Dáil Éireann debate -
Thursday, 12 May 1994

Vol. 442 No. 7

Ceisteanna—Questions. Oral Answers. - Value-Added Services Application.

Eamon Gilmore

Question:

11 Mr. Gilmore asked the Minister for Transport, Energy and Communications if he has received an application from a company (details supplied) for a licence to provide long distance telephone calls within Ireland; if so, his response to any such application; if his attention has been drawn to concerns expressed at the annual conference of the Communications Workers Union at what delegates considered the favourable treatment being given to this company; his response to these concerns; and if he will make a statement on the matter.

Mr. Cowen

I have received no application from the company concerned in the terms outlined by the Deputy. The company did apply for, and was granted, a licence to provide what are called "value added services". It is one of 14 companies which hold a value added services licence under section 111 of the Postal and Telecommunications Services Act, 1983. Under this licence the company is offering international services under certain restrictions imposed by me under the Act and the EU directives which related to voice telephony.

My attitude to applications to provide telephony services, either for domestic or international traffic, is that they are approved only on the basis that they do not entitle the holder to engage in the simple resale of Telecom Éireann's voice service, i.e., what is known as "voice telephony service". They do, however, allow voice services that do not make use of the public switched network termination points at both ends. "Voice telephony service" as defined in Irish and EU law, is a reserved function of Telecom Éireann.

I am aware, from media reports of the recent Communications Workers Union conference, of references to the company in question being somehow favourably treated. I can assure the House that there is no question of favourable treatment being given to this or any other telecommunications company. The liberalisation of the telecommunications sector, which I would expect is now accepted as inevitable, will proceed in an orderly and impartial fashion in accordance with prevailing law and our EU obligations and take account of public services obligations met by Telecom Éireann.

I can appreciate that at a time of change, as is the case in the telecommunications area, concern for the future will be uppermost in the minds of those affected by the changes. However, we have to remember that change also brings with it new opportunities. As I said in my address to the union members at their conference "In facing competition and the challenges it brings, you are providing yourselves with an opportunity to take a very large slice of a much larger cake".

The Government wants to see Telecom Éireann positioned in such a way that it will develop further as an efficient and thriving company even in the face of challenges from competition.

Mr. Gilmore

The Minister will recall that the company concerned was permitted to provide international telephone services using lines leased from Telecom Éireann. Does the Minister's reply mean that this or any other company will not be permitted to lease lines from Telecom Éireann in order to provide long distance telephone service in this country?

Mr. Cowen

The question relates to allowing the company compete in Telecom Éireann's core business. I did not direct Telecom Éireann to do anything. The purpose of what I said was to clarify the position regarding the interpretation of voice telephony as defined in Irish and EU law. The services proposed by ESAT were not comprehended by that definition. There is no question, therefore, of opening up the Irish network to a private company. ESAT's service will be provided to its own customers and there will be no break-out facility at the Irish end of the link. The question of switching out and switching in is important in terms of the definition that applies and the licences that can be issued.

Mr. Gilmore

When does the Minister intend to make a decision on the application from Telecom Éireann for a rebalancing of the charges for leased lines? Is he concerned about the current position whereby Telecom Éireann is providing lines at approximately half the cost of that of British Telecom and is effectively subsidising private companies who are effectively now competing with Telecom Éireann?

Mr. Cowen

That issue is being dealt with by my Department. We are seeking further information from Telecom Éireann a number of matters and an exchange of information is currently taking place to allow us to properly assess a fair charge for leased lines. We hope to conclude that process as soon as possible.