that I listened to my constituency colleague, the so-called Minister for poverty. I regret very much the content and tone of her speech. She told us that of course extra charges on any sector of the community are never welcome, expecially when some of the announcements surrounding such increases lack sensitivity. I wonder who she was pointing at. She went on to say, "In this regard I have to say, and I think most Members would agree, that the misleading and disingenuous advertisements placed by Telecom Éireann were both offensive and unhelpful".
I have to point out to my constituency colleague that in Government one cannot have it both ways. One has to accept the responsibility of being in Government, and the Minister is as responsible as Fianna Fáil for these charges. She went on to say, "No matter how painful or difficult, we cannot allow it to be said that this Government is prepared to shirk necessary decisions". I agree entirely. Governments should not shirk necessary decisions, but they should not take such decisions at the expense of the old, the infirm, the lonely, the depressed, and the most deprived and under-privileged in our community. That is not a decision for Governments to take, and if they take it they must carry the responsibility for it.
What about the tariffs in the North?
The so-called Minister for poverty went on to say, "In my own Department of Social Welfare we are concerned that none of the bona fide services provided by voluntary agencies will suffer any disadvantage as a consequence of these charges". Then, instead of going on to announce what measures and additional money she intends to make available in order that people will not suffer she said, "I intend to carefully review the situation". She said: "I am carefully examining the situation as regards elderly and disabled people living alone and we in the Labour Party will carefully monitor the operation of the new charges and the Labour Party as a whole is committed to an ongoing review of the proposed charges so that the overall economic objectives are achieved in a fair and equitable fashion." Live horse and you will get grass. To what is the Labour Party committed? This is just not good enough and it is particularly not good enough for a Minister for poverty, particularly from my constituency, to express such sentiments. I challenge the so-called Minister for poverty, my constituency colleague to debate these charges anywhere in our constituency — and she can select the venue. Let us debate these charges and let us see whether the people are going to be taken as suckers in regard to some of the things that she said here. I issue that challenge publicly and I hope she will accept it.
Something had to be done about the cost of international calls. Due to remoteness from international markets we are more reliant on telecommunications than others and the high cost of telephone calls was obviously costing jobs. We cannot afford to lose those jobs and something had to be done. Telecom Éireann is under pressure from the European Community since 1988. There have been seven anti-monopoly directives and the monopoly days are gone. Competition has been forced by the European Community not only on our national telecommunications company but on others also. That was inevitable and something had to be done in the face of that. Yes, we have had a telecommunications revolution. The use of satellites will allow mobile users to telephone any where in the world. I thought it was going to take some time yet but I saw Minister Spring pictured on television using a mobile telephone. His monitoring of the situation of the United Nations at the time was being done from a mobile telephone in Spain, so obviously the technology is here. Something had to be done and Culliton told us what had to be done. Culliton suggested a three year plan to make Telecom Éireann more commercial, the sale of extra capacity in trunk lines, the bringing forward of legislation to enable Telecom Éireann to trade commercially and the offering of consultancy services like the ESB. There was not one proposal but a number of proposals. One proposal was taken out of context.
We have heard a great deal about privatisation. The trade union movement and, when in Opposition, the Labour Party have campaigned against the privatisation of Telecom Éireann. Fine Gael also believes that Telecom Éireann should remain in public ownership but it must be competitive. That valued and zealously guarded position of Telecom Éireann is now being menaced by the Minister for Transport, Energy and Communications and the board of Telecom Éireann. I have always believed that if there is anything worse than a public monopoly it is a private monopoly, but could a private monopoly have been more uncaring to the needs of the old, the handicapped, the lonely, the depressed and the underprivileged than has been the Minister for Transport, Energy and Communications in this whole affair? Could a private monopoly be more insensitive than the Minister has been to the needs of the young for whom the telephone has become an integral part of social intercourse? Could a private monopoly be more ruthless in the pursuit of greater profit at the expense of local industry and business? Could a private monopoly have been more economical with the truth in its efforts to cover up its real intentions?
A real and serious disservice has been done to Telecom Éireann by the Minister and its standing among the ordinary public has been dangerously eroded. Apart from the financial aspects the Minister's decision has serious social consequences. The telephone is no longer a luxury and I object to being patronised by Big Brother Brian when he pontificates to us on its usage. The way we use the telephone is, in the words of the yarn, part of what we are. It is not the responsibility of Minister Cowen to force us to be otherwise. We like to think we are a caring society, putting people before profits. Part of our "céad míle fáilte" is not to bark stark messages down telephones. We like to think we are a family based society but the inevitable rows, particularly in families with teenage children, will be very disruptive of family life.
I have not, since my entry into politics here, seen people more angry than over this decision and the patronising and Machiavellian way it has been handled. My advice to those who have expressed their anger to me has been not to get mad but to get even. When the bell eventually tolls for this Government it may be a telephone bell.
It is more expensive in Northern Ireland and they are no less caring.
I thank Deputy Gilmore for sharing his time with me, I promise not to be more than three minutes because it appears we will all have to say what we need to say in three minutes. I am sure I would forfeit far more by incurring your wrath, Sir, than an extra 11p or 17p
I support the previous speakers in wholeheartedly condemning the Government for attempting to force such an iniquitous charge on the people. One cannot blame the general public for becoming cynical about politicians. This is one of the most serious debates affecting the general public since I became a public representative and all but three out of the 101 Government Deputies are prepared to come in here in half an hour and vote against their conscience to support Telecom Éireann.
The case has been very eloquently made for a restructuring and a rethink in regard to the charges proposed by Telecom and the Government. If a company in private hands is to operate a fair system it must have competition, but Telecom Éireann does not have competition. Telecom Éireann is doing a good job in depending on stool pigeon politicians. I do not wish to be offensive, but it is deplorable that people can come in here and read scripts, undoubtedly prepared by a senior civil servant with a vested interest in Telecom and the protection of State and semi-State industries. It is a scandal that we are about to pass a motion penalising old people, the under-privileged and the handicapped in particular, some of whom were protesting outside this building in wheelchairs today. In many cases, the telephone is their only access to the outside world. I do not know how Deputy Ó Cuív could say what he did given that he has been nicknamed "young Dev" and on many occasions has personified the views of his late great-grandfather. The light will go out on this Government if it continues its present policies. It is a scandal that any of us should even contemplate voting for these charges. I am not affiliated to any party, but it must be wrong when the Progressive Democrtats and the Democratic Left are voting together on this issue. My three minutes must be nearing an end because I hear the pips on the telephone. I will support the Progressive Democrats' motion and I hope the Government will reconsider this matter on behalf of the old, the underprivileged and others about whom I spoke.
Beidh mé ag votáil i gcoinne an Rialtais ar an ábhar seo; ceapaim go bhfuil sé míchothrom ar an-chuid bealaí. B'fhéidir nach sinne polaiteoirí is fearr ag labhairt ar an ábhar seo óir nach n-íocaimid as costais teileafóin na Dála ach thairis sin, tá tuiscint againn ar thuairimí an phobail i leith costais theileafóin.
The local response to this issue has been overwhelming. Since my election to this House no other issue has got so many people's backs up. It is important to reflect on the policy behind this issue about which very little has been said. We are embarking on a process which is, supposedly, about maximising export production and, to that end, complying with an overall trend in EC policy epitomised through the Single European Act and Maastricht. Apart from the shortfalls in that policy from a Green Party point of view, it is now obvious how its cost will be borne, mainly by people who have the least to say in the matter, the ordinary people who have to endure the extra charges. If it is not too difficult for people to understand, it will also have to be borne by the earth because increasing local charges and encouraging exports will incur a huge waste of energy. Profitable exports incur a huge waste of energy in long term travel, to tell people that it is more profitable to drive down the road to have a chat with their neighbours also incurs a huge waste of energy locally. The old idea of letting your fingers do the walking has gone, it is now your feet or fast car which do the walking. That is bad for the people, bad for the earth and people who consider those matters important cannot agree with this policy.
The quality of life is being destroyed. Accountancy is coming into the family and people will have to watch the clock all the time. This will have adverse effects on people from a mental and financial point of view. I was on the telephone to the Department of Social Welfare today and after holding on for five minutes I had to leave and call back later. That is an example of what people will have to do on a regular basis. People in wheelchairs, local business people, the elderly and people with disabilities protested outside this House today in regard to the increased charges. Telecom Éireann got it wrong.
The body which is being set up, very belatedly and almost cynically — the telephone users' advisory group — will have to report back quickly because people will suffer from the increases. Will the Minister state when it will report back? Will it be able to recommend anything binding? How will we balance the figures without disadvantaging those who can least afford it — and the earth itself?
I welcome the opportunity to close this special debate on behalf of the Government regarding the rebalancing of telephone charges by Telecom Éireann. In regard to Deputy Fox's comments, neither my colleague, Deputy Cowen, nor myself are stool pigeons. I have an interest in wildlife, including the fox, and remarks such as that will not bring him any credit.
I apologise to the Minister if I touched a nerve.
Yesterday Deputy O'Malley advised that this package of tariffs could be successfully challenged in the European Court on the basis of an abuse by Telecom Éireann of its dominant position.
Where are the Minister's silent partners?
Probably in Europe, like yourself. Deputy O'Malley claimed that cross-subsidisation of international telephone calls, by local telephone calls was being introduced and we also heard him warn that Telecom Éireann could face a substantial fine. We further heard him advise us that Telecom Éireann could be faced with having to compensate subscribers for the excess moneys charged to these same subscribers, because of the new local charges and timing.
I want to set the record straight for Deputy O'Malley and indeed this House. For many years now highly profitable international telephone traffic has been subsidising the unprofitable local telephone traffic.
This was a situation, which caused little or no difficulty, when public network operators were State owned monopolies sheltered from the dangers of competition. It was universal, it did not lead to industry in one country having cost advantages, over industry, in another country.
How was this highly profitable international traffic achieved? It is not many years ago since there was little international traffic and cable capacity was very low. To make a telephone call to the USA involved ringing the operator who called back after connecting the call, through maybe five or more operators in Ireland, the UK and the USA. Advances in technology, such as direct dialling facilities and greater capacity on international cables, have greatly reduced the costs of setting up international calls. Consequent increases in the number of international calls have also led to increased profits.
The cost reductions achieved, in setting up greater profits received from international calls were not passed on in full to those making international calls. Rather they were used, as a matter of Government policy, both here and elsewhere, as a subsidy, towards the costs of making local telephone calls.
The Minister, Deputy Cowen, said last evening in relation to VAT, that it might have been wiser to pass on taxation to subscribers as it arose. The same could also be said of the reductions made in the costs of setting up and transmitting international telephone calls. These reductions are now being passed on. It is an inevitable consequence of the liberalisation of the telecommunications services and of EC policy, that it should be so. Similarly it is an inevitable consequence that revenues from international services can no longer be used to subsidise local telephone traffic.
That was not happening anyway.
The European Commission has for some time been pressing for all telecommunications tariffs, within the Community to be cost-based. The package approved by Minister Cowen, on Tuesday of last week is a major step in achieving cost based tariffing and is in line with the requirements of the EC.
Rubbish.
Voice telephony is specifically excluded from the provisions of the EC Services Directive, that is the Directive on the Competition in the Markets for Telecommunications Services 90/388/EEC, by Article 2 thereof. Voice telephony is in the reserved or non-liberalised domain.
All of the charges at present under discussion relate to telephone services which are within the term "voice telephony".
What does that mean?
The Government rebalancing package is fully consistent with the EC stated position on cost-oriented prices for voice telephony services, for example, the 1987 Green Paper, subsequent Directives and the Commission review document of 21 October 1992.
Deputy O'Malley suggested that the new pricing package constituted, at least in part, a differential price structure which was not commercially decided and which had the effect of abusing a dominant position.
Deputy O'Malley is missing the point. The package is designed to be commercially-based and much more cost-oriented, than the present pricing structure.
Rubbish. Does the Minister realise what he is saying? He should have read his script before he came here.
Failure to do what is now being done would be more likely to invite the attention of the Commission. The EC Green Paper on Telecommunications in 1987 stated: "Telecommunications tariffs should follow overall cost trends and rebalancing of tariffs will be inevitable". We are both responding and adhering to that statement.
Is Deputy O'Malley seriously suggesting that Telecom Éireann's pricing structure should be immune from trends evident for some years in many other European telecommunications systems?
Is the Minister suggesting that we should review European law?
We have no fears that this package will be challenged and if it is challenged, we have no doubt, but that the findings will be in favour of Telecom Éireann. Deputy O'Malley also stated that cross-subsidisation was prohibited, under the Postal and Telecommunications Services Act, 1983.
I would like to correct Deputy O'Malley on this point also. Section 87 (2) (c) of the Act, in relation to the reason for granting an exclusive privilege to Telecom Éireann states:
the privilege is given to the company, because a viable national telecommunications system, involves subsidisation of some loss-making services, by profit making services.
Which services were loss-making?
Deputy O'Malley has called on the Minister, Deputy Cowen, and the Government to withdraw this package in the interests of jobs. Last evening the Minister, Deputy Cowen, listed some of the industries, which are dependent on cost-effective and competitive international telecommunications charges.
Deputy Cullen stated last evening that nothing had been done to create a development role for Telecom Éireann and urged that this should be done.
True.
Deputy Cullen recommended that Telecom Éireann should expand internationally and create sustainable jobs, within the company. He cited the case of Cable and Wireless as an example. I can advise the House that throughout the would there are staff reductions in telecommunications operating companies. AT & T has been mentioned on a number of occasions in this House. It is obviously a company that is expanding worldwide, with its international services. It is not so long ago, however, that AT & T announced that it was seeking a 25 per cent reduction in its staffing levels, because of advances made by automation and technology. This is an inescapable result of development in modern telecommunications technology. Jobs are lost in the operating companies, irrespective or not, be they big or small 3ompanies. I am being rudely interrupted by the Deputies opposite and it is unfair that this should happen.
They `overscripted" the Minister.
They have been lost in BT and Cable and Wireless, despite their expansion worldwide.
This is not to say that Telecom Éireann is ignoring prospects of expanding outside Ireland. They operate a very successful consultancy business, which has won contracts in the Middle East. The company has staff employed under contract to British Telecom and its subsidiary, Irish Telecommunications Investments, has entered a successful joint venture in Hungary.
It is only chipping at the edges of what could and should be done.
Telecom also operates a US subsidiary, Telecom Ireland (U.S.) Ltd. Which is responsible for the marketing of Telecom Éireann services in North America.
The Minister's time is up; he should put in another 50 pence.
Because of Telecom Éireann's massive level of debt and is continuing need for heavy investment in infrastructure in Ireland, it is unable to expand in areas involving heavy capital expenditure. Telecom Éireann has no intention f becoming merely a local carrier. It intends to compete with competition, which is emerging daily.
It does not intend to compete.
It can only compete successfully, where it is allowed to operate on a level playing field.
The Members opposite cannot expect Telecom Éireann to compete if it must subsidise domestic local calls with profits from international calls, while its competitors do not offer a local service and have no such obligation.
The Minister should not race through a script in that manner.
I ask the Minister to conclude.
The package approved last week, is pro-development of Telecom Éireann. It is also pro-job creation and retention and it is pro-consumer. The IDA, which is acknowledged worldwide, as expert in its field, estimates that in the area of "back office" jobs alone, there is the potential for the creation of 1,000 to 2,000 jobs per annum provided cost competitive international telephone tariffs are in place. The IDA sees, what it described as its biggest new product, telemarketing.
I must ask the Minister to conclude. The order of the day requires that I now call Deputy O'Malley.
The ignorance shown here by the Deputies opposite in delaying time and denying the right of a Deputy to make a contribution is deplorable. I appeal to the reasonable Members to support this motion in the interests of the company and in the interests of equitable services throughout the country,
I wish to express my thanks to the various Deputies from the Fine Gael Party, Democratic Left and the Independents who have expressed their strong support for our motion.
The Deputy should not forget the Green Party.
I also wish to thank the Deputy from the Green Party for his contribution. I am honoured two members of the Labour Party were present for part of this debate. This is, indeed, a novel occasion. We have not seen many Labour Party Deputies up to now and I thank them for the honour they have conferred on me.
With regard to my contention last night that these price changes are most likely to be contrary to EC competition law, Article 90 of the Treaty of Rome forbids member states from enacting legislation, or maintaining in force measures which would enable any body to whom "special or exclusive right" have been given by law to infringe the competition rules of Articles 85 and 86. Telecom Éireann is unquestionably an undertaking to which Article 90 applies.
The company now proposes to compate with international telephone undertakings by reducing the cost of international calls and doing so at the expense of customers making domestic calls; in other words by drawing on revenues from the protected domestic sector where Telecom Éireann have a monopoly in order to enable them to compete in the international sector. I believe this practice is plainly open to challenge as it contravenes Article 90 (1) of the Treaty of Rome.
I had the opportunity of listening to and subsequently briefly studying the Minister of State, Deputy Burton's, rather unhappy intervention into this debate. Her speech was fairly pathetic in its reasoning on this matter where she stated that my suggestion to this effect was absurd. The Minister went on to explain what she considered European law is on these matters. She said some cross-subsidisation was permitted under Community law but the cross-subsidisation we have at present where local calls are being subsidised by international calls, is unacceptable to the Community. She said that the Community considers that international calls cost too much relative to local calls. The community do not think that at all. The community do not care what is charged for international calls because competition exists but they care a great deal about the charges in the domestic sphere where there is monopoly and no competition and where competition is not allowed under Irish law. The truth is the direct opposite from what the Minister of State, Deputy Burton said and to what the Minister of State, Deputy Treacy said. The latter rushed in here at a great gallop to try to rectify some of the errors made in the course of the debate so far.
Deputy O'Malley will never gallop.
I would like to have the opportunity of debating European Community law with the Minister of State, Deputy Burton, and the Minister of State, Deputy Treacy, on some occasion.
Deputy O'Malley is getting bad advice.
He understands his script.
The case that has now arisen here is clearly covered by the Port of Genoa decision 1991. It is on all fours with the Belgian RTT case in respect of which the Advocate General of the Court of Justice has expressed his opinion in recent weeks. Because it is on all fours with it, what happens in the Belgian RTT case is absolutely essential so far as we are concerned. The Advocate General has said that what the Belgian RTT is doing, which is exactly akin to what Telecom Éireann is purporting to do, is illegal under Article 90 and he has recommended it be struck down. I understand it is regarded by everybody in the court in Luxembourg as almost a certainty that the court will follow his opinion in this regard.
What is Minister of State Treacy's advice on that?
(Interruptions.)
The Government is also seeking to retreat behind the Culliton report for cover against the barrage of criticism which they are rightly facing. Culliton is becoming a bit like the Bible and, I am afraid, is suffering the same fact as the holy Book, because the Government hiding behind or quoting Culliton is a bit like the devil quoting scripture.
Hear, hear.
The Deputy will be good at that.
Culliton never recommended that what has been done should be done. On the contrary, he recommended that totally uncompetitive international calls be reduced and that this be paid for primarily by Telecom Éireann reducing its grossly excessive costs. He called for downward pressure on all pricing and for greater competition.
In case we were under the impression that the Government had stopped blaming Culliton, it is interesting to examine the first paragraph of Minister of State Burton's speech tonight in which she said:
Since the day the Culliton report was published it has been abundantly clear that some of the measures contained in it would be difficult and unpalatable. The changes in Telecom charges are a necessary part of that process.
That is total nonsense.
Culliton further called for the resale of leased lines, for a more systematic regulatory framework so that monopoly services would be provided only at cost based tariffs, and that there should be penalties on Telecom for failure to meet quality requirements in service contracts with its customers. None of these measures has been implemented by the Government.
Prior to Minister of State Burton's justification on television the other night of the Government's actions by reference to Culliton, another Minister has had an authoritive reminder, I understand, that what the Government is doing is flying in the face of Culliton gives in relation to our telecommunications service is the fact that Telecom Éireann's revenue amounts to 2.7 per cent of our GDP whereas the revenue of every other Telecom in the European Community varies between 1.3 per cent and 1.8 per cent of GDP. This is despite the fact that telephone usage in this country is lower than in most other countries. It is obvious from this figure hat Telecom Éireann's costs are totally out of line by comparison with other member states and that the average annual subscriber's bill here, whether business or residential, is higher than the average bill elsewhere in the Community. As I said last night, I know of no country where the costs per line are higher than they are in Ireland.
One of the features of the speech of the Minister for Transport, Energy and Communications last night was that he made various assertions in the text of his speech and then appended to it two tables which he circulated for the Official Report. The remarkable aspect is that the tables contradict much of what he said in his oral assertions.
Is the Deputy reading it upside down?
For example, almost half of the 727,000 residential or private telephone subscribers in the State will be worse off as a result of the changes in the cost of telephone charges, and that is official. This sobering information, which contrasts starkly with the claims by the Minister and Telecom Éireann that the cost of the vast bulk of calls is coming down, is contained in a tabulated analysis of all these bills for last December, which the Minister disclosed last night by circulating the particular table. This analysis of all of the 727,000 residential telephone bills for December last confirms that 44 per cent of them will increase when the price and VAT rises are taken into account.
The will be very sigificant rises for people who make local calls only. Their average bill will rise by 16 per cent. A further 34 per cent of residential telephone users who make only local and trunk calls will see their bills rise by an average of over 12 per cent. Overall there in no change for the remaining 56 per cent of customers who will see the cut in overseas calls cancel out the price increase of their local calls. This gives the lie to so much of the bamboozling statistics which the Minister was throwing around in his speech, as he and Telecom have been doing for the past week, to claim that the cost of the vast majority of calls will come down.
The Deputy is not too bad at it himself.
Of course, it is not just my view that misleading information was given. I see that view was also held by my old friend, Minister of State Burton, who said that the announcements surrounding these increases lacked sensitivity, and she stood beside the Minister when saying that. She went on to say:
.... I think most Members of this House would agree [I am sure they would] that the misleading and disingenuous advertisements placed by Telecom Éireann were both offensive and unhelpful.
The Minister is good on European law because she also states that it remains to be seen whether they were even in breach of the law, both domestic and European. Therefore, I am not the only one to hold that view.
A Deputy
Refer that to Deputy Jim Kemmy.
Free calls for the dirty dozen.
Last night the Minister in his speech made such assertions as "There is therefore a net reduction in the average charge for calls on residential bills" and said that the analysis of the December billing shows that "most customers benefit from reductions". But the second table provided by the Minister concerning the telephone bills of 102,000 old age pensioners is also of interest. That reveals that while 43,000 of them should have a reduction in their bill because of the impact of reduced overseas calls, the other 58,000 will see their bills go up.
By amount? The Deputy should indicate by what amount.
Ten per cent reduction.
Deputy Cox's calls on the international line will be reduced.
There is an extraordinary irony also running through the Minister's speech last night that is worth noting. When he deals with the reduction in the cost of overseas calls he refers repeatedly to competitive pricing and how vital it is. He listed a number of sectors of industry, where, incidentally, most of the use of the telephone is on a lease line basis so that they are not affected by the charges per call on a public system. He said that the importance of competitive international tariffs is obvious. I and my party certainly agree with the Minister on that, but what about the importance of competitive, reasonably priced telephone services for domestic users and for our business and services sectors in particular?
So Telecom Éireann should not compete for that business either?
Multinationals.
The Minister seems to assume that the level of costs they have to bear will have no bearing on their competitiveness, whether on the home or foreign markets. Of course, that is absolute nonsense.
One travel agent has been in touch with me today to say that he calculates — and Telecom Éireann agrees with his calculation, because he rang them up and asked them to do it - that his present annual telephone bill of £24,000, 75 per cent of which is represented by local calls, will more than double. He finds this an intolerable burden and can only stay in business by letting go some of his staff. A lady who owns a telesales company informed me that she has decided to go out of business in September, when these increased charges come in, because she has no other option.
I would like to endorse the protests of the Irish Wheelchair Association, who demonstrated outside this House today to highlight the dreadful human price that mobility impaired people will have to pay for these major telephone price increases.
We are entitled to ask whether any independent analysis was done in relation to the proposed rates and Telecom's costs. Was the analysis done only by Telecom Éireann? In that event, why should the public believe it is anything other than a self-serving analysis to benefit its monopolist authors? What is now proposed is a telephone users advisory group to monitor the impact of the increased charges after they have been brought in; and, of course, that group will have no statutory powers or recognition.
Is this not the appropriate time to reconsider the sale of a large part of the RTE holding in Cablelink to Telecom Éireann and for the Government to order Telecom transfer their holding in Cablelink to another company which would be in a position to provide alternative telecommunications services and to enter into competition with Telecom in order to force it to reduce its costs and tariffs? Is it not also the time to consider the establishment of an office such as Offtel to monitor and regulate closely the monopoly operations of Telecom?
I find it frightening that the Labour Party should have decided to take the view it has taken. The Minister of State at the Department of Social Welfare, Deputy Burton, said that the privatisation of Telecom Éireann was not on the Government's agenda; neither was it prepared to stand by and allow the company to be weakened by competition from companies ten or 20 times bigger. Nobody who spoke in this debate suggested that Telecom should be privatised. It is a red herring which has been dragged into the debate to try to gain support for the untenable position in which the Labour Party finds itself. It is remarkable that the Government will not allow Telecom to be weakened by competition from other companies. This may well be the view of the Labour Party, but I wish to remind it that we live in a European Community which has a very different attitude to this matter. Whether or not the Labour Party or anyone else likes it, they will have to learn to live with competition. They will also have to learn to live with a situation where they will not get away with the monopolistic practices it was possible to get away with before Article 90 of the Treaty of Rome began to be interpreted in the way it is now interpreted, which is for the benefit of all people in the Community and, in particular, Irish people.
What about the grannies of Kinnitty?
Amendment put.
The Dáil divided: Tá, 71; Níl, 50.
Tá
- Ahern, Dermot.
- Ahern, Michael.
- Ahern, Noel.
- Bell, Michale.
- Bree, Declan.
- Brennan, Matt.
- Brennan, Séamus.
- Broughan, Tommy.
- Browne, John (Wexford).
- Burke, Raphael P.
- Briton, Joan.
- Byrne, Hugh.
- Callely, Ivor.
- Collins, Gerard.
- Costello, Joe.
- Coughlan, Mary.
- Cowne, Brian.
- Davern, Noel.
- de Velera, Síle.
- Doherty, Seán.
- Ellis, John.
- Ferris, Michael.
- Fitzgerald, Brian.
- Flood, Chris.
- Foley, Denis.
- Gallagher, Pat.
- Geoghegan-Quinn, Máire.
- Haughey, Seán.
- Howlin, Brendan.
- Hughes, Séamus.
- Hyland, Liam.
- Shortall, Róisín.
- Smith, Brendan.
- Smith, Michael.
- Stagg, Emmet.
- Jacob, Joe.
- Kavanagh, Liam.
- Kemmy, Jim.
- Kenneally, Brendan.
- Kenny, Seán.
- Killeen, Tony.
- Kirk, Séamus.
- Kitt, Michael P.
- Lawlor, Liam.
- Lenihan, Brian.
- Leonard, Jimmy.
- McCreevy, Charlie.
- Moffatt, Tom.
- Morley, P. J.
- Moynihan, Donal.
- Moynihan-Cronin, Breeda.
- Mulvihill, John.
- Nolan, M. J.
- Ó Cuív, Éamon.
- O'Dea, Willie.
- O'Donoghue, John.
- O'Hanlon, Rory.
- O'Shea, Brian.
- O'Sullivan, Gerry.
- Pattison, Séamus.
- Penrose, William.
- Power, Seán.
- Reynolds, Albert.
- Ryan, Eoin.
- Ryan, John.
- Ryan, Seán.
- Treacy, Noel.
- Upton, Pat.
- Wallace, Dan.
- Wallace, Mary.
- Walsh, Eamon.
Níl
- Allen, Bernard.
- Barry, Peter.
- Browne, John (Carlow-Kilkenny).
- Bruton, John.
- Bruton, Richard.
- Carey, Donal.
- Clohessy, Peadar.
- Connaughton, Paul.
- Connor, John.
- Cox, Pat.
- Creed, Michael.
- Cullen, Martin.
- Currie, Austin.
- Deenihan, Jimmy.
- De Rossa, Proinsias.
- Durken, Bernard J.
- Finucane, Michael.
- Fitzgerald, Frances.
- Flanagan, Charles.
- Fox, Johnny.
- Foxe, Tom.
- Gilmore, Eamon.
- Gregory, Tony.
- Harney, Mary.
- Harte, Paddy.
- Higgins, Jim.
- Hogan, Phillip.
- Kenny, Enda
- Keogh, Helen.
- Lowry, Michael.
- McCormack, Padraic.
- McDowell, Michael.
- McGahon, Brendan.
- McGinley, Dinny.
- McGrath, Paul.
- McManus, Liz.
- Molloy, Robert.
- Nealon, Ted.
- Noonan, Michael (Limerck East).
- O'Donnell, Liz.
- O'Keeffe, Jim.
- O'Malley, Desmond J.
- Owen, Nora.
- Quill, Máirín.
- Rabbitte, Pat.
- Sargent, Trevor.
- Shatter, Alan.
- Sheehan, P. J.
- Timmins, Godfrey.
- Yates, Ivan.
Tellers: Tá, Deputies Browne (Wexford) and Ferris; Níl, Deputies Keogh and O'Donnell.
Amendment declared carried.
Motion, as amended, agreed to.