Dáil Éireann debate -
Wednesday, 10 Nov 1993

Vol. 435 No. 7

Private Members' Business. - Telecommunications Bill, 1993: Second Stage (Resumed).

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

Mr. Kemmy

I am sharing my time with Deputies Michael Kitt, Denis Foley and my colleague, Deputy Seán Kenny.

There have been decisions in Europe which are relevant to telecommunications in this country. Indeed, a decision has been taken for the full liberalisation of telecommunications throughout Europe over the next five years. We in Ireland have been given five years to build up an infrastructure. That is a good thing. It will cost about £100 million to do that, but those five years can be used to advantage to enable us to update our technology and to compete on the same basis as other countries. Unfortunately, the competition at international level is intense and it will not go away. Telecom Éireann is trying to compete with is rivals internationally in a fast changing technological world and at the same time do the best it can for domestic users. It is hard to do both at the same time and Deputy Noonan of Fine Gael knows this very well.

At present there is restructuring going on at Telecom Éireann. I support that and hope it continues to produce efficiency and more effective cost analysis. Telecom Éireann has been making great efforts in recent times to adjust its policies and its workforce to the modern world. That has been lost sight of in this debate. In recent times Telecom Éireann has sent many of its workers on contract to Britain. They have competed on the best of terms with British workers. They have acquitted themselves very well and have been a credit to Telecom Éireann and to this country. More workers are about to go to Britain to work on contract for British Telecom.

I have heard nothing about the German or French experience in this regard. Despite some of the statements made by Deputy O'Malley, they have not gone down the road of privatisation. The French and the Germans know what they are about because they have a long history in telecommunications and have the very best of modern technology. Privatisation has taken place mainly in Britain resulting in increased costs of electricity and water. British domestic telephone calls are the dearest in Europe.

Competition is already part and parcel of Telecom Éireann which has given a good service to the Irish community, something that should not be gainsaid in this debate. I have listened to the Fine Gael speakers. Much of what they said was shallow and superficial, rhetoric without depth, what I described in the House last week as verbal jazz.

Mr. Noonan

(Limerick East): The Deputy is a good judge of that.

Mr. Kemmy

Yes, I am a connoisseur of music, and I have listened to verbal jazz in this regard. Deputy Noonan used skilful rhetoric to conceal the inadequacy of his case. It was sound and fury, signifying nothing. There is nothing behind this Bill. It is but an attempt to embarrass Telecom Éireann and the Government, but it will not succeed. Unless their case is well grounded, unless they are really concerned about helping Telecom Éireann, I cannot support the Bill. I reject it as having nothing much to offer Telecom or Ireland. It is an attempt to get cheap publicity at the expense of Telecom Éireann and its workers and I will be asking my colleagues to vote against it.

Mr. M. Kitt

I want to compliment Deputy Noonan on introducing this Bill. Obviously he will not be able to please everybody because the Government is rejecting it and even Deputy O'Malley said it does not go far enough.

I do not know if the Bill is about privatisation. That has been the subject of argument. I had one experience of privatisation in Galway County Council in relation to the refuse service some years ago. Although it was certainly successful in the areas where it was introduced, it took the council two years to persuade the contractors to serve the Connemara area. They were reluctant to do so because of the rough terrain and isolation of the Houses they had to serve. There is always the danger of cherry picking when it comes to privatisation.

On the question of competition, I wonder what sort of competition Deputy Noonan refers to. An economist, Mr. Patrick McNutt, wrote in the Irish Independent last week that “Competition in the telephone markets is no longer about price competition but competition in technology”. The outcry over the summer months was about charges. Now that we are told it is about technology, we must accept that. Mr. McNutt went on: “The future of the Irish telephone market is not about house-to-house competition in the supply of hard wire phones to every home in Ireland, but in the interactive TV and telephone market which allows telephone calls to be transmitted along the same wires that carry TV programmes.” He goes on to say that Fine Gael's Bill is misguided, that “it is naive to argue that Telecom's increase in domestic charges may be in breach of competition policy”. He says: “There is a bigger picture and Telecom as a company have to position themselves as a company with global potential.” There are many serious questions that Telecom Éireann must deal with. I hope the package introduced by the Minister and the work by Telecom Éireann itself will be successful.

I want to mention a few points in regard to my own county. I have some suggestions and some criticisms of Telecom Éireann. For example, I do not know why three telephone directories are required to find all the telephone users who live in East Galway. I share a three-seat constituency with Deputy Noel Treacy and Deputy Connaughton. Already 10,000 people from that area in North Galway have gone into the Mayo directory but Telecom Éireann has decided that some areas of East Galway should be in the 05 telephone directory and other areas in the 06 telephone directory. This is hard to understand.

There are nine call codes in County Galway. Before protests were made about the three minute limit for local telephone calls it was difficult to know what constituted a local telephone call in County Galway. Approximately 400,000 telephone users live in the 01 local call area in Dublin and greater Dublin as against a few thousand telephone users in, for example, the Clifden area. Matters improved two years ago when the then Minister for Telecommunications, Deputy Brennan, and Telecom extended the local call area in Galway. I discovered I could ring not only 09 codes but also 0505 and 0509 codes at the local call rate. I could ring, for example, Banagher, Ballyhaunis and Ballaghaderreen. However, I would not have to call areas of Mayo, Roscommon and Offaly very often. The majority of the telephone calls I and my neighbours make are to Galway city, which does not fall within the local call rate. People make telephone calls to the hospital, local authority, health board, vocational education committee, the university and regional technical college located in Galway city. I call on Telecom to make Galway city and county a local call area.

The basis of the attractive offer whereby one may make a ten minute trunk call at the weekend to any part of Ireland, North or South, at the local call rate presumes that in the future local call rates will apply throughout the country. At present the local call rate does not apply to calls made to Galway city from the county area. Under the rebalancing package people have welcomed the fact that they can ring their friends and relations on a Saturday and Sunday at bargain prices. It is interesting that British Telecom has imitated the Irish proposals and introduced a similar service. I welcome the inclusion in the rebalancing package of special assistance of £500,000 for the eight crisis lines, including the Samaritans, Childline and rape crisis centres and 20 free call units per bill for beneficiaries under the free telephone rental scheme.

The Minister has set up a telephone users group to sort out matters and give an independent view on the position and I welcome that. He has also said he will publish the report of that group and we should wait until it is available to inform telephone users of its findings. I wish to share the remainder of my time with Deputy Foley.

Mr. Foley

I would like to share my time with Deputy Seán Kenny. Like my colleague, Deputy Kitt, I wish also to congratulate Deputy Noonan on introducing this Bill.

Telecommunications is one of the most rapidly developing technological areas of industry today. A modern, progressive telecommunications system is vital to the long term interest of Irish industry and our economy.

I welcome the new telephone users advisory group set up in mid-September under the chairmanship of Professor Noel Whelan, vice-president of the University of Limerick. I am also pleased that Monica Prenderville, national president, of the ICA, is one of the members of this group. The advisory group is completely independent and its assessment of how the new tariff structure is working will help restore the customers' confidence in the telecommunications service. Regarding the rebalancing package there will be some winners and losers on an individual basis. I look forward to the group monitoring the impact of the changes across all the various user group categories and reporting on the effects periodically.

I hope also that the group will take within its remit the anomalies in certain counties where there are three or four codes as referred to by my colleague, Deputy Michael Kitt. For example, in Kerry there are three codes, 064, 066 and 068. This has been the position for several years and I am sure my colleague, Deputy Deenihan, will refer to this matter. Recommendations have been made already to Telecom and the Minister for a single code for the county. This recommendation has come from a cross section of business people and private consumers and I hope the position will be clarified sooner rather than later. The time is now opportune for Kerry and other counties to be given a single area code.

The advisory group will also be open to receive complaints of a general nature from consumers. As they have a direct link with the Minister, I hope they will avail of this channel to make recommendations to improve customer service.

It is intended to maximise to the greatest extent possible the amount of competition in telecommunications services in Ireland. This means that Telecom Éireann must get its operating costs down, so as to provide cheaper and more efficient services for its customers. I understand the company has already made remarkable strides in improving efficiency and the quality of its service and I look forward to further improvements in this sphere.

The phrase "global village" was once used to describe how modern technology has effectively reduced distances between nations. To this I would add the term "global market". Participation in this global market is central to Ireland's interests. However, our participation in contingent on our technological and telecommunications ability. This is all the more important in the case of Ireland where we suffer from geographical disadvantage in comparison to our fellow EC member states. In fact one can argue that Ireland should have a telecommunications system superior to that of our EC neighbours in order to help offset our geographical disadvantage.

It is apt that we should be discussing telecommunications today, but one cannot discuss telecommunications in this country without referring to Telecom Éireann. We must be very mindful of the valuable assets and human resources which constitute Telecom Éireann and which are entrusted to the Government on behalf of the taxpayers. The task of this Government is to maintain and develop top quality telecommunications for those who require them, but on an efficient basis at reasonable cost. However, I do not believe the Bill before us addresses this balance. It is deeply unbalanced.

In order to place this debate in context it is essential to look beyond the economic value of Telecom. It has enormous social significance also. Telecom is an important employer in rural Ireland. It has helped bind rural Ireland into the fabric of the country. In contemplating any changes to Telecom we must stop and think carefully about the impact this will have socially, particularly on those communities who depend greatly on Telecom.

Bearing those concerns in mind I have grave reservations about the Fine Gael Bill. I believe if it is implemented it will have a negative impact on rural Ireland. This Bill proposes abolishing Telecom's individual right to run the Irish telecommunications system. What would happen to Telecom's public service obligations in such an event?

Private companies by their nature are profit driven. Such companies would care little for public service obligations and would have no interest in providing services from which they would not make a profit, for example, in areas such as rural Ireland. Under this Bill I could envisage a two-tier telephone system, where profitable services are available for those who desire them while non-profitable services with great social value are left to decay. Rural Ireland would pay the price of such a system. That is not the telecommunications system that I would like for this country. I can only presume that this Bill is very much a superficial proposal designed with party political rather than national interests in mind. Surely if they think about it Fine Gael could not seriously sponsor such uncaring and short-sighted legislation.

This is a Bill that would pave the way for a privatised Thatcherite system that would see profitable services cherrypicked or sold off while socially vital services would be allowed waste away, with little consideration for those who depend on such services. This is what I referred to earlier when I indicated that this Bill is unbalanced. In abolishing Telecom's exclusive privilege this Bill would throw open to outside speculators the most profitable aspects of our telecommunications network. This in turn would endanger our ability to provide a high quality service nationwide, which is the most important objective of all. This would be a disastrous course to follow. It would mean dispensing with our ability to manage our telecommunications affairs, in essence giving away an important aspect of our life.

Mr. S. Kenny

The Labour Party is opposed to the Fine Gael Bill because it runs contrary to our viewpoint on the future development of the Irish telecommunications industry. There are four main objections to the Bill. First, the European Commission has a policy on telecommunications which does not require basic telephone services to be opened up to full competition in any European country until 1998. Ireland has been given a further five year derogation until the year 2003. If the Commission, which has overall responsibility for the most effective and efficient development of the telecommunications industry in Europe, recognises that this timescale is appropriate for the introduction of full competition in Ireland, it is difficult to understand why Fine Gael wishes to have full competition immediately.

Although a huge investment has been made in the telecommunications infrastructure in Ireland in the past ten years, we are still behind the European average in terms of access to telecommunications services. The recently published National Plan aims to increase telephone penetration from 70 telephones per 100 households to 82 per 100, at a cost of £75 million. Overall investment in the telecommunications infrastructure for the period of the National Plan will be £870 million, £30 million of which will come from Structural Funds. How is Telecom Éireann expected to fund this level of development, bearing in mind that it already has debts of £1 billion from development costs, and at the same time fend off competition? It is this exceptional developmental requirement that persuaded the Commission to give the derogation in the first place.

When people speak of competition in telecommunications services they are not referring to competition as we normally understand it but rather to the fact that Telecom Éireann would be obliged to lease lines and capacity on exchange equipment to its competitors. The competitor would have no responsibility for providing services in rural areas which are not profitable. The ambition of any competitor would be to cherry-pick the most profitable areas.

The principal question that must be asked is: who will benefit from this legislation, if passed? Implicit in the Fine Gael rationale for the Bill is that the absence of competition led to recent price increases. Paradoxically the reverse is true. It was the growing level of competition in international telephone traffic that forced Telecom to reduce prices. Up to then there was a £72 million per annum cross-subsidy between international and domestic customers, and to compensate for the loss of international revenue, Telecom raised the domestic charges. Competition as proposed by Fine Gael would undoubtedly focus on international traffic and compound the existing problem, resulting in increased prices for the ordinary consumer. The proof of this thesis can be seen in Britain where there is a high degree of competition but where domestic charges are higher than in Ireland. The only beneficiaries of the Fine Gael Bill, if passed, would be British and American multinational telecommunications companies such as British Telecom, MCI, Cable and Wireless, AT & T, US Sprint and so on, who would try to make a killing by creaming off the lucrative international business. It is difficult to see how this could be in Ireland's national interest.

The case for continued public ownership of Telecom has been extensively documented and debated. It is Government policy to keep the company in public ownership. I would like to draw attention to the fact that the new French Government, which is centre right in composition, has chosen not to include France Telecom in its privatisation programme. Neither has the German Government gone down that road. In Britain the gloss has worn on the privatisation experiment. As indicated by previous speakers, domestic consumers there pay the highest telephone charges in Europe and prices for electricity, gas and water have risen significantly. The privatisation of electricity has ruined the British coal industry. Public opinion has become disenchanted with privatisation and there is great opposition to the privatisation of British Rail and Scottish Water. We predict that the end of the UK privatisation era will come when the Government drops its plans to privatise the Royal Mail, the British post office. A strategic alliance with another operator is an option that must be explored by Telecom Éireann. All the indications are that within the next ten years the world's telecommunications industry will be controlled by no more than half a dozen operators providing what are known as global seamless networks. In the last week British Telecom announced the launch of a strategic alliance with MCI to pioneer global services and pool technical and marketing resources. To have a giant of that size on the doorstep would not be very comfortable.

Joint ventures do not necessarily require a one-sided sale of shares. There are a number of possible options, the best one for Telecom being a framework agreement whereby two or more parties make an agreement, the terms of which would be legally binding and enforceable. I am very concerned that a joint venture strategic alliance based on the core business of the company should not become a toe-hold for a predator. Cable and Wireless would not be a suitable partner in any circumstances as it has an appalling record on industrial relations. In 1991 it sacked more than 1,000 workers at three days' notice in Hong Kong. At the same time it failed to recognise the MSF union in the United Kingdom. It has an active policy of nonrecognition of trade unions and for that reason it should not be encouraged.

President Clinton, in his inaugural address, spoke of the extent to which trade is now global and the implications of that for the American economy. The multinational corporations reached the same conclusion ten years earlier and they also concluded correctly that telecommunications would become the key infrastructure supporting trade. They set out on a conscious policy of taking control of telecommunications out of the hands of national governments. Some analysts talk of a Telecom industry by the year 2000 in which five or six super-carriers would provide network management for global business. If one accepts the 19th century analogy with the railways, we must be concerned at the awesome economic and, by extension, political power that would be concentrated in the hands of organisations who have no allegiance to any country.

Mrs. T. Ahearn

I wish to share my time with Deputy Paul Connaughton and Deputy Jimmy Deenihan.

An Leas-Cheann Comhairle

Is that satisfactory? Agreed.

Mrs. T. Ahearn

The announcement by the Minister for Transport, Energy and Communications last May of the increase in telephone charges for local calls by almost 400 per cent caused an uproar throughout the country, and rightly so because it was an appalling decision introduced by a Minister who is proud to be ruthless. Worse still, he is arrogant, caring little for the people who are forced to shoulder the price of his actions. The recent announcement by Telecom Éireann that it is losing almost £750,000 per week is proof that the decision taken by the Minister in rescheduling telephone charges is a downright fiasco. The 8 per cent reduction in the number of calls made by residential telephone users together with the decrease in the duration of calls by 6 per cent could cost the company £39 million in a 12-month period. We must remember that the consumer is suffering. Irrespective of a supreme effort on their behalf to reduce their calls, 50 per cent of domestic bills have nevertheless increased by 10 per cent. In reality this means that householders have failed in their gallant efforts to compete against the rebalancing programme and their bills have soared.

How can any Minister or indeed anybody in the Government parties defy reality? The company is suffering huge losses and consumers are facing escalating bills. The Minister and the Government must shoulder responsibility for this fiasco. Now that the first bills have been issued surely they must admit that the outcome is very different from that predicted. It was crystal clear from the very beginning that this entire package was shabbily and hastily prepared. It was unclear from the word go as to what exactly the Minister was proposing. He dodged and ran from questions and misinformation was rampant. He claimed first that all bills would be reduced and failed to disclose the transferral of VAT charges to the customer. In addition, increases in fax and call box charges were hidden. Worst of all, some of the increases were introduced before the stated starting date. No one can deny that all of this is evidence of a Minister who did not know what he was doing or what he wanted to do. It is evident that the Minister did not want anyone else to know his intentions. He is responsible for one of the worst decisions taken by the Government, and he cannot shrink away from this fact. He deliberately attempted to pull the wool over the eyes of the public as he charged ahead with quadrupling the cost of local calls and trying to disguise the increases in VAT.

I support the Bill because it is clear that a new approach to Telecom Éireann is necessary to ensure that we can continue to compete effectively in the vastly changing and demanding world of telecommunications. I support the main purpose of the Bill which is to enhance Telecom Éireann, a company deserving of our praise for its service and productivity. However, we need to be ahead of events rather than running after them. The Minister must accept that technology is changing rapidly and it is vital for the telecommunications industry to keep apace. However, the Minister cannot continue to impose impulsive changes, similar to those announced, which will have disastrous results not only for the consumer but also for the company.

Telecom Éireann cannot be allowed to continue having little or no regard for its customers. Only a company which enjoys a monopoly could boldly adopt such an attitude. The message given by way of the rescheduling plan was that customers should use the telephone less. It is surely exceedingly strange for any company which wants to grow and expand to tell its customers to cut down on the use of the services it offers. This is surely a luxury which belongs solely to a company which enjoys a monopoly. This is a tragedy for the consumers who have no one, least of all the Minister, to protect their interests.

The Minister is company-oriented rather than consumer-oriented. What we need is a Minister who will willingly try to cater for the interests of both parties. Unfortunately we do not have such a Minister. For that reason the proposals in this Bill are essential rather than desirable. Putting off the day of competition for Telecom Éireann is a regressive rather than a protectionist stance. It is short sighted and lacking in courage and failing in confidence. It is an indication of taking the seemingly safe rather than the challenging course for Telecom Éireann; it is a detrimental attitude for the company it is supposed to protect. It is very naïve of any company to think that it can pick or select the day which suits it to face competition. By the time that day arrives the company will have well passed the stage where it has any hope of surviving competition.

The Minister's indecisiveness is detrimental to Telecom Éireann, its workers and consumers. He has failed to face the blunt reality that we can never look upon ourselves as an island in terms of the telecommunications industry. Whether or not we like it we will have to face competition in this industry. Many of the Government speakers tried to convince us that now is not the right time for the introduction of competition in this area. When will be the right time for the introduction of competition? This cop-out is a run of the mill excuse dished out in all similar circumstances. Keeping out competition is never the answer to any company's problems, whether it be Telecom Éireann or Aer Lingus. One cannot succeed in keeping out competition forever.

In introducing this Bill, Deputy Noonan has had the foresight to see down the road. His proposals will have to be introduced eventually, in all probability when it is too late. Lessons should be learned from the Aer Lingus débácle where procrastination and failure to confront the reality which faced the company as far back as 1988 has meant that the survival measures for the company in 1993 are much harsher on workers and consumers than would have been the case if action had been taken five years ago.

Telecom Éireann must not be allowed to end up in a similar position. Why can the Minister and the Government not be influenced by the experience in other countries where competition has been introduced into the telecommunications area? If one examines the experience in Sweden, the United States, Japan and the United Kingdom it is obvious that the introduction of competition led to a growth in the industry and the number of jobs. Can anyone logically claim that the same would not happen in Ireland if careful and well organised competition was introduced on a staged basis? If Ireland is to expand economically and industrially telecommunications must be provided at a competitive rate in the foreign and domestic markets.

The Minister for Transport, Energy and Communications, Deputy Cowen, cannot and should not be allowed to pursue policies which show a total disregard for Telecom Éireann's consumers. As with any product, the most important variable is price, not just price for some customers but the right price for all customers. Deputy Noonan's Bill is about forward planning, fair play for all, the long term survival of Telecom Éireann, the protection of jobs and the needs of the people and the country. If the Minister is honest he will have to admit that the only thing wrong with the Bill is that it has been proposed by an Opposition party and reveals all too clearly that his policies are misguided and misdirected. It is not yet too late for the Minister and the Government to face up to reality, to come down from the clouds and to take a brave step in the interests of Telecom Éireann and its customers. I have pleasure in supporting this Bill.

Mr. Connaughton

I wish to share my time with Deputy Jimmy Deenihan.

An Leas-Cheann Comhairle

Is that agreed? Agreed.

Mr. Connaughton

I am delighted to have the opportunity to speak on this very sensitive Bill which would, in essence, enable Telecom Éireann to develop to meet the challenges of the future while at the same time provide the public with an option in so far as telephone charges are concerned. I do not understand why the Minister and Telecom Éireann run scared at any suggestion of competition — they have done this both last week and this week. If Telecom Éireann is as technically advanced as we are told, it should not have much to worry about in terms of competition.

Telecom Éireann is a valuable component part of Ireland's economic and social activity. A modern vibrant economy cannot perform to its full potential if it does not have a highly sophisticated telecommunications network. I want to give credit where it is due and to criticise where appropriate. Telecom Éireann possesses a core of highly motivated and trained staff both at engineering and administrative level. The vast sum of taxpayers' money which has been pumped into Telecom Éireann by successive Governments for over 20 years has paved the way for a good technical foundation for the company which, in turn, will provide a sound telephone and fax service both within and outside the State.

Telecom Éireann used its commercial acumen to build on this huge State investment when it took over control of this area from the Department in 1983. There has been a profound improvement in the service since then. This is something we should tell the world. I can find no fault whatever with our telephone service. However, like many other companies in a similar position, I detect an air of arrogance in Telecom Éireann towards many of its customers. This is due to its monopoly position. I am referring to a time even before the rebalancing act in regard to telephone charges. I believe Telecom Éireann adopted a very arrogant attitude towards many of its customers. I have had first hand experience of Telecom Éireann customers, many of whom are elderly and live alone, who for one reason or another did not pay their bills by a particular date. I should say that everyone has a responsibility to pay for a service they have received. I am not making a case for not paying one's bills but on many occasions, for one reason or another, people were unable to do so on time and they were not given a second chance.

I am aware of small businesses whose services were disconnected for the slightest delay in payment and hefty re-connection charges were imposed. On some occasions those re-connection charges amounted to £135. It is my understanding that there is almost no cost involved to Telecom Éireann to reconnect a customer. Would Telecom Éireann act in that way if there was another company selling a telephone service?

I have no doubt whatever that thousands of people have received a huge bill at one time or another for no apparent reason and which was not similar to any of those for other billing periods. We are told that Telecom Éireann is always available to discuss this problem but the constituents I represent have received scant attention from the company. If there was another company in competition with Telecom Éireann, that would all change. I have seen it happen many times in other businesses. The customer deserves a better service.

Monopolies are dangerous and in this instance there is a great responsibility placed on the shoulders of the Minister and senior mangement of the company to treat customers with dignity and respect, taking into account their individual problems. It is almost impossible to keep companies in touch with the realities of the market place without competition.

The latest re-balancing act is quite a conjurer's trick. I do not believe that the fall-off in telephone usage will be maintained and I predict a return to a much higher telephone usage very shortly. Telecom Éireann customers were frightened by the severity of the increase in local call charges during day time hours. For many categories of telephone users, including self-employed people such as garage owners, insurance brokers, shop keepers and a host of other service industries, the charges will prove very costly indeed. This important category of our business sector deserves better treatment. Irrespective of Telecom Éireann public relations propaganda to the contrary, the vast majority of calls must be made in office hours and, therefore, the costs will rise.

However, the hardest hit of all are the elderly and the people who live alone. The elderly should not be denied the right to speak to their family members or friends during office hours from Monday to Friday. That is a terrible sentence to impose on the elderly having regard to their contribution to Irish society. In effect, they are now classified as second class citizens and are essentially debarred from making calls during the day. They have to wait until the evening or Saturday or Sunday to speak to their loved ones and those who are worried about them.

Telecom Éireann, and the Minister in particular, should be ashamed of themselves in regard to this issue. This evening I have received almost 50 signatures from three small senior citizens groups in north Galway who meet on a weekly basis. They implored me to register their protest on the record of this House. My understanding is that there are many more such groups, not only in my constituency but all over Ireland, who genuinely believe that they will be required to pay much higher costs. Why should they not believe this if the cost of local calls during normal business hours is quadrupled? If they are to avail of the same telephone contact with their families as they have had heretofore, the outcome will be a huge increase in their telephone bills. I want to ensure that the Minister and Telecom Éireann understand the plight of the people whose signatures I have received.

I do not want Telecom Éireann taken out of public ownership. This Bill has nothing whatever to do with privatisation and it is disingenuous of people to claim otherwise. We want to allow competition. When the private road hauliers came into operation people said that CIE would go to the wall, but we have never had a better system. I understand that because of the competition the various sections that now make up what was know as CIE are much more cost effective. They are carrying more passengers and are generally believed to be doing a very good job. That is the parallel to which I am referring and it has nothing to do with privatisation.

I wish to refer briefly to the users group that has been set up by the Minister. I do not doubt the honesty and integrity of the people involved. They are all people who have been successful in the public and private sectors. However, as a group it is absolutely toothless because all it can do is regurgitate the information they receive from Telecom Éireann and pass it on to the public. At the end of the day, we will be no better off and that is why the independence of the Minister, the Department and Telecom, to which Deputy Noonan referred, will be in the interests of every telephone consumer.

I confirm the statement by my colleague, Deputy Kitt, that in east Galway, one is required to have three telephone books to cover that constituency because of the the different area codes. I do not know the answer to that problem but one would need a library to accommodate telephone books for one's constituency. This problem should be addressed. Because Galway city is our administrative centre, everything is based there. Our council headquarters, health board offices and all our other services are situated there and the people of the county are entitled to ring Galway city for the cost of a local call. I hope Telecom Éireann will implement that.

I hope the day will come when we will have competition in regard to telephone services. Most people do not like competition when they are in situ but the evidence from a variety of other sectors of Irish society has proved that competition is the life of trade. It was never more appropriate than it is now. I cannot understand the fear of competition, both in Telecom Éireann and in the Government parties. Competition will not happen overnight; we must work progressively along that road. A policy that might be accepted now for the future may not in fact be put in place for perhaps three, four or five years.

At the end of the day, as Deputy Ahearn said, if Telecom Éireann and the Government fail to recognise the problem, we shall have another Aer Lingus débâcle on our hands in a couple of years' time. Who will we be able to blame then? Must we go through the same trauma being experienced at Dublin Airport at present? Obviously, the Minister, Telecom Éireann and planners must know exactly what we are endeavouring to do through the introduction of this Private Members' Bill. I know there is no possibility of its getting a Second Reading here this evening because this Government can do what it likes with its huge voting majority. It can do what it likes, when it likes, how it likes and obviously will do so this evening. But if we shall have done nothing else in Fine Gael, we shall have warned them that there is a better way. Members should think twice before voting against the Second Reading here this evening.

Mr. Deenihan

Before commenting on the Bill I should like to acknowledge the work of Telecom Éireann and its employees in this country. We have here what can probably be described as a state of the arts telecommunications system. It has been one of our greatest advantages in attracting industry here. However, times are changing so rapidly that even though we have now a state of the arts telecommunications network, we could be left behind by developments in other countries who are in the course of developing their networks even beyond the level of ours at present. That is why it is so important that Telecom Éireann be encouraged, if not forced to upgrade their competitiveness. We cannot allow Telecom Éireann — or, for that matter, any State agency here — to become complacent merely because they may have a monopoly in their sphere of operations.

That competitive element comprises the main thrust of this Bill. I listened carefully to some Labour Members who had the concept of privatisation running throughout their contributions. Before the last general election the Labour Party engaged in a very skilful campaign endeavouring to convince the electorate that Fine Gael and indeed Labour's present partners in Government, Fianna Fáil, and the Progressive Democrats wanted to privatise Telecom Éireann.

Mr. Broughan

And Aer Lingus.

Mr. Deenihan

And Aer Lingus, that is correct.

(Interruptions.)

Mr. Deenihan

I did not interrupt Labour Members in the course of their contributions. Deputy toddy O'Sullivan became very excited during an earlier across-the-floor exchange with Deputy Jim O'Keeffe on this Bill. For a while I was worried that he would develop some coronary complaint as a result. The Labour Party engaged in that very skilful campaign and were engaging in the same exercise here this evening without having examined the provisions of this Bill, its good points or whatever. At least it can be said that many Fianna Fáil speakers considered its merits and supported some of its provisions, because they realise that the present direction of Telecom Éireann coincides exactly with Labour philosophy vis-à-vis Aer Lingus — do not give an inch until it is too late when the whole thing collapses. We in Fine Gael do not want to see this happen to Telecom Éireann. After all, it was Fine Gael who set up Telecom Éireann. We are proud of it and want to ensure its survival through being a vibrant State agency.

Deputy Foley mentioned the social contribution of Telecom Éireann, something to which I should like to refer briefly. There is no doubt that Telecom Éireann has been providing a major social service in rural areas, especially in recent years, although for many years Telecom Éireann, because of inadequate resources or whatever, had refused to provide telephone lines to isolated farms. But it must be acknowledged now that they are catching up and providing lines to isolated farm, premises usually occupied by one or two old people. This is of enormous assistance to them. I should like to see that policy continued in any future system. This Bill will introduce competition into telecommunications services, including telephone services. Its main purpose is to afford greater protection to telephone users and other consumers of telecommunications services while creating a vibrant telecommunications industry here. As previous speakers on this side of the House have said, this Bill is not about privatisation; it is about competition, the buzz word of Europe at present. There was mention of countries such as France, Germany and so on in relation to privatisation. However, Labour Party spokespersons failed to mention that there is already competition for these services obtaining in those countries. They spoke of privatisation but failed to recognise the existing competition in those countries.

Mr. Broughan

It exists here.

Mr. Deenihan

Everybody is aware that the Government and its partners mishandled the scheduling of telephone charges. This has meant that those people using their telephones mainly for local calls face hefty increases in their telephone bills which will be further aggravated by the 21 per cent VAT the Government plans imposing on telephone accounts early next year. When the Government increased telephone charges a much wider issue was raised. People felt angry because they were given no choice, there was nowhere else to turn. Fine Gael believes that competition constitutes the surest way of lowering prices and of obtaining a better service for the consumer, which should be the concern of all of us since it is they who elect us to the House. Competition is the issue, not ownership.

Fine Gael has no proposals to privatise Telecom Éireann but believes that Telecom Éireann needs a strong, international partner to enable it grow and prosper. Members, especially on the Fianna Fáil benches, hinted at that and accepted the validity of that principle in the course of their contributions. It must be said that in countries which have introduced such competition into their telecommunications networks the wealth generated by those activities has increased significantly. I am thinking of the USA, the United Kingdom, New Zealand, Japan and Sweden. The introduction of competition into our telecommunications services will render this country a more attractive location for industry and led directly to extra jobs.

I should like to point out that the main provisions of this Bill are, first, to appoint a Director of Telecommunications. This person's main task will be to protect consumers' interests by introducing competition into the provision of telecommunications services, to set out a fair schedule of charges, for those services — something nobody should disagree with — to promote research into new badly needed telecommunications techniques, to help manufacturers of equipment to compete in supply both within and outside Ireland, which is also needed, and to investigate users' complaints.

I agree totally with the proposal contained in the Bill to set up an independent regulatory authority, independent both of the Minister and of Telecom Éireann.

Mr. D. McDowell

I should like to share my time with Deputy Eoin Ryan.

An Leas-Cheann Comhairle

Is that agreed? Agreed.

Mr. D. McDowell

Deputy Deenihan has said correctly that the Labour Party is not in favour of the privatisation of Telecom Éireann. It is worth asking ourselves why that is the case. We are not in favour of it because we believe in the maintenance of a universally-supplied, low cost telecommunications service here. We are not in favour of privatisation because we believe it is the responsibility of the State and Government to ensure that a service is available not merely to domestic consumers in Dublin, Donegal, Kerry or Cork, but also to those who use it for business purposes. We are also not in favour of it because we believe that in an important industry such as this we should seek to maintain and protect jobs. If you like, we are not on an ideological ride here; we are doing something for entirely practical, sensible reasons.

Deputy Deenihan says that Fine Gael is not in favour of privatisation. I accept what he says at face value. But because of the nature of competition referred to in this Bill, which Fine Gael readily advocates, it is undermining the capacity of Telecom Éireann to behave in the fashion we require of them; it is undermining Telecom Éireann's capacity to provide a service to all parts of the country and to all consumers, as well as their capacity to retain jobs. The past experience has been that if you introduce competition invariably it disimproves the working conditions of workers in that industry. Indeed, we had that experience in Aer Lingus when we had competition, supposedly provided by Ryanair, during recent years.

I believe this Bill has been tabled not as a contribution to the debate about the future of telecommunications in Ireland, but to capitalise on the recent public disquiet about the rebalancing of tariffs by Telecom Éireann. Not only did the Opposition exaggerate the effect of the rescheduling on the domestic consumer but in this Bill they are seeking to develop the strategy further by implying that the immediate introduction of what is called competition can resolve the difficulties facing the Irish telecommunications industry in the nineties.

Whether we like it or not, the recent rebalancing came about largely because of the presence of limited competition in international services, not because of the lack of it. Regardless of the savings made on international calls the number of multinational companies willing to provide quality cheap services in the west for local calls will be few and far between. The 1992 EC Directive on the establishment of an internal market for telecommunications services within the community insist that tariffs "must in principle be cost based". As a result of this, Telecom Éireann was under a legal obligation to change its previous practice. The Opposition is hardly suggesting that the implementation of this EC Directive represents an abuse of monopoly power, since it was devised by the very competition directorate in Brussels whose duty is to enforce the competition policy of which they speak so lovingly.

Undoubtedly, Telecom Éireann will have to complete in the new competitive environment in telecommunications for the remainder of this decade. In this context, links with other companies will have to be considered. I believe these links should be on a partnership basis with other companies which does not involve a diminution of Irish ownership or State ownership of Telecom Éireann. However, when the day of competition comes, as it undoubtedly will, Telecom Éireann must enter into that agreement from a position of strenght. Although the Council of Ministers has agreed on 1988 as the date for the implementation of the liberalised internal market, Ireland should make use of the additional five-year period which we will be able to get. This time should be used to further develop Telecom Éireann as a modern and cost efficient company.

The introduction of alleged competition elsewhere has not succeedded in rewarding the consumer with lower charges. In Britian, the flagship of privatisation, domestic call charges are higher than anywhere in Europe. These high charges are certainly not generated by high labour costs since both British Telecom and Mercury have radically reduced their number of employees during the past number of years and work practices in both those companies have deteriorated substantially, so much so that Telecom Éireann is supplying contract labour to British Telecom.

I know that management and unions in Telecom Éireann are aware of the challenges facing the company during the next ten years. In the past decade, since it was set up, the company has been turned around from a loss maker to a profit maker; from being a drain on the State they have become a dividend payer. Complaints about Telecom Éireann to the Ombudsman have steadily declined. That progress must continue. To compete in the new European market either joint ventures or framework agreements may be necessary. However, it is critical that Telecom Éireann be given the time it needs to develop to meet this challenge. The Irish consumer, and particularly the domestic consumer, has nothing to benefit from an undermined Telecom Éireann at this stage and that is the effect which this Bill would have.

Mr. E. Ryan

I welcome this debate and I congratulate Deputy Noonan for bringing the Bill before the House. It is good that the Opposition and also the Government have an opportunity to spell out their own policy in this area which is rapidly changing. It is an important area of service and is a part of the economy which is changing and needs to be looked at on a regular basis.

The forces driving change in the telecommunications industry fall into three broad categories. They are technological, regulatory or governmental. In that I include the EC dimension and, of course, consumer forces. The importance of these, individually, varies depending on which country we are talking about, but in Ireland we are now on the very threshold of change. Technologically we have kept pace with developments and it is with some pride that I say we have excelled in overcoming the difficulties inherited from previous times. I do not have to remind many Members in this House of the previous difficulties in our own telephone system which, at one stage, was the biggest political issue of its time. The march of technology shows no signs of slowing and in many ways it may be said to be driving the other two forces I mentioned.

When Alexander Bell invented the speaking telephone in 1876 it was not universally welcomed as people felt it would be an invasion of their privacy and it was of little value. Today we can see that those fears were not borne out because we now have approximately 550 million telephone subscribers worldwide and approximately 30 million people worldwide have mobile telephones — that is a huge number of yuppies.

Mr. Deenihan

There are a lot of them around this House.

Mr. E. Ryan

Motorola, one of the biggest manufactures of mobile telephones, estimates that approximately two-fifths of the world's workforce are nomadic and have the potential to use a mobile telephone. That is an area of growth. We can see it in this House where we have regulations on the use of mobile telephones within the House.

Deregulation is also gathering pace in the telecommunications sector. It is driven by an international recognition that competition brings a diversity of solutions and a more efficient allocation of resources generally. Within the European Community itself, the Commission has been promoting competition at a brisk pace. The new technical possibilities create new market opportunities and these call for regulations, especially where the market remains dominated by the State. Fairness is the important criterion. Regulation, whether by national governments or at Community level, must take account of the dominant position of the monopoly operator and its ownership of the backbone infrastructure on the one hand, and its universal service obligations on the other.

The consumer is increasingly important in all of this. It is the consumers wellbeing which is, after all, the concern of regulation and he or she is the raison d'être for the universal service obligations placed on the monopoly operators. There was some discussion on the other side of this House during the debate on this Bill about the need for Telecom Éireann to respect its customers and how competition is just the thing to make them do it.

There is no doubt that competition is a stimulus to efficiency and to improved service; we are all in favour of that. If the introduction of competition is carried out in an unstructured way the last state of that consumer might well be worse than the first by the time free market forces are in full swing. This is especially the case where no care has been taken to work out in advance the longer term effects on the less protected sectors of the economy and to provide for a fair allocation of responsibility for maintaining a truly national telecommunications system. This Bill, whatever its true purpose, would rapidly have such an effect.

We on the Government side are not afraid of these forces for change. We have heard both the Minister and the Minister of State during the course of this debate declare their acceptance of the competitive challenge and, most importantly, their determination to put Telecom Éireann in a position to take it on and prosper.

During the debate Fine Gael pointed out the great job Telecom Éireann has done. While it has brought forward the Bill and supports it, it is also afraid of the backlash from those working in Telecom Éireann if such a Bill was passed. To a certain extent it is trying to be on both sides of the fence at the one time. I am sure anybody who is involved in Telecom Éireann will see through it.

That in trun, is the most striking difference between the respective approaches of the Opposition, as exemplified in the Bill before the House, and that of the Government. The Government's approach does not embrace the simplistic notion that unbridled competition cannot be stopped, should not be controlled, and ought to be invited in at the first available opportunity. That is what this Bill would do and the best opportunity to do it was that afforded to the party opposite by the fall-out from the rebalancing issue.

The interaction of the forces for change which I have described, now brings us to a crucial change. We cannot, in the style of King Canute, try to hold them back but we can choose to channel them in the direction in which we want them to lead us. The alternative is to allow them to overwhelm us. In spite of the protestations of those proposing this measure that would be its effect. This Bill says we can no longer control our own destiny; that Telecom Éireann has failed us; that the time has come for radical new departure; that we should cut our losses and drift along in whatever direction the free market takes use. We reject that approach.

The introduction of independent regulations in the UK was the subject of the 1984 UK Telecommunications Act. We have the more eye-catching aspects of that legislation before us in this Bill. That Act, however, runs to over 100 sections and several lengthy Schedules. In short, it was the culmination of a long period of debate and reflection in a very different economic and ideological climate from our own and it encompassed a thorough going structure for the telecommunications industry in the UK for the long term. That structure is based upon a privatised telecommunications sector.

The primary task before us is to maintain and further improve our telecommunications industry, to ward off the threats and to exploit them by turning them into opportunities to secure the competitive edge we need and which we are capable of attaining.

The Minister for Transport, Energy and Communications, Deputy Cowen, has given the House an indication of his thinking on the future of the telecommunications sector. It adopts the more reasonable approach of steering us in a structured manner into the competitive future. He has stated in the plainest terms that he intends to take the necessary action to stimulate the development of this critically important sector without undue dely. The Government is predisposed to increased competition and to independent regulation because, in fact, they go hand in hand.

The main difference is that we, on this side of the House, are mindful of the valuable assets and human resources which constitute Telecom Éireann and which are entrusted to our care on behalf of the Irish taxpayers. We are also mindful of the universal service obligation — the need to give the fullest consideration to protecting the weakest and most remote sections of society and ensuring they have access to the national telecommunications system. Fine Gael recognises this but it is not saying how this can be guaranteed under its proposed changes.

Modern life and economic and social activity could not function without an efficient and satisfactory telecommunications service. In a nutshell, the Government's policy is to see that those services are provided to those who need them and are securely underpinned, are economic and efficient and are provided at a reasonable cost. Whatever detailed legislation, administrative and organisational arrangements are necessary to bring this about form the core of Government's broad functions.

The Government has, in addition, specific responsibilities arising out of its ownership of Telecom Éireann, at present the largest player in this sector, and it must ensure that public assets are used and developed in a competitive framework. I should not have to elaborate on Telecom Éireann's key role. Our prosperity and competitiveness as an island trading nation depends on the telecommunications networks both in and outside the country. We have come a long way in the past decade in equipping ourselves with a modern system. We have demonstrated our ability to innovate, to acquire and to use the latest technology, not only in Telecom Éireann but in other communication companies and in all our main business enterprises. In many respects we have reached the position that other countries are still striving towards.

I ask this House not to throw that away in this unstructured measure. The task of designing the regulatory framework for the future will not be easy. It will not be so difficult or so long in coming that we should give more consideration than necessary to measures such as this. This House has the Minister's undertaking that he will get on with the job. With confidence, I urge Deputies to let him do so and to reject this Bill.

Mr. Noonan

(Limerick East): I thank all the Deputies who contributed to the debate. We heard some good contributions during the six hour debate and certainly anyone who has listened to it or who will read the record will be more informed as a result. In particular, may I thank the Deputies from the Fine Gael Party whose very detailed speeches supported this Bill and the Fianna Fáil backbench Deputies who saw some merit in the Bill and were not afraid to say no?

Let me restate the objectives of the Bill: first, to remove regulatory control from the Minister and the Department and to enshrine it in an independent agency or authority which will be headed by a director of telecommunications; second, to allow the same statutory authority to progressively introduce competition as I believe competition will lead to greater efficiency and will put downward pressure on prices. There is nothing in the Bill about ownership. I know the Labour Party likes to wrestle with shadows as well as with its own conscience——

Mr. Broughan

What is the real objective?

Mr. Noonan

(Limerick East):——but on this occasion, because it would not deal with the merits of the Bill, it invented a ghost for Members to wrestle with in their speeches, which I think were all coming from the same master script as they were playing variations on a theme. If Members on the Labour benches did a little research and wrote their own speeches they would give a more authentic version of the Bill.

Mr. Broughan

We do.

Mr. Noonan

(Limerick East): The choice facing the Minister and all of us with an interest in telecommunications, is whether we control the change and manage it or behave as Deputy Eoin Ryan says, in the style of King Canute, standing on the beach and ordering the waves of change to stop. It is quite clear that it is much better to control the change. Two things are changing very rapidly: first, technology is changing and it is not true to say that we can build a wall around Ireland and the forces of technological change will not bring in competition, willy-nilly, whether the Government likes it or not.

In my opening speech I referred to two aspects of this, the increasing possibility of wireless services through mobile phones and low trajectory satellites and that will be put in place shortly. There are also a series of judgments of the European Court of Justice which is trimming the scope of state telecom monopolies. A number of judgments, to which I will refer later, were published as late as 27 October 1993, just three weeks ago, which have trimmed the scope of the monopoly and will force competition. I think it is better to go with the flow and regulate it in our own interests rather than be dragged kicking and screaming into the last decade of the 20th century. To a large degree it was the attempt of Aer Lingus to fight against irresistible market forces that has put it in the position it is in today. I think the people who are irredentist in their approach to Telecom Éireann, rather than helping the company will cause a great deal of difficulty down the road.

I did not particularly like the Minister's attitude. I think he was uncouth, contradictory, and mendacious in certain respects. He lays charges which are not correct and I wish to deal with them. He said this is an opportunistic Bill. While it may be seen as that by those who believe the Dáil should not be relevant to the people's needs, when was it more timely to have a full debate on Telecom Éireann and the telecommunications industry than now, a week after it was announced that the rebalancing was costing £750,000 per week? If that happened in any commercial private enterprise there would be a shareholder revolution, an emergency general meeting and the managing director would be fired. Yet the Minister says it is opportunistic to debate this matter in the national Parliament.

The rescheduling was an absolute fiasco over which the Minister presided. He added insult to injury by saying that we should all pretend it never happened and stay silent in case we offend the chiefs in Telecom Éireann. The Minister accused me of stating that telephone bills would go up by over 400 per cent, which I did not, but I pointed out when the reschedule came out that up to the point one could make a 15 minute call for a set price and after the rescheduling the cost of that 15 minute call had gone up by over 420 per cent.

Mr. Cowen

Just 3 per cent of all calls.

Mr. Noonan

(Limerick East): The Minister may argue the statistics all he likes but that is the position. I was told the Bill was badly drafted and I admit it is no great draftsman's miracle. It is not supposed to be. It outlines the issues of principle which we are giving the House to debate. The Eolaí Oifigiúil states that the Minister has approximately 1,200 civil servants in his Department. The Minister has enough experience of Opposition to know the resources I have and to accuse me of producing a badly drafted Bill in those circumstances is a bit ridiculous.

I have a list of the legislation which the Government intends to bring forward. It includes 32 measures, but not one in respect of telecommunications coming from the Minister's Department. Yet the Minister has the gall to accuse me of drafting incorrectly when he has produced nothing. It is ridiculous.

Mr. Cowen

Why not put down a motion?

Mr. Noonan

(Limerick East): The Minister has also accused me of aping British legislation. I hope Fianna Fáil is not reverting to the irredentist position of shouting “Up the Republic” and saying that borrowing from the British is a form of opposition.

Mr. Cowen

I am just quoting from John Kelly.

Mr. Noonan

(Limerick East): That, coming from a Minister who got up early one morning and crossed the bog to go to Jury's Hotel to get photographed with Princess Anne——

Mr. Cowen

Courtesy.

(Interruptions.)

Mr. Noonan

(Limerick East):——on 5 February this year is not a sustainable position, but I am glad there is movement in the Republican Party.

(Interruptions.)

An Leas-Cheann Comhairle

Deputy Noonan without interruption, please.

Mr. Noonan

(Limerick East): This is not an attack on the ownership of Telecom Éireann, although Deputy Kemmy seems to think it is an attack. Deputy Kemmy has accused me of empty rhetoric.

Mr. Broughan

What about section 3?

Mr. Noonan

(Limerick East): Have Deputies ever heard a person describing himself? I do not know whether or not Members listen to Gerry Ryan, but Deputy Kemmy is getting more like Terence on the “Gerry Ryan Show” with every day that goes by. “We are all God's children, God help us”— that is the Deputy Kemmy speech on any issue in this House. “I am in the Government, God help us, so why are you giving out about me, God help us, sure I have to defend them.” That is his cry and then he accuses me of empty rhetoric.

I do not mind that, but when the Deputy misleads the House about the position in Europe he is very illinformed. I would refer the Deputy and other Members of the House to the Financial Times of 26 October, which refers to Deutsche Telekom. In Germany they have a 1,000 page privatisation Bill, supported by the Government, the Telekom company and the Chancellor. The difficulty is that they have to change the Constitution and its needs a two-thirds majority. The two Government parties are negotiating with the Socialists, who are going along with them. From the newspapers Deputies will see that French Telecom has gone into an alliance with Deutsche Telekom and it got AT&T of America in to provide an international service. It will be one of the great big international companies, and yet we hear this nonsense from Deputies as if nothing was happening in Europe. Italy, Denmark, Holland, Spain, Portugal and Greece are all going down the road of selling shares in their companies. We are not advocating that here today, but the Labour Deputies would want to get up to speed with what is going on because at the moment they are talking a lot of nonsense.

Mr. Broughan

What about section 3, Deputy? Deal with your own Bill.

Mr. Noonan

(Limerick East): I like the Minister's claim that he would prefer to have a clean sheet on which to write an appropriate Bill. The last time I heard that was when I read the Thoughts of Mao Tse Tung, where he said that a revolution could be spoiled if other people got in ahead of the act, that one needed in the cultural revolution to wreck everything that was there and then one could paint pretty pictures on a blank page. I knew that the Minister was ambitious——

Mr. Cowen

The Deng Xiaoping of Fine Gael.

Mr. Noonan

(Limerick East):——but I did not think that to become Mao of the Midlands was one of his ambitions.

(Interruptions.)

Mr. Cowen

Will you lead them when you are 90? Will it take until you are 90 to get that far?

An Leas-Cheann Comhairle

Order. Deputy Noonan without interruption.

Mr. Noonan

(Limerick East): The Minister wound up his speech by saying he totally rejected my Bill, but of course this was a smokescreen of rhetoric behind which he was making major changes which he did not want the Labour Party to know about. The Minister announced in the course of his speech that he was setting up an independent regulatory authority. That is the first point in my Bill. As an intermediary step the Minister proposed to subdivide his Department so that one section of it would act as a regulatory authority before he could give Telecom Éireann statutory independence. The Minister also said that he was putting up mobile telephones for tender to the private sector to provide competition. This was a great move forward. The Minister said that the regulatory authority would have a role in relation to the general level of charges; yet the Minister accuses me for talking about a schedule of charges and says this would be anti-competition. As the week went by there was major movement from the Minister of State. The derogation which the Irish Government negotiated has now become a kind of injury time which we may not need because we may be able to score in the course of the match. At least the Minister of State made a reasoned speech, on which I congratulate him. There were fewer personal attacks in it than in the speeches of other Members.

The Labour Party attacked the Bill on false grounds. Their speeches were full of old-fashioned 1950s socialism, and this from a modern European oriented Labour Party. They are more like a party of the "moustache Pete's" of Europe rather than the party of the "moustache Dick" in Ireland.

Mr. T. O'Sullivan

Is that the best you can offer?

Mr. Noonan

(Limerick East): What has happened to cause the Minister to change? It is the changing face of technology, because the competition can come in from overseas without the use of wires. As well there are decisions of the European Court, including one about five weeks ago with which the Minister is familiar. Belgian Telecom was taken to the European Court of Justice because it tried to prevent a private company providing mobile telephone services. It lost the case on the grounds that the monopoly applied only to services which it was providing when the monopoly was given under EC law and that new services did not come within the scope of the monopoly. The Minister is putting a tender out to contract for the provision of mobiles because he has to do it under EC law.

I would refer the Minister to decisions of the European Court of Justice of a fortnight ago in relation to three cases where Belgian Telecom and French Telecom were taken before the court for infringing EC Directive 88/301/EEC on competition. The scope of the monopoly has been trimmed again. I will quote one paragraph from the Financial Times of yesterday. It says:

The court said that the 1988 Directive required member countries from July 1 1989 to ensure that the fixing of technical standards, their supervision and type approval of equipment were carried out by bodies independent from public or private undertakings involved in the commercialisation of telecommunications equipment or services.

That means that if one does not have an independent regulatory authority and insists on a monopoly one is in trouble in the provision of the equipment or the provision of the services and that the private companies can come in and compete. The only protection the Minister has is to set up the independent regulatory authority. I am glad that the Minister has announced that he will do that, but he is running ahead of the storm——

Mr. Cowen

You are in the eye of the storm.

Mr. Noonan

(Limerick East):——just as he was in the rescheduling of the charges. The Minister is waiting for trouble to arrive on his desk before he acts. Because of the change in technology and the decisions of the European Court in respect of the EC Directive of 1988 and restricting the monopoly, the Minister will have to move along the lines he suggested. That is exactly what I am talking about in the Bill — that we would have an independent regulatory authority and that competition would be introduced progressively. We are not making any proposals about the ownership of Telecom Éireann. Like my colleagues, I believe that Telecom Éireann will have to negotiate an arrangement with a suitable partner and will have to do it quickly. I am glad that Deputy Derek McDowell has the same view. There must be a suitable partner.

Mr. Broughan

Cable and Wireless?

Mr. Noonan

(Limerick East): French Telecom would be my option, but if the Deputy wants Cable and Wireless he is welcome to it. The Minister challenged me to produce any bill——

Mr. Cowen

You got one.

Mr. Noonan

(Limerick East): This will be interesting. I have a bill here for £145.70 for a month in respect of an Eircell phone. The total cost of the calls is £11.35, the total bill is £145.70. Apart from the cost of the calls the rest of it relates to overheads, fixed charges and so on — and the Minister tells me we do not need competition.

Mr. Cowen

Tell him to get rid of it.

Question put.

The Dáil divided: Tá, 36; Níl, 78.

Tá

• Ahearn, Theresa.
• Barrett, Seán.
• Barry, Peter.
• Boylan, Andrew.
• Browne, John (Carlow-Kilkenny).
• Carey, Donal.
• Clohessy, Peadar.
• Connaughton, Paul.
• Crawford, Seymour.
• Crowley, Frank.
• Cullen, Martin.
• Currie, Austin.
• Deasy, Austin.
• Deenihan, Jimmy.
• Doyle, Avril.
• Dukes, Alan M.
• Durkan, Bernard J.
• Finucane, Michael.
• Flaherty, Mary.
• Foxe, Tom.
• Kenny, Enda.
• Keogh, Helen.
• McCormack, Pádraic.
• McGinley, Dinny.
• McGrath, Paul.
• Mitchell, Gay.
• Molloy, Robert.
• Nealon, Ted.
• Noonan, Michael. (Limerick East).
• O'Donnell, Liz.
• O'Keeffe, Jim.
• O'Malley, Desmond J.
• Quill, Máirín.
• Shatter, Alan.
• Sheehan, P.J.
• Yates, Ivan.

Níl

• Ahern, Dermot.
• Ahern, Michael.
• Ahern, Noel.
• Aylward, Liam.
• Bell, Michael.
• Bhamjee, Moosajee.
• Bhreathnach, Niamh.
• Connolly, Ger.
• Costello, Joe.
• Coughlan, Mary.
• Cowen, Brian.
• Davern, Noel.
• Dempsey, Noel.
• Doherty, Seán.
• Ellis, John.
• Fitzgerald, Brian.
• Fitzgerald, Liam.
• Flood, Chris.
• Foley, Denis.
• Gallagher, Pat the Cope.
• Gallagher, Pat.
• Haughey, Seán.
• Higgins, Michael D.
• Hilliard, Colm M.
• Hughes, Séamus.
• Hyland, Liam.
• Jacob, Joe.
• Kavanagh, Liam.
• Kemmy, Jim.
• Kenneally, Brendan.
• Kenny, Seán.
• Kirk, Séamus.
• Kitt, Michael P.
• Kitt, Tom.
• Leonard, Jimmy.
• Martin, Micheál.
• McDaid, James.
• McDowell, Derek.
• Bree, Declan.
• Brennan, Matt.
• Broughan, Tommy.
• Burke, Raphael P.
• Burton, Joan.
• Byrne, Hugh.
• Callely, Ivor.
• Collins, Gerard.
• Moffatt, Tom.
• Moynihan, Donal.
• Moynihan-Cronin, Breeda.
• Mulvihill, John.
• Nolan, M.J.
• Ó Cuív, Éamon.
• O'Donoghue, John.
• O'Hanlon, Rory.
• O'Keeffe, Batt.
• O'Keeffe, Ned.
• O'Leary, John.
• O'Rourke, Mary.
• O'Shea, Brian.
• O'Sullivan, Gerry.
• O'Sullivan, Toddy.
• Pattison, Séamus.
• Quinn, Ruairí.
• Reynolds, Albert.
• Ryan, Eoin.
• Ryan, John.
• Shortall, Róisín.
• Smith, Brendan.
• Smith, Michael.
• Spring, Dick.
• Stagg, Emmet.
• Taylor, Mervyn.
• Treacy, Noel.
• Upton, Pat.
• Wallace, Dan.
• Wallace, Mary.
• Walsh, Eamon.
• Walsh, Joe.

Tellers: Tá, Deputies E. Kenny and Boylan; Níl, Deputies Dempsey and D. McDowell.

Question declared lost.