I remind Members of the new procedure in accordance with recent modifications to Standing Orders. Members may now speak twice on amendments on Report Stage. However, the contribution may not exceed two minutes.
Telecommunications (Miscellaneous Provisions) Bill, 1996: Report and Final Stages.
Is that two minutes for each contribution?
On the second occasion.
So there is no time limit on the first occasion?
Providing the Deputy is relevant.
The Deputy is always relevant.
I move amendment No. 1:
In page 5, between lines 10 and 11, to insert the following:
"(3) Notwithstanding the provisions and instruments listed in the Second Schedule, the Minister shall, before transferring to the Director any functions relating to television retransmission services or matters connected therewith, introduce regulations providing for the continuance in operation of the deflector system of television retransmission.".
The amendment is a repeat of an amendment I tabled on Committee Stage which was voted down by the Government. Does the Minister have further information on the matter? The amendment seeks to permit the continued operation of the deflector system of television transmission, subject to the resolution of the legal and technical problems which exist.
The Taoiseach told a packed hall in Carrigaline that, in office, he would ensure there was competition between the MMDS and deflector systems. I understand the Government is committed to the programme for Government which contains a specific commitment to seek a resolution to these problems and bring about a situation where the MMDS and deflector systems could operate in competition with each other. If pledges contained in programmes for Government mean anything, the Government must move on this matter.
I am aware of the consultants and I wish to know if there has been any progress in that regard. Why did the Government include a pledge in its programme and then bring in consultants to consider whether it can be implemented? Election manifestos should be taken seriously but a programme agreed by parties about to enter Cabinet should be taken more seriously. I call on the Government to live up to its specific commitment on this matter as urgently as possible.
I expressed my views on Committee Stage when I requested the Minister to inquire whether the use of the deflector system was legal. The Minister confirmed that his Department's advice was that use of this system was illegal. He stated that the Carrigaline case was being examined and the position was on hold pending the outcome of that examination. Will the Minister elaborate further on this matter? He is aware that this is a contentious issue in areas where cable television and MMDS are not available and the only way people can receive programmes other than those transmitted by RTÉ is to erect special aerials which receive the deflected signal. The opinion of the Department, given to Deputies over the years, is that the Irish authorities do not have the legal right to authorise the acceptance of a deflected signal from a producer in another country. Clarification of this matter would be helpful.
It is extraordinary that the Taoiseach made a promise under pressure in a hall in County Cork during a by-election campaign. Deputy Brennan rightly raised this matter, particularly the promise given by the Taoiseach at that time. We have heard the Taoiseach make promises before in regard to other areas. He signed letters in my constituency to the effect that if his party got into Government it would build a bridge across Lough Corrib at Knockferry. Such a letter was signed by the then Mayo by-election candidate who is present and by the leader of Fine Gael, who has been in Government for quite some time and has not yet fulfilled that promise. I do not believe the public are as keenly aware as some Members of the Taoiseach's ability to make promises and make no attempt to fulfil them. That is rather a poor standard to apply to oneself in public life. I have heard the Taoiseach this morning put inaccuracies on the record. I have a way of dealing with that through the Committee on Procedure and Privileges and other procedures which I intend to follow in view of the inaccurate remark made by the Taoiseach this morning.
I find it extraordinary that the Minister of State, Deputy Stagg, is taking Report Stage. This deal was made by the Minister, Deputy Lowry, and we were not aware that the Minister of State had any role in the negotiations or discussions. It is also extraordinary that throughout the Committee Stage debate a contribution was not made by any member of the Fine Gael Party. The is the first time we have seen a member of Fine Gael during this debate, perhaps because the question of deflectors is raised in Deputy Brennan's amendment. I welcome Deputy Ring but I do not know if he intends to speak.
There are many interesting things happening at present. The Fine Gael Party is reluctant to defend the sale of this most important and valued national asset in which taxpayers have invested extraordinary large amounts of money over recent years. That asset is being sold to a foreign consortium. A total of 20 per cent is being sold for £183 million, the consortium has the right to purchase another 15 per cent of the company and another 14 per cent is being made available to the company's employees. A clause in the Bill states that the State shall continue to own a minimum of 51 per cent of the shares. No other outside investor can ever participate in our telecommunications industry through Telecom Éireann. A further opportunity will not be afforded to third parties to invest in Telecom Éireann, our major telecommunications industry. The deal has been sealed under the Bill and the House is being denied details of the special sweetheart deal made with that consortium, which has 20 per cent of the company and a right to acquire a further 15 per cent of it. That deal is most unsavoury.
Regarding the amendment, the Minister owes the House some explanation on the deflector system.
I want to say to Deputy Molloy that I am well able to speak for myself, not like the dummies in Fianna Fáil who were on this side of the House when the former Minister, Deputy Burke, signed an agreement granting the contract to MMDS.
We have a long distinguished history.
The Deputy should think back further to the time a former Minister, Deputy Jim Mitchell, signed an agreement.
The Deputy should shut up and let me speak. I am in possession.
Deputy Ring without interruption.
On a point of order, will the Chair ask Deputy Ring to address the national Parliament in a dignified manner? This is not a council chamber.
Acting Chairman
I intend to exercise control over the debate.
I will not take any lectures from Deputy Treacy or any member of the Fianna Fáil Party.
Acting Chairman
I appeal to Deputies making their contributions not to invite responses from the other side of the House. A limited time applies to the debate which is due to conclude at 1.15 p.m. Time wasted on exchanges across the floor of the House reduces the amount of time available for the debate.
Deputy Molloy made some comments about the deflector system. I support those who operate the deflector system in County Mayo. A multi-channel television service would not be available if local communities had not provided the necessary funds in an effort to put such a system in place. If we had been waiting for the Government or those who were given a licence to provide the service, we would have been waiting 20 years and would not have a deflector system. The Taoiseach has given a commitment that he will consider the matter with his Government partners to try to resolve the problem caused when the former Minister, Deputy Burke, signed over the contract to those who had plenty of money, but wanted to make more.
The Government now intends to transfer the matter to a director who will deal with it.
We are well used to promises in County Mayo. During every election campaign for the past 50 years a biscuit factory has been promised for Ballina. A hospital and a regional technical college were promised. The reason I am in the Dáil this morning is that the people of Mayo have had enough promises. They know what deliverance is.
What about the bridge the Deputy promised during your election campaign?
Acting Chairman
I appeal to Deputy Ring to keep to the point of the debate.
I am trying to do that. The Chair did not say that to Deputy Molloy when he——
(Interruptions.)
Acting Chairman
I ask other Deputies to stop interrupting.
Thank you, Chairman.
The Chair should ask the Deputy not to be derogatory about this great party.
I ask the Minister of State to do two things. Will he make available a copy of the contract signed by the former Minister, Deputy Burke, on behalf of the then Government?
It is a matter of public record, unlike what the Deputy's party is doing with State assets on a confidential basis.
When Deputy Cowen was Minister with responsibility for communications some equipment was seized from the community in Kiltimagh. Will the Minister indicate if that equipment can be returned?
I thought the Deputy would have got that back a long time ago. What has he been doing?
That happened when Fianna Fáil was in Government. The Minister of State, the Taoiseach and members of the Government know my views on this matter. Local communities should have the same opportunity to apply for a licence as those who have been given one. The court case in Cork has given local communities an opportunity to apply for a licence. I note that the Minister has brought in consultants from the European Broadcasting Union. I ask him to try to resolve this problem and I am confident it will be resolved. Fianna Fáil has been dealing with this matter since 1987. It was in Government for seven years and all it did in that time was to sign over the contract for the provision of the service to the wealthy people of this country. It did not consider the people in Donegal, Mayo or those who needed the service. If we were waiting for the State to provide such a service, we would have to wait 20 years. Those granted a licence will service the large urban areas and neglect rural areas. I am confident the Minister will resolve the problem. I would like a copy of the signed contract made available and the equipment to which I referred returned to Kiltimagh.
I am pleased to have the opportunity to support the amendment tabled by my colleague, Deputy Brennan, on behalf of our party. I live in rural Ireland and regard this as an important amendment. Taking account of the major advances in communications nationally and internationally — the communications industry knows no boundaries — I am baffled that rural Ireland is isolated and its people are treated as second class citizens compared with to those who live in urban areas and the Dublin metropolis. That is the case in regard to every aspect of the delivery of public services. Successive Governments have ploughed resources into delivering services to areas where the majority of people live and people living in rural areas have had to pay through the nose for all services. If a public service is available in rural areas, it is a scant one.
The same position prevails in the communications industry. If a deflector system were not in operation, multi-channel TV would not be available in rural Ireland. The is the sad reality because having regard to commercial investments and cherry picking in urban areas, investors, corporations and companies which provide those services have no interest in delivering them to rural areas because of the high cost of capital investment. Constitutional justice is called for in that the citizens of all parts of the country are entitled to equality of opportunity in terms of delivery of service. I accept that we are a member of the European Broadcasting Union and party to various broadcasting treaties — we signed legislative documents and directives which bind us to certain international agreements for communications and transmission of signals — but as a State that delivers and manages services on a daily basis we must ensure that, regardless of legislative impediments each citizen has equality of opportunity in terms of the methods of communication available to them. The Government, particularly the Department of Transport, Energy and Communications, must know that in modern times, with major innovations in technology and opportunities in communications, it is surely possible to find a technological system which will enable people in rural Ireland to avail of services similar to those in urban Ireland. We have a duty as legislators to ensure that such an opportunity exists for all our people and I hope this matter will be resolved.
Fine Gael in Government is passing the ball. I have been in this House for more than 14 years. During the by-election at which I was elected in 1982, when Fine Gael was in Opposition, the then Leader, Dr. FitGerald, signed a document stating that on return to Government as Taoiseach he would ensure that the beautiful meandering Dunkellin river would be drained.
What about the Shannon?
I was director of elections for a Mayo by-election when Fine Gael, in Opposition, signed a document stating that it would build a bridge over Lough Corrib at the north ferry connection, but that was not done either. I was involved in two by-elections in Cork and I heard the then Leader of the Opposition, now Taoiseach, give a public commitment, which was beamed out on the so-called illegal transmission channel, that on return to Government he would ensure this matter was regularised and legalised. After two years in Government that party, in a multi-coalition Government, has not even considered the issue. It has found itself in difficulties and now proposes to refer the matter to an independent neutral director who will be at arms length from everybody, with the power of the State behind him. Politicians will have no say in the work of this innocuous, invisible director who will make a decision in the interests of all Ireland, to the satisfaction of lawyers and advisers to Government who believe that is the way to proceed.
That shows the hypocrisy of this Government. Politics is debased by not honouring commitments. In Opposition and in Government we have been consistent. If we give a commitment we deliver to the people. The opportunity is here for the Government to deliver. The Government is a team of Ministers and Ministers of State with certain responsibilities and duties and if Deputy Ring is committed to this system he should ask the Taoiseach to direct the Minister to ensure that this matter is sorted out today so that he can happily return, with the technical equipment which he stated is stored in this city, to the people of Mayo and tell them they will have the same opportunity as the people of the metropolis.
This is an interesting amendment.
Acting Chairman
I appeal to Members to address their remarks to the amendments. The debate is tending to drift away from the amendments and it would be helpful if Members referred to the issue before us. I do not say that in criticism of Deputy McGinley, I am simply asking the Members present to respect that wish.
I intend to adhere to the subject matter of the amendment which relates to the retransmission of cross-channel stations through the MMDS system. The history of the MMDS system is as interesting as the amendment. Like Deputy Treacy, I was a Member of the House when the Wireless and Telegraphy Act was passed in 1988. At Christmas of that year two medium of communications were supposed to go off the air, pirate radio stations and deflectors, but while the pirate radio stations went off the air the deflectors remained. As a result of that Act this little country was franchised for £200,000 — ten franchises at £20,000 each — cable management companies were granted the exclusive rights to retransmit cross-channel stations throughout Ireland by MMDS systems. Very few companies tendered. One company in the south east submitted an application but was not even considered because its method of transmission was not MMDS.
The inside track was given to the MMDS system in 1989 by the then Fianna Fáil Government and since then that system has operated in many parts of Ireland. It is being introduced in the west and is planned in Donegal. Cross-channel stations were available in Donegal before we received RTÉ 1 and Network 2. Progressive local organisations in Donegal took it upon themselves to provide this service throughout the county and almost 50 local co-operatives have been transmitting cross-channel stations successfully at a very low cost to the consumer.
For a sum of £20,000 Cable Management of Ireland has been given the exclusive franchise for Donegal, Sligo, Leitrim and parts of Mayo. Every hamlet and townland in Donegal, whether at the top of a mountain or in the lowest valley, receives cross-channel stations perfectly by deflector — I say that without fear of contradiction. My concern is that if and when the MMDS system starts transmitting in that area, whose topography is unsuitable for such transmission, we will be unable to receive these stations. Can the company guarantee to the people of Donegal that it will give the level of service we have been getting through our own efforts for the past 20 or 25 years?
The MMDS system originated in Canada and the United States. As recently as last spring I had a meeting with the Minister for Communications in Ottawa during which we discussed communications and bilingualism in broadcasting there. When the meeting was over I raised with the Minister the question of the MMDS system and asked him how effective is its operation in that country.
I was told that the system was suitable for the prairies of Canada and the United States, where it is possible to walk for 20 days without seeing a mountain and lines of vision are uninterrupted for hundreds of miles. They told me it was very effective but that they were moving away from that system. I was told that MMDS is the system of the past, that they are looking to the future and to the satellite system. They are able to rebroadcast signals via satellites and the topography makes no difference as the signal is coming from hundreds of miles out in space. Other modern technologies, such as fibre-optic cables, are also available so MMDS is gradually being phased out in Canada and the United States. Is it fair that we should be harnessing this system when it is going out of use in the countries in which it originated?
I do not want to be unfair to CMI as the law is on its side. CMI brought 13 of my constituents to the High Court recently and succeeded in getting an injunction against them because it was prevented from installing its equipment and transmission masts in Donegal. The judge said that since 1988 the law has been on its side because it has the exclusive right to retransmit. I know the Deputy does not want to hear this but I want to make my case. CMI has the exclusive right to make these transmissions. The Government is tied into the straitjacket created by the 1988 legislation and the franchise granted by Deputy Burke in 1989 when he was the Minister responsible.
I am trying to identify ways of breaking out of that straitjacket. I have no doubt that if the Government decided to forget CMI and proceed with deflectors in Donegal and Mayo, it would be brought to court. These companies would be looking for and are legally entitled to massive compensation. It is estimated that in Donegal alone the income from transmissions is £3 million to £4 million per year. CMI has been given that exclusive right for 20 years which is worth up to £100 million.
I do not envy the Minister his job. The law is against him and the only way he can get out of this situation is to change it, which will cost him hundreds of millions of pounds. These companies have the exclusive right to make transmissions. I cannot say I am against the companies because they have right on their side and they will now invoke that right. It is frightening to find ourselves in this situation.
On a point of Order, I mean no reflection on the Deputy or what he is saying but very important amendments on trade unions, on the price and the major deal itself have yet to be discussed. This is an important issue, but we will finish at 1.15 p.m. because of a guillotine motion by the Government. I do not want to interfere with the Deputy in possession but the substantive issue needs to be addressed before 1.15 p.m.
I understand the Deputy's concern and will be guided by the Chair. I know there are other amendments about trade unions but this issue will affect the pocket of every taxpayer and consumer in this country.
I ask the Deputy to conclude on this point. He has made his point very well. A number of speakers are offering and anxious to get in and time is of the essence.
That is the straitjacket in which we find ourselves. I am glad that the Minister has taken so much time to crack this legal nut. No deflector has gone off the air for the last number of years. Consultants from the United States have been invited by the Minister and I hope any further development will be stopped until we see their report. As well as the cost of MMDS, I fear that it will not serve the people who have been receiving these cross channel stations in Donegal through their own efforts for the last 20 years. It would be unpopular and unfair to deprive them of these stations now. We will have satellites within a number of years and that is the way to go.
This is a vital question. Deputy Molloy had as little to do with this system as we did but we can talk about what Deputies who are in Opposition now said in 1988-89. I want those Deputies to admit that they enacted this legislation and imposed this system. If they have changed their minds and want to scrap it now, they can say so the minute they get the chance. I hope it is not another promise that will not be honoured. If they think what they did in 1988 was wrong they should admit it and tell us what they will put in its place. I would like to have satellite transmission in its place.
I know if we do that it will cost millions of pounds. We have paid millions of pounds in compensation to beef farmers, social welfare recipients and other groups who have been badly treated in the past and this will cost money as well. If we are to have a better system, let us find a solution. The Members opposite are a bigger part of the problem for inflicting the MMDS system on us than we are for trying to solve it.
Acting Chairman
I call Deputy Batt O'Keeffe. A number of speakers are listed. I appeal to Deputies to keep their remarks as concise as possible.
Instead of giving a history lesson that goes into a cul-de-sac, I will cite facts for Deputy McGinley. I refer him to the November 1995 by-elections in Cork, to a statement made before a packed house in Carrigaline at a function attended by many people concerned about the deflector system and particularly by members of the south coast community television group. On that occasion the Leader of the Opposition, now the Taoiseach, indicated that it was important to encourage local communities in any activities in which they became engaged. They should be encouraged and helped as far as possible. This is where we have a major shift in position. On that occasion the Taoiseach gave an absolute commitment that on entering Government he would grant a temporary licence to south coast community television and to other community groups involved in the deflector system, thereby changing the whole scenario. That commitment is on video and I have a transcript of exactly what the Taoiseach said on that occasion.
Will the Deputy read that transcript into the Official Record?
I will do so in my own time. An election is pending and this will be a good issue then.
There is a principle as well.
The Taoiseach said there would be no shilly-shallying or delay. He saw no difficulties. While one could conclude it was a vote-getting exercise at the time, it was a statement taken seriously by the people as it came from the incumbent Taoiseach. It was a commitment entered into by a very senior politician; a commitment to which one would give credence. The people in the South Coast Community Television area and those dependent on a deflector system were overjoyed at the prospect of the difficulties surrounding the licensing of this system ending when the Taoiseach went into Government.
Alas, that did not happen although I raised this issue on a number of occasions with the Taoiseach and with the Minister for Transport, Energy and Communications in this House. Is it any wonder that people feel they cannot rely on the commitments of politicians?
I am sorry the Minister, Deputy Lowry, is not here. I have the greatest respect for the Minister of State, Deputy Stagg, but this is an extremely important Bill and one would have expected the Minister to be here to take Report Stage. This Government is well known for putting consultancies in place. When this commitment could not be delivered on, another set of consultants were brought in place so South Coast Community Television and other groups could have discussions with them. What has been the result after 18 months? Nothing. No headway has been made on the commitment and South Coast Community Television and other community groups who are concerned about the deflector system find they have not moved an inch.
A more serious situation arises from this Bill in the appointment of a regulator. The Minister is using ingenuity, crassness and guile to slide away from the commitment given by the Taoiseach and handing to a regulator the responsibility for decision. During the by-election in Cork South Central Deputy Lowry was director of elections and was present when the Taoiseach gave the commitment. Deputy Coveney and many others from Fine Gael were also there. At the time the suggestion from Fine Gael was that legal advice had been sought on this issue from the monolith who is now the Attorney General. Did Dermot Gleeson advise the Fine Gael party that this was legally possible? If that was his advice then, what is the difficulty now? The Minister of State and the Fine Gael Party have to answer for the legal advice they touted to members of the public as coming from the eminent legal personality, Dermot Gleeson, and I expectantly await those answers.
The deflector system gave a choice of channels to people mainly in the west and southwest of Ireland when nobody else had any interest in giving them service because there was no money in it. These systems were mainly put up by communities on a non profit-making basis to supply a choice of channels. They are now being attacked. The argument against them in the past was that they would interfere with essential services such as ambulances. That argument has long since evaporated. Another argument being advanced related to copyright but nobody ever wished to proceed on that basis against them and nobody ever will. Nothing is being lost on it; some of the channels being picked up are delighted with the extra viewers, so that removes that argument.
What is now left against the deflectors? The franchise holders, who are seeking to extract the last penny from the lucrative franchises they were given in the late 1980s. That is the kernel of the problem. What will the franchise services do? Will they try to get into every pocket of the west and southwest of Ireland? They will not because the MMDS system is a line of sight operation and they cannot get in around the mountains, unlike the deflector systems. They are not interested in getting in there. They want to cream off the lucrative end of the market and leave the others with three channels, now that Teilifís na Gaeilge has started, but without any of the outside channels.
This is all about money. It is up to the Government to reach an agreement with the franchise holders, who have been given rights in law, but the Government cannot. In any case, this is a temporary situation because satellite television is coming in and MMDS will be outdated very quickly. As soon as it is, the MMDS operators will pull out if there is no longer any money in it. We must reach a compromise on this. The Government has consultants preparing a report. With that report and an agreement the Government should demand from the franchise holders, we should get a solution on this.
I agree with the thrust of Deputy Brennan's amendment. The deflectors must be sustained at all costs in the west, south and southwest. The Minister of State will bring this message back loud and clear to his Minister. He is from Mayo and knows the contours of the territory and that MMDS cannot bend its way around the mountains. If we have to have an alternative service, it must be the deflector system. I am confident the Government will insist that it is provided.
I commend the amendment to the House. The difficulty with the Bill is that there is now an attempt to take the responsibility for granting a licence from the Minister and to give it to an anonymous director. That is the key issue at the core of this amendment. Irrespective of the history of the situation, the deflector systems are still on the air throughout Ireland. We have South Coast Community Television in Cork and there are others throughout the country.
Quite a few of them have been knocked off.
Because South Coast Community Television took a successful court action the Minister is now acting under High Court obligation to process and move forward South Coast's application for a licence. As Deputy Batt O'Keeffe said, we witnessed the present Taoiseach giving the people of Carrigaline a solemn commitment that, immediately on returning to office, they would be granted a temporary licence. There were also strong suggestions that the Government would make good the community's losses in taking the action. Today, the reality is that a temporary licence has not been granted to them to proceed. Will the Minister of State guarantee to the House that his Minister and the Government will retain for themselves the power and decision-making role on the application from South Coast Community Television for a licence? Will it be the responsibility of the director or of the office this Bill purports to set up? We need a straightforward answer to that question. Will the Minister continue to have responsibility in respect of the licence application from South Coast Community Television in Carrigaline? There is considerable concern about this section and the degree to which it endeavours to take out of political control the response to the licence application from South Coast Community Television and other groups.
I was interested in comments about the legal straitjacket in which the Minister might find himself. It is interesting that Fine Gael Deputies are hearing from their Ministers that there is still a legal problem. The only question that arises is, why did the Taoiseach say he would give the people a licence if they put his party into power prior to the 1994 by-election? Perhaps he did not believe he would be in power so quickly and thought he could pull a fast one on the electorate of Cork South-Central. That is what it was about. Even in his wildest dreams he did not see himself in the Taoiseach's Office a month or two after that by-election.
He would not be that shallow.
Fine Gael took a premeditated decision on electoral grounds to cod the people. It said that it would give them a licence in the hope that two years would go by before the next General Election.
The Deputy's party said it would not give them a licence.
If the Minister looks at the High Court case and the reasoning behind the judge's decision, he will see that because the station stayed on air through so many Governments the judge said there was almost a de facto recognition by the State that it should be in operation.
Why did the Deputy's party not give it a licence?
That commitment was given prior to the by-election. There was an attempt to cod the people and we now face a long drawn out scenario in which the matter is being shifted to the director.
I welcome the wide-ranging contributions, although some were outside the scope of this amendment. Deputy Molloy, in particular, spoke in the knowledge that other amendments would not be dealt with today, which I regret. However, he covered the other amendments effectively.
The Minister brought in the guillotine.
I regret we will not have time to deal with other amendments. There is nothing extraordinary about a Minister of State dealing with a Bill from his Department. I am as capable as any other Minister of State and well able to deal with the Bill. This is normal practice.
The Minister of State is as capable as the Minister, Deputy Lowry.
Why was the Minister afraid to come to the House?
The Minister is not afraid to come to the House. He has been extremely active on this issue and has produced a good deal not only for Telecom Éireann, but for the workers, new partners and consumers. He is an extremely busy Minister who is president of three EU Councils of Ministers. It is appropriate that the Minister of State in his Department would assist in the work in the House and I am happy to do so in co-operation with the Minister. There is no agreement to sell 14.9 per cent of the company to employees.
The Second Schedule lists regulatory functions which will be transferred from the Minister to the director of telecommunications regulation. The regulatory functions which will be transferred from the Minister to the director of telecommunications regulation include legislative provisions relating to the cable television sector. The proposed amendment would prejudge the outcome of an independent consultant's report to the Minister in the Carrigaline case. Any decision regarding the long-term future of deflector systems must await the outcome of this analysis. The Minister's commitment to the High Court in the Carrigaline case will be honoured in full. Either the Minister or the director will give full and fair consideration to the application by the Carrigaline station for a licence.
That is a cop out.
Any implications which arise from that case for deflector systems elsewhere will be fully taken into account. I want to make it clear that these regulatory functions which the Minister has, along with many other functions will be transferred to a regulator. This is a desirable development. An independent regulator is being appointed to regulate.
The transfer of functions to the director need not give rise to any concern about the undertaking to the court because the functions transferred to the director are defined in section 1 to include powers and duties. If the decision on Carrigaline has not been taken by the time the director assumes office, the director will, in effect, stand in the Minister's shoes for the purpose of deciding the issue. It could not be clearer.
We suspected that.
The director is no less liable than the Minister to exercise these functions in a reasonable manner.
Will Deputy McGinley vote for that? Where is Deputy Ring?
This extremely difficult situation arose in 1988 when franchises were given to people for little or nothing. I am not here to lay blame on anyone or to say that Fianna Fáil was in power at the time, but that was the decision taken. Subsequently, the decision was considered a bad one by those who made it and by others. We need to find a method to rectify that. The amendment would not do so because it would mean that the Minister would have to make a decision before the end of the year which would cost the taxpayer hundreds of millions of pounds.
Why was that promise made?
That is not my business.
In view of the commitment given by the Taoiseach——
He was the Leader of the Opposition at the time.
——or the Leader of the Opposition, is it not incumbent on the Government to leave the decision with the Minister rather than give it to the regulator given the ruling in the High Court case?
Acting Chairman
Modifications have been made in relation to debates on Report and Final Stages. Deputies are entitled to speak a second time for two minutes but they are not entitled to put questions to a Minister.
Surely Deputies may do so if a Minister accepts the questions?
Acting Chairman
The Minister of State has not indicated——
This is a gracious Minister of State and he has accepted the questions.
Acting Chairman
I do not anticipate any opposition if the Minister of State wishes to respond to queries raised.
It is in everybody's interest to ensure a system is in place so people in rural areas can avail of multi-channel television. The Government has appointed consultants to advise it on how best that should be done and I hope they report shortly. There is no guarantee that the director will make this decision because he may not be appointed in time. The Minister could still be responsible for that decision if the director is not in place.
Forgive me for laughing.
The director will be appointed fairly soon.
During the various contributions it was stated by a Deputy that equipment had been confiscated in the past, presumably by officials of the Department of Transport, Energy and Communications, from companies operating what were deemed to be illegal deflection systems. Will the Minister of State tell the House the number of occasions that has occurred, where this equipment is now stored and the Department's intention in regard to it? Also, will he give some indication to the House when the consultants are expected to present their report on the deflector system arising out of the Minister's decision, subsequent to the decision in the Carrigaline court case?
I sympathise with the Minister of State but I thank him for the clear and concise way he replied to an important question for those of us living in the south coast area, stating that the Minister will transfer the power to make the decision on the implementation of any licence to a regulator. He knows only too well, however, that this decision will not be taken until after the next general election. In view of the fact that a strong commitment was given to the people of Carrigaline by the Taoiseach in the presence of the Minister for Transport, Energy and Communications and the Minister of State, Deputy Coveney——
Acting Chairman
The Deputy is taking liberties with the leniency of the Chair.
——is it not right, in light of the High Court decision, that that function be reserved for the Minister in question rather than an independent regulator?
Will the Minister of State indicate in his reply when he expects the office of the director to be established after the passage of the Bill? That is another key question in terms of who will decide on the south coast application for a licence, a matter with which we are particularly concerned.
Acting Chairman
The Minister of State has only two minutes to reply. Deputies will appreciate, therefore, that certain restrictions are imposed on him in that regard.
"Yes" and "no" answers will do fine.
I do not know the location of the illegal equipment. If the Deputy puts down a parliamentary question on that matter, which has nothing to do with the amendment, we will find out the information for him, including the volume and value of the equipment, who took it and whether it was returned.
Can I have that information in writing?
I am agreeable to that. We expect the consultants' report in late November. It would be a positive decision for any Government to decide to legalise what are now illegal deflectors and I am sure an attempt will be made by the Government in office to make a positive decision in that regard before the election. The reply to Deputy Martin's question is 90 days after the Bill becomes law. The Minister will be responsible, therefore, for a considerable period of time.
What has come out of the debate today is that it is intended that the regulator will tackle the problem. That is unsatisfactory from the point of view of the commitment given in the programme for Government.
That is not necessarily the case.
Amendment put.
The Dáil divided: Tá, 56; Níl, 69.
Tá
- Ahern, Bertie.
- Ahern, Dermot.
- Ahern, Michael.
- Ahern, Noel.
- Andrews, David.
- Aylward, Liam.
- Brennan, Matt.
- Brennan, Séamus.
- Briscoe, Ben.
- Browne, John (Wexford).
- Burke, Raphael P.
- Callely, Ivor.
- Connolly, Ger.
- Coughlan, Mary.
- Cowen, Brian.
- Cullen, Martin.
- Davern, Noel.
- Dempsey, Noel.
- Ellis, John.
- Fitzgerald, Liam.
- Flood, Chris.
- Foley, Denis.
- Fox, Mildred.
- Foxe, Tom.
- Geoghegan-Quinn, Máire.
- Haughey, Seán.
- Hilliard, Colm M.
- Jacob, Joe.
- Keaveney, Cecilia.
- Kenneally, Brendan.
- Keogh, Helen.
- Killeen, Tony.
- Kirk, Séamus.
- Kitt, Michael P.
- Kitt, Tom.
- Lawlor, Liam.
- Lenihan, Brian.
- Martin, Micheál.
- McCreevy, Charlie.
- McDaid, James.
- Moffatt, Tom.
- Molloy, Robert.
- Morley, P.J.
- O'Dea, Willie.
- O'Hanlon, Rory.
- O'Keeffe, Batt.
- O'Leary, John.
- O'Rourke, Mary.
- Power, Seán.
- Ryan, Eoin.
- Smith, Brendan.
- Treacy, Noel.
- Wallace, Dan.
- Wallace, Mary.
- Walsh, Joe.
- Woods, Michael.
Níl
- Ahearn, Theresa.
- Allen, Bernard.
- Bhamjee, Moosajee.
- Bradford, Paul.
- Bhreathnach, Niamh.
- Bree, Declan.
- Broughan, Tommy.
- Browne, John (Carlow-Kilkenny).
- Bruton, John.
- Bruton, Richard.
- Burton, Joan.
- Byrne, Eric.
- Carey, Donal.
- Connaughton, Paul.
- Connor, John.
- Costello, Joe.
- Crawford, Seymour.
- Crowley, Frank.
- Currie, Austin.
- Deenihan, Jimmy.
- Doyle, Avril.
- Dukes, Alan M.
- Durkan, Bernard J.
- Finucane, Michael.
- Fitzgerald, Brian.
- Fitzgerald, Eithne.
- Fitzgerald, Frances.
- Flaherty, Mary.
- Flanagan, Charles.
- Gallagher, Pat (Laoighis-Offaly).
- Harte, Paddy.
- Higgins, Jim.
- Higgins, Michael D.
- Hogan, Philip.
- Howlin, Brendan.
- Kavanagh, Liam.
- Kemmy, Jim.
- Kenny, Enda.
- Kenny, Seán.
- Lowry, Michael.
- Lynch, Kathleen.
- McCormack, Pádraic.
- McDowell, Derek.
- McGahon, Brendan.
- McGinley, Dinny.
- McGrath, Paul.
- McManus, Liz.
- Mitchell, Gay.
- Mitchell, Jim.
- Moynihan-Cronin, Breeda.
- Mulvihill, John.
- Nealon, Ted.
- Noonan Michael (Limerick East).
- O'Keeffe, Jim.
- O'Sullivan, Toddy.
- Pattison, Séamus.
- Penrose, William.
- Quinn, Ruairí.
- Rabbitte, Pat.
- Ring, Michael.
- Ryan, John.
- Ryan, Seán.
- Spring, Dick.
- Stagg, Emmet.
- Timmins, Godfrey.
- Upton, Pat.
- Walsh, Eamon.
- Yates, Ivan.
Tellers: Tá, Deputies J. Higgins and B. Fitzgerald; Níl, Deputies D. Ahern and Callely.
Amendment declared lost.
We come to amendment No. 2 in the name of Deputy Molloy. I observe that amendment No. 3 is related. I suggest, therefore, that we discuss amendments Nos. 2 and 3 together.
I move amendment No. 2.
In page 5, lines 16 and 17 after "plaintiff" to insert "or the defendant".
We discussed this on Committee Stage, during which the Minister stated that he had legal advice to the effect it was not acceptable to do what I propose. I inquired what the Attorney General's advice was but was given no detail. Will the Minister elaborate on why the Attorney General is advising him that it would not be appropriate to do what I suggest in my amendment?
Legal advice is given to the Minister through his officials on an ongoing basis over a long period while a Bill is in preparation. The culmination of all that advice was that I should not accept the Deputy's amendment. I am not in a position to override that accumulated consultation and advice.
Due to a time constraint and because other amendments are tabled it is not possible for me to tease out this point again. This guillotine is not satisfactory. I wish to record my dissatisfaction at the Minister's inability to give a cogent legal argument as to why the amendment could not be accepted.
It is not my job to give cogent legal arguments, that is the job of the Attorney General. I am satisfied that he gave me such arguments and that is the reason I cannot accept the Deputy's amendment.
Everything in regard to telecommunications seems to proceed with a blind man's buff attitude. We are asked to accept——
On a point of order, the Deputy is allowed speak only twice on Report Stage.
May I educate the Minister in regard to the rules of the House? This is my amendment and I am entitled to make a final comment. I am winding up. I never intended to take up so much time on it but we are getting unsatisfactory answers.
Amendment put and declared lost.
I move amendment No. 3:
In page 5, to delete lines 23 to 28.
Question, "That the words proposed to be deleted stand", put and declared carried.
Amendment declared lost.
Acting Chairman
We come to amendment No. 4. Amendments Nos. 6 and 7 are alternatives. Is it agreed that amendments Nos. 4, 6 and 7 be taken together? Agreed.
I move amendment No. 4:
In page 6, to delete lines 34 to 42, in page 7 to delete lines 1 to 44 and in page 8 to delete lines 1 to 9.
This amendment seeks to remove a section from the Bill which provides for a price cap. In other words, the Minister lays down that prices in telecommunications cannot increase by more than inflation over a period. That is anachronism, a silly and unnecessary approach. Telecom prices all over the world are coming down. To include a clause which provides that prices cannot be increased above a certain limit is old fashioned economics and telecommunications. It is unnecessary to provide in legislation for any price increases. My amendment seeks that this section be deleted. If anything we should be legislating for price reductions although the market will take care of that.
My advice is that I have to reply to all of the amendments which are grouped together at the one time. In relation to amendment No. 4, section 7 establishes a new method for the regulation of tariffs charged by providers of certain telecommunications services. The services which are subject to regulation under this section are those for which there is no competition in the market concerned and those which are provided by an undertaking which has a dominant position in the market concerned. The section provides that the Minister may make an order specifying an overall limit called a price cap on the annual percentage change in charges that can be imposed for a specified basket of telecommunications services provided by an undertaking. The overall limit is calculated as the annual percentage change in the consumer price index, less an adjustment specified by the Minister in the order. The initial price cap order is reviewable, after a period of two years, by the director at the request of the Minister. In addition the price capping function powers of the Bill are transferred under section 4. The director will have immediate powers to exercise these functions in respect of any areas of the market which qualify under the capping provisions and are not included in the Minister's initial order.
As announced on Committee Stage the first price cap order to be made by the Minister will specify an adjustment factor of 6 per cent. This means that Telecom Éireann's prices will fall by at least 6 per cent in real terms each year for the period of the price cap. Over the five year period of the price cap, Telecom's prices will fall by at least 30 per cent in real terms. The objective of this section's provisions include the creation of a stable regulatory environment in the period up to full liberalisation, the granting of flexibility for service providers to adapt to changing market conditions and to ensure that all customers will benefit from falling prices.
The proposed price cap system will ensure a measured approach to tariff regulation in the period up to full liberalisation. The price cap assures unprecedented reductions in overall tariffs. These reductions will apply to all consumers whether domestic or business. The price capping approach is common in other EU member states where it has proved to be a successful bridge to a competitive market place. By contrast the Deputy's amendment seeks to create a pricing free for all in that period. Acceptance of this amendment, combined with the proposed repeals of the tariff control provisions contained in the Postal and Telecommunications Services Act, 1983, would create a price control vacuum which would undoubtedly leave domestic users unprotected in the move to full competition. The price cap system will ensure a guaranteed minimum reduction in tariff levels. This will provide real and tangible benefits to all Telecom's customers. The Deputy's amendment would seek to deprive consumers of these benefits. Accordingly, I am opposed to amendment No. 4.
In relation to amendment No. 6, section 7 (4) provides that the Minister may request information from a telecommunications service provider about services provided by that provider for the purposes of this section. Any successful price cap must be based on a clear understanding of the economics of the service provision. As I explained on Committee Stage, amendment No. 6 proposes to extend to the director the powers which will apply to the Minister under subsection (4), once the transfer of functions to the director has taken place in accordance with the provisions of section 4. The functions of section 4 would be transferred to the director. Accordingly the Minister under this subsection will become the director. On the basis that the amendment is unnecessary I oppose it.
In relation to amendment No. 7, section 7 (6) provides that the director may not make an order modifying the Minister's price cap order until five years after the making of that order unless he or she has been directed to review the order by the Minister, under the provisions of subsection (5). After that five year period the terms of all price cap orders will be solely a matter for the director. Once the initial price cap order or orders are made by the Minister the sole function remaining with the Minister under this section is the power to order a review of that order or orders. Amendment No. 7 transforms what is in effect a five year price cap, reviewable by the director after two years at the discretion of the Minister, into a one year price cap. The price cap is designed to achieve a number of objectives. One of the most important of these is the creation of a stable regulatory environment for the vital initial period. Telecom Éireann, under the price cap regime, will be enabled to position itself to adapt to competition. The price cap is also designed to give incentives to the company by seeking a benchmark for the achievement of internal efficiency on a year by year basis. Additional growth in business and achievement of greater than anticipated efficiencies result in improvements in the bottom line which can, in turn, filter through to lower prices.
Clearly, the setting of the price cap is of crucial importance to the ultimate success of the mechanism. It is important that, while offering a real incentive for the company to make improvements in its operating efficiencies, there is scope for reassessment of both the contents of the basket and the absolute level of the price cap. The Government is determined the price cap should work to the long-term benefit of consumers as well as the company. It has been determined that the cap will be reviewed after two years by the director at the discretion of the Minister.
The proposed amendment essentially undermines the careful structure which has been set out in respect of the first price cap. It signals a year by year approach to Telecom's pricing, devoid of any longer term strategy designed to introduce significant regulatory uncertainty and would thereby hamstring the company in the run up to liberalisation. It flies in the face of both the philosophy and practice of any price cap applied internationally of which I am aware.
A minimal interval between price reviews makes price control very similar to profit control and destroys the critical incentive properties of the mechanism. Price caps in the UK have tended to last for four years. This Bill provides potentially for just half of that term. By providing for a review at the end of just two years the Government is going as far as it can, consistent with the need to provide scope for the company to provide for a flexible pricing mechanism. This amendment is also incompatible with subsection (5) because it would leave the Minister in a position where he or she had to wait two years before telling the director to review the price cap; meanwhile, the director could do as he or she liked after one year.
Accordingly, I oppose the amendment which would have the effect of removing the price cap. That would simply throw Telecom Éireann to the wolves at a time when it is not prepared for the vicious competition which is waiting to seize it by the jugular.
It is well able for it.
That is a matter of opinion.
I think it is in good shape.
We are giving it breathing space with this mechanism and, at the same time, forcing down its prices through the capping mechanism. In real terms we will force down the price over a period of five years by 30 per cent.
Is Deputy Brennan taking his two minutes or is he completing?
I am completing. I fundamentally disagree with the Minister of State about this. A price cap is unnecessary at this stage. Telecom will not be thrown to the wolves. It is arguably Ireland's biggest company and is well able to handle itself competitively. I reject any suggestion it would not be able to handle competition which would benefit the consumer in the long run. I will press my amendment.
In regard to the reply of the Minister of State to the amendments tabled in my name, he should accept that the liberalisation of the telecommunications industry has been well signalled with the coming of the open market, the Maastricht Treaty and the development of the European Union. This company has a State monopoly on telephones and has only opened up the mobile telephone system so far. There is a strong tendency in this legislation on the part of the Department to continue to protect that monopoly and to postpone the——
Acting Chairman
I have to put the question now as the Deputy——
Amendments were taken together, some of which are in my name.
Acting Chairman
Amendments Nos. 6 and 7 were taken together but the Deputy cannot formally move them until this amendment is dealt with.
I am entitled to speak twice and reply to my amendment if I want to insist on my rights.
Acting Chairman
The Deputy should have spoken before Deputy Brennan wrapped up. I asked him if he was wrapping up or taking the two minutes.
Deputy Brennan has his amendment and I have mine.
Acting Chairman
Yes, but Deputy Molloy's amendment cannot be formally moved. It can be discussed as a consequence——
Yes, I am only discussing it.
Acting Chairman
Deputy Brennan said he wishes to press his amendment at this stage.
Yes, but all the amendments were taken together.
Acting Chairman
Amendments Nos. 4, 6 and 7 are being taken together.
I am speaking on my amendment now.
Acting Chairman
The Deputy cannot formally move it until we have dealt with this one. I am sorry but I did not write the rules of the House.
You said we would discuss the three amendments together.
Acting Chairman
We will let the Deputy discuss it.
I only wish to operate within the rules of the House. I carefully studied the changes recently made in respect of Report Stage debates and, as I interpret them, I am complying with them.
Acting Chairman
We discussed the amendments together. The Deputy can only formally move them when we have dealt with amendments Nos. 4 and 5.
There are three Members present in the House, only two of whom have contributed so far.
Acting Chairman
My problem is that Deputy Brennan said he was winding up as opposed to taking his two minutes.
He cannot wind up and cut me out of the debate.
Acting Chairman
No, I am not proposing that. We are losing time. I will allow Deputy Molloy to speak on his amendments and complete what he has to say.
Where do I stand now in regard to the rules as you are interpreting them?
Acting Chairman
We are bending the rules slightly to allow the Deputy to have free expression.
How can that make sense?
Acting Chairman
The Deputy should have made his points before Deputy Brennan said he was pressing his amendment. He has wrapped up.
I rose at the same time as Deputy Brennan did. The Minister of State spoke but it is not a ministerial amendment. He cannot wrap up my amendment
Acting Chairman
I am not saying he wrapped up your amendment — he wrapped up his own amendment which is a direct negative of amendments Nos. 6 and 7. However, I am allowing the Deputy——
He cannot do that until the discussion is completed.
Acting Chairman
The discussion is completed.
It cannot be completed when Members have not contributed.
Acting Chairman
Does the Deputy wish to proceed and speak on amendments Nos. 6 and 7? I am sorry for the hassle but that seems——
It does not seem to make sense; it is a funny interpretation.
Acting Chairman
Many things in this House do not make sense.
It is unfortunate that the attitude of the Minister of State to competition is that it must be postponed for as long as possible. He used extravagant language in seeking to describe the effect competition might have on Telecom — that it would grab it by the throat.
I said "jugular". The savages would gather around.
The jugular is near the throat. Unfortunately, that attitude has saddled the country with high costs and monopolies for far too long. We are trying to work away from that. It is ironic the Labour Party is in Government at this historic time in the development of the European Union which is promoting competition. The Government has to keep in step with it because of the people's decisions in the referenda and our wish to move in the direction in which Europe is pointing.
The Minister of State cannot stop it but he is trying to slow it down. He is trying to reduce the powers of the director and postpone them as far as possible. The aim of my amendments is to deal with that. We do not have any time to discuss it further but the replies of the Minister of State are not very satisfactory. They are indicative of his attitude.
Acting Chairman
I know it is not within the proper procedure but I will allow the Minister of State to reply to Deputy Molloy.
The arguments made by the Deputy are the same as those he made on Committee Stage. My response to them is the same as my response on Committee Stage.
Question: "That the words proposed to be deleted stand" put and declared carried.
Amendment declared lost.
Amendment No. 5 not moved.
Acting Chairman
Amendment No. 6 has already been discussed with amendment No. 4. It cannot be moved as amendment No. 4 has been lost.
Why can it not be moved?
Acting Chairman
Because it is a negative to amendment No. 4. The three amendments are related. The question was that the words stand and it covers amendments Nos. 6 and 7.
How could amendment No. 4 cover amendments Nos. 6 and 7?
Acting Chairman
They were all taken together. Amendments Nos. 6 and 7 are alternatives to amendment No. 4.
They were taken together for discussion purposes.
Acting Chairman
Deputy Brennan proposed that the words should be deleted but it was agreed that they should stand.
He proposed that the section should be deleted.
Acting Chairman
The words stand because the amendment was lost.
Amendments Nos. 6 and 7 not moved.
Acting Chairman
We now come to amendment No. 8. Amendments Nos. 9, 10 and 11 are related and amendment No. 12 is an alternative to amendment No. 11. Is it agreed that we take amendments Nos. 8 to 12, inclusive, together? Agreed.
I move amendment No. 8:
In page 8, line 17, to delete "buy,".
On a point of order, if the Deputy does not speak to the amendments now he will only have a few minutes to reply.
Acting Chairman
It is a matter for the Deputy to decide whether he will speak to his amendment.
Why is it necessary to include the word "buy" in section 8 which deals with the issue of shares? Section 8 (1) (b) states: "subject to subsection (2), the Minister or the Minister for Finance may buy, sell or otherwise transfer shares in the company".
I understand why the Minister for Finance is seeking power to sell or transfer shares in the company as the main thrust of the Bill is to facilitate the strategic alliance. However, why would the Minister seek power to buy shares in the company? This is not the intent of the Bill. Is it proposed to allow the Minister to buy shares at some stage in the future so that we can revert to having a monopoly?
These amendments deal with the issues which have given rise to disagreement between the Government and Opposition. Amendment No. 9 seeks to ensure that the Minister does not sell 20 per cent of Telecom Éireann for anything less than £300 million. The deal agreed by the Government is a shabby one. I am shocked that a Government which includes left wing parties would agree to allow the Minister to preside over the sale of 20 per cent of our largest and most successful State company in the way proposed.
I protest at the price agreed. Deutsche Telecom was partly privatised recently and the price paid was ten or 11 times the profit margin, while MCI and British Telecom have referred in their merger discussions to a price which is 11, 12 or 13 times the profit margin. The Minister is selling Telecom Éireann for an amount which is three and a half to four times the profit level. This is one-third of the price being paid for telecommunications companies in other parts of the world.
It is a shabby deal because it seems that no Irish need apply for a share in this company which is being sold to two overseas companies, small regional players, which were the only companies left after the scramble. A person who wants to buy shares in Telecom Éireann in the future will have to buy them through the Dutch Stock Exchange. This is a shabby and disgraceful deal and I am aghast that a left wing dominated Government is a party to it.
If this deal had been agreed by Fianna Fáil in Government——
Nothing happened when Fianna Fáil was in Government.
——the Minister of State and his colleagues, particularly Democratic Left Deputies, would be apoplectic. This company is being sold for one-third of its value in a one horse race to overseas regional companies and no Irish company is being given a look in. My party leader asked today to see a copy of a contract which we believe shows this is one of the most shabby and scandalous secret deals ever agreed. I call again for the publication of the secret contract document signed between the Government and these two overseas companies.
The document is confidential.
If this document was made available——
It would seriously damage Telecom Éireann.
——it would prove that my suggestions and allegations about this scandalous deal are correct, that is, Telecom is being sold in a secret deal which has the support of the left wing members of Government. Anyone who purports to wear the left wing label in this House should not stand over this financial and political scandal.
Twenty per cent of the shares in Telecom are being sold for £183 million.
The figure is £500 million.
That is not accurate.
The figure is £500 million. The Deputy is incorrect again.
Acting Chairman
The Minister will have an opportunity to respond.
According to the Minister's announcement, 20 per cent of Telecom is being sold for £183 million. The Minister of State's silence is interesting.
I will reply later.
The Minister said all this money would go back into the company. This means the people buying the company will get back 20 per cent of £183 million and 20 per cent of the first year's profits. If the Government sells Cablelink — I suspect it is working on this — they will get back their share of the profits in that company. In two or three years' time the sum of £183 million will be less than £100 million. This means the Government will have flogged off for less than £100 million one-fifth of the shares in our largest company. This Bill should be withdrawn. If the left wing members of the Government had any credibility left they would not stand over this financial scandal.
I am glad to defend the strategic alliance transaction. This deal defends the strategic and financial interests of the State, the company and the new strategic partner. Above all, the deal is good for consumers and business. In partnership with KPN/Telia, Telecom Éireann can accelerate its transformation into a modern telecommunications company which is totally focused on the needs of its customers. The deal has received a broad welcome at home and abroad from Telecom employees, business interests and financial experts. This deal represents excellent value, and the facts speak for themselves.
The 85 separate strategic initiatives agreed between Telecom Éireann and KPN/Telia provide a comprehensive strategic support programme which will consist of technical support, expert and managerial assistance, software and systems improvements across all the business categories. Nobody can question the capability of KPN/Telia to deliver on these initiatives. They have proven track records in their home markets and are backed by their global unisource partnership. The figures given by the Deputy are absolute rubbish. At the outset our priority was to find a partner with the right strategic fit. This has been achieved in the context of a financial deal which also represents excellent value for the State. In addition to the initial £183 million, which will be paid for the 20 per cent stake, the State will receive £200 million for the exercise of an option on a further 15 per cent of the shares.
Pie in the sky.
Finally, through a profit sharing formula, the State will capture a 60 per cent stake of the gain of the strategic partner's investment over a certain threshold and this will apply to the entire stake purchased by the partner, including the initial 20 per cent. It is expected that, based on the likely business performance of the company, this deal will produce overall proceeds to the State in excess of £500 million.
Rubbish.
The Deputy's figures are rubbish. He has presented approximately five different sets of them to the House.
Publish the contract.
The Deputy has consistently supported the historical conditional offer which valued the company at less than half of his own figure. This deal will generate substantially more for the State in cash terms over a three year period than the figure suggested by the Deputy.
That is hypothetical.
In its desperation to cast the deal in bad light the Opposition has been prepared to resort to virtually any comparative measures which offer comfort to its claim that the Government has received bad value for the sale of a stake in Telecom Éireann and it has no regard for the damage such claims make to the company, the workers or the national interest.
There was only one bidder.
These have included references to highly conditional historical offers, deals in respect of companies at a different stage of development than Telecom Éireann, deals in respect of companies in differing environments and with divergent operating features and to companies of a different nature, including, for example, public flotations.
The record of this Administration in respect of this deal stands in contrast to the abject failure and the blank copybook presented by the Opposition parties after their period in Government. Where is the legislation on regulatory reform promised by the Opposition?
The Government privatised Telecom Éireann.
The Deputy wants to sell the company without even a regulator for the interim period. He wants to throw the company to the wolves immediately.
Why is the Minister of State hiding the contract?
Deputy Séamus Brennan makes claims for other companies as if they were equivalent to Telecom Éireann. MCI is a trunk telephone company. It has no local loop. It is a cherry picking company with cream on top of the cherries. The Deputy compares the multiplier for that kind of company with Telecom Éireann, which provides a basket of services. Such comparisons are unfair and unjust. They do not stand up. He should forget about the figure of £183 million and realise that the State, the customers and the public are getting £500 million plus for the deal.
The Government had one bidder.
According to the Minister of State, approximately £1.5 billion has been invested in Telecom Éireann over the past seven or eight years.
I did not provide any such figure.
The figure was provided on Second Stage. Any reasonable person looking at the size of the company, which has been a monopoly since its foundation, owns property throughout the country and has received huge investment from taxpayers, must conclude that it is and should be valued at well in excess of £2.5 billion. One third of the company is now being sold off. Some 20 per cent is being sold for £183 million and the company with whom the deal has been made has the option to purchase a further 15 per cent for a figure which the Minister of State has built up to £500 million. He is happy to sell a third of the company for £500 million.
The secrecy attached to this agreement is of serious concern. We strongly object to the withholding of the details of the contract from the House.
On a point of order, will the Minister of State explain why he presided over the diminution of the role of worker directors?
That is rubbish.
As it is now 1.15 p.m. I am required to put the following question in accordance with an order of the Dáil of this day: "That the amendments set down by the Minister for Transport, Energy and Communications and not disposed are hereby made to the Bill; that Fourth Stage is hereby complete; and that the Bill is hereby passed."
Question put.
The Dáil divided: Tá, 66; Níl, 55.
Tá
- Ahearn, Theresa.
- Allen, Bernard.
- Bhamjee, Moosajee.
- Bradford, Paul.
- Bhreathnach, Niamh.
- Burton, Joan.
- Byrne, Eric.
- Carey, Donal.
- Connaughton, Paul.
- Connor, John.
- Costello, Joe.
- Crawford, Seymour.
- Crowley, Frank.
- Currie, Austin.
- Deenihan, Jimmy.
- Doyle, Avril.
- Dukes, Alan M.
- Durkan, Bernard J.
- Finucane, Michael.
- Fitzgerald, Brian.
- Fitzgerald, Eithne.
- Fitzgerald, Frances.
- Flaherty, Mary.
- Flanagan, Charles.
- Gallagher, Pat (Laoighis-Offaly).
- Harte, Paddy.
- Higgins, Jim.
- Higgins, Michael D.
- Howlin, Brendan.
- Kavanagh, Liam.
- Kemmy, Jim.
- Kenny, Seán.
- Lowry, Michael.
- Bree, Declan.
- Broughan, Tommy.
- Browne, John (Carlow-Kilkenny).
- Bruton, John.
- Bruton, Richard.
- Lynch, Kathleen.
- McCormack, Pádraic.
- McDowell, Derek.
- McGahon, Brendan.
- McGinley, Dinny.
- McGrath, Paul.
- McManus, Liz.
- Mitchell, Gay.
- Mitchell, Jim.
- Moynihan-Cronin, Breeda.
- Mulvihill, John.
- Nealon, Ted.
- Noonan, Michael (Limerick East).
- O'Sullivan, Toddy.
- Pattison, Séamus.
- Penrose, William.
- Quinn, Ruairí.
- Rabbitte, Pat.
- Ring, Michael.
- Ryan, John.
- Ryan, Seán.
- Spring, Dick.
- Stagg, Emmet.
- Taylor, Mervyn.
- Timmins, Godfrey.
- Upton, Pat.
- Walsh, Eamon.
- Yates, Ivan.
Níl
- Ahern, Bertie.
- Ahern, Dermot.
- Ahern, Noel.
- Andrews, David.
- Aylward, Liam.
- Brennan, Matt.
- Brennan, Séamus.
- Briscoe, Ben.
- Browne, John (Wexford).
- Burke, Raphael P.
- Callely, Ivor.
- Connolly, Ger.
- Coughlan, Mary.
- Cowen, Brian.
- Cullen, Martin.
- Davern, Noel.
- Ellis, John.
- Fitzgerald, Liam.
- Flood, Chris.
- Foley, Denis.
- Foxe, Tom.
- Geoghegan-Quinn, Máire.
- Gregory, Tony.
- Harney, Mary.
- Haughey, Seán.
- Hilliard, Colm M.
- Jacob, Joe.
- Keaveney, Cecilia.
- Kenneally, Brendan.
- Keogh, Helen.
- Killeen, Tony.
- Kirk, Séamus.
- Kitt, Michael P.
- Kitt, Tom.
- Lawlor, Liam.
- Lenihan, Brian.
- Martin, Micheál.
- McCreevy, Charlie.
- McDaid, James.
- Moffatt, Tom.
- Molloy, Robert.
- Morley, P.J.
- O'Dea, Willie.
- O'Hanlon, Rory.
- O'Keeffe, Batt.
- O'Leary, John.
- O'Rourke, Mary.
- Quill, Máirín.
- Ryan, Eoin.
- Smith, Brendan.
- Treacy, Noel.
- Wallace, Dan.
- Wallace, Mary.
- Walsh, Joe.
- Woods, Michael.
Tellers: Tá, Deputies J. Higgins and B. Fitzgerald; Níl, Deputies D. Ahern and Callely.
Question declared carried.
Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.