Electronic Commerce Bill, 2000 [ Seanad ] : Second Stage (Resumed).

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

Acting Chairman:

Deputy Naughten was in possession. The Deputy has 15 minutes remaining.

When we last debated the Bill I stated it is crucially important to the availability of e-commerce and competition that we achieve local loop unbundling. I hope the Minister will signify in her reply when she hopes to ensure this takes place. Such unbundling is fundamentally important to the enactment of this legislation and the development of e-commerce.

The Minister intends to make Athlone an e-commerce hub and it is fundamentally important that a town such as Athlone receives such designation. I support the Minister in this objective as Athlone would be an ideal capital for e-commerce. However, we should also consider developing Athlone as a hub for other towns in the area, including Mullingar, Tullamore, Roscommon and Longford. These towns are serviced by fibre optic cables and this would be a great benefit to the midlands region which has been disadvantaged with regard to industry.

E-commerce offers significant opportunities for institutes of technology, including Athlone Institute of Technology, to base courses in other towns through the use of information technology. We should consider such a development which would bring courses closer to people as the upgrading of skills, including IT skills, is fundamentally important to the enactment of this legislation.

E-commerce has developed dramatically in the US in the past number of years. For example, one can place an order for groceries from one's workplace and they will be delivered at a specified time. One pays by credit card, there is no hassle with cash and the groceries are delivered without the need for one to go to the supermarket. I am sure such a system would suit the Minister.

What about the wine shop? One must be able to order wine.

I am sure the Minister would manage that also. E-commerce has developed dramatically in the US but is only beginning to take off in Ireland.

One of the Minister's other responsibilities is for the postal service, An Post and the retention or rural post offices. E-commerce could play a significant role in supporting the postal service and post offices by transforming them into Internet access points and local e-commerce hubs. There is no reason rural post offices should not have Internet access points such as can be seen in pubs and shopping centres. However, a fundamental problem is that many rural post offices are not even electronic. This problem requires substantial investment if we are talking about keeping rural post offices open and ensuring every person has access to the Internet.

We should also examine the provision of banking services through post offices. A major announcement in the UK today outlines that post offices will link up with banks to provide services in communities. Banks have closed in many of these locations, as is the case in Ireland. Changes in the new Social Welfare Act encourage elderly people to keep money in banks as their social welfare entitlements will not be adversely affected. There is a significant opportunity for post offices to provide services in local communities rather than people having to travel to banks in large towns. However, post offices must be equipped with the computer facilities, they must be electronic, which many are not, and they must provide Internet access.

Post offices could also be used as hubs from which goods purchased on the Internet could be collected. We should reverse the decline in post offices and implement a vision of how to develop post offices into the future. They have great potential and a large network, and I hope the Minister will seriously examine this issue and provide the necessary investment.

The objective of this legislation is to transpose the EU Electronic Signatures Directive, 1999, into Irish law. However, what happens when we deal with locations outside the EU? There is concern about this issue. The web is world-wide but this legislation applies only within the EU. What happens to companies trading outside the EU who face potential risks? The situation is open for cowboy operators as the agreements in place are not sufficient to ensure the necessary protection is provided.

Security is the largest concern that SMEs have about e-commerce. A recent survey indicated that 34% of them see security and confidentiality as major problems with the Internet and e-commerce. We must overcome these fears if we are to develop a proper e-commerce hub. Such a development offers great opportunities for Ireland to attract e-commerce companies and develop SMEs into international companies selling Irish products worldwide via the Internet.

The greatest challenge is to get SMEs to run with this issue. There are concerns and we are failing to ensure SMEs take up this opportunity. The Government was criticised in a recent survey for not providing information to SMEs. This will be an uphill struggle. Technology is mainly used to source information. We must change that to ensure it is used for on-line purchasing and on-line banking – which is beginning to take off here – but mainly for on-line payments to suppliers and customers.

There is huge potential for SMEs. However, the recent survey conducted by the Information Society Commission highlights the fears and prejudices and the lack of investment by SMEs in staff training. This is a huge problem we must overcome. Some 46% of SMEs provide no IT training for their workers. In five years, certain jobs will not exist because the economy is changing so rapidly and people must continually upskill. I know the Minister of State, Deputy O'Dea, is hoping to tackle some of these problems in the White Paper but the Government can only do so much in providing that training. Industry must grasp the nettle, which it is not prepared to do. This is a hurdle we must overcome if we want to develop Ireland as an e-commerce hub and ensure it is the main player in the European Union.

I welcome this legislation which provided an opportunity to raise some points with which I know the Minister agrees. I hope she will consider the points I raised on competition, that she ensures resources are put into post offices so that they can remain open to provide a service to the community and that SMEs take on e-commerce wholeheartedly so that they are the leaders of new technology, not only in Europe but the world.

I am delighted to have the opportunity to speak on this Bill. This is important legislation which provides the foundation for all the legislation necessary to facilitate the growth of electronic commerce and electronic transactions in Ireland. The Bill deals in particular with the legal framework for the development of electronic commerce. In this context, it clarifies that "writing" shall be construed as including electronic writing, for the purposes of the interpretation of other laws.

Many laws refer to writing "under hand" and under section 2(2), electronic writing shall also be deemed to be writing "under hand". This will lead us in the direction of a penless society where all communications will be electronic. When one thinks of the pen, one normally thinks of schooling. We have an opportunity in this information age to eliminate the digital divide. For too long, people such as those in Dublin South-Central, particularly the south-west inner city where third level participation in education is minimal, have been denied equal opportunity.

I have a vision of every home, office and business in the country having fibre-optic wireless connectivity. I have a vision of every child, from first class in primary school through to university, being given a laptop or schoolbag computer with wireless local area network connectivity. A local area network of schools, libraries, local health boards, local authorities and local community and family affairs offices would be provided. I see every child doing his or her homework on computer. I see every parent being able to access local services by using their children's computer. If the child is working at home, in school or at the local library, their computer will always be connected to the local area network through the wireless connectivity.

How can this vision be financed and operated? A national backbone of cables is being installed by Iarnród Éireann, the ESB and the National Roads Authority, with the fibre being leased to internet service providers and telecommunications companies at an economic price. A separate utility company could be set up, funded by the telecommunications companies and the internet service providers to wire the last mile, so to speak, with assistance from the Government for remote rural connections and tax incentives for the less remote areas. The local loop would have to be completely unbundled to allow for full competition. In this regard, I am delighted the Minister for Public Enterprise, Deputy O'Rourke, yesterday announced her plans to introduce legislation to provide for the early unbundling of the local loop. This effectively means liberalising the final length of copper wire which runs into local telephone exchanges. It is also necessary, when considering unbundling of the local loop, to ensure the fibres that cable companies are putting into homes are unbundled and can be accessed by other ISPs and telephone companies.

Eircom has stated that their telephone exchanges are crowded and there is no room for others to come on board. When the legislation promised by the Minister is introduced, any land adjacent to telephone exchanges will become valuable because it will be necessary for the location of equipment provided by companies other than Eircom. That is a pointer for anyone with land adjacent to exchanges.

What would be the result if a computer was provided for every child, home, office and school? Every person in the country would have full, unfettered access to the best broadband services available. Ireland would be positioned at the forefront of the Information Age, ready to assume global leadership in electronic commerce and the digital industries. It would significantly increase the number of jobs which would inevitably be created in the "infotainment" sector, driven by the massive demand for good quality content. The recent AOL and Time Warner merger is evidence of the importance of this sector.

The cost to the Government, based on recent Swedish costings, would be approximately £2.1 billion, which is about £1.8 billion for the State's share of the fibre cost and £300 million for computers for our one million schoolchildren and university students. The price of computers will come down dramatically when looking for one million, one for every child in the country. There would be further local costs to set up the local area networks, which could be financed at local level. The total package would cost less than the moneys raised on the flotation of Eircom last year.

On a more parochial level, the hard-pressed investors in Eircom would see a significant increase in the value of their investment as it would be the largest player in a much expanded market. There is an opportunity to successfully fight the battle against deprivation, exclusion and the digital divide while at the same time leaping forward into the information age.

Section 9 of the Bill provides for the fundamental principle that information shall not be denied legal effect, validity or enforceability solely on the grounds that it is in electronic form. This will be a jolt to the legal system. The archaic ways in which the legal system operates will be totally revamped and the operation will be like reinventing the wheel. There is an impression that judges will be appalled at the radical transformation the legal system will have to go through. However, barristers widely use computers in a most effective manner. The information methods available at the tribunals of inquiry in Dublin Castle are at the leading edge of technology. The Committee of Public Accounts' DIRT inquiry would not have been as effective without the tremendous capabilities of information technology and its mastery by the staff of the committee secretariat.

Section 10 of the Bill provides that documentation such as wills, trusts and enduring powers of attorney are excluded. One wonders why this is so. Allowing exclusions like this appears to defeat the whole purpose of the Bill.

I note that it is the intention to extend the electronic commerce enabling provision of this legislation to all excluded laws as soon as this is feasible. This is very desirable. I would like to see a target date put on the implementation of the new provisions that would be necessary in this regard.

Section 12 states that the information must be accessible in electronic form and that the software and hardware that might be necessary to render such information readable should be retained. I hope one would be allowed to transfer the information into an updated version compatible with new advanced hardware and software. In this regard, there is a need to ensure that software upgrades protect the integrity of the electronic information.

Public bodies can set down requirements when receiving information, and these can be based in law. This is different to private bodies who may set out terms and conditions, but these would not be backed up by law. This emphasises the responsibility of public bodies and Government generally to lead in the development of e-commerce, and not only to lead but to coax and convert those private bodies with which they do business to transact that business electronically. Deputy Naughten mentioned a few moments ago the great challenge of getting the SMEs up to speed as quickly as possible in this technology. This is not just for the sake of doing business electronically but because it allows for freer competition, transparency, faster transaction times, much greater efficiency and, in the final analysis, will allow for more prudent spending of taxpayers' money.

Government should, in the near future, include e-procurement. Broadly similar e-procurement should be installed in Government Departments, local authorities, health boards, vocational education committees and semi-State bodies. A State virtual private network should allow access by the different agencies to supplies, products and prices so that the best deal can be achieved across the board by all of the different agencies. This system would be suited only to suppliers who could interface electronically with the agencies. Notices could be put in the newspapers and sent to all suppliers that tendered for goods in the past that from a certain date, say, 1 October 2000, all procurement for future supplies would be done openly and transparently by an e-procurement system. That would certainly get the SMEs up to speed quickly. This would allow for different firms to quote different prices, offering different levels of service, be it JIT –‘just-in-time' facilities – special delivery times or any other special facilities.

As the number of companies who do business with the Government is huge, the number of companies that would gear up and offer an electronic platform would also be huge. The competitors of these companies in the non-State area would also have to get up to speed and install e-commerce solutions if they wished to compete on an equal basis.

One of the benefits of an e-procurement system in Government is that it would allow a reduction in the cost of finding suppliers of particular items, improved information measurement and management, improved communication between suppliers and buyers, eliciting information about supply market participants and trends, providing strategic information to those involved in purchasing within the agencies, reducing transaction processing costs, especially for low value easy-to-access items, managing or reducing holding costs of stocks, improving the controls and compliance with procurement policies.

More specifically, electronic commerce can be used to automate many procurement processes by offering flexibility and utilising any back-end systems to automate purchasing of commodities through the use of agency-wide electronic contracts, allowing self-service buying. Internal usersvia the use of electronic catalogues could requisition direct from authorised suppliers. Right across all of the agencies and all the Government Departments there will be no difficulty because in respect of authorised suppliers who supply pens, for example, all those pens will be bought at the price in the contract, the same price, by all those Departments.

It would allow ongoing data gathering and performance monitoring, providing real-time activity reports on commodity expenditure by cost centres within agencies. It will allow information sharing between agencies by e-mail. For example, information on supplier–held stock levels, price changes, new products and lead times. It would allow the generation of comparative statistics and figures which would help the Committee of Public Accounts for instance, in its work in seeing whether taxpayers' money is being spent wisely.

Section 13 provides that an electronic signature can be used to meet the requirement of a written signature. This is the core of the legislation. Along with the use of advanced electronic signatures and qualified certification for witnessing and sealing documents, it is innovative and most welcome.

Section 18 provides that a contract may be concluded using electronic communications, and lays down the principle that a contract may not be denied legal effect, validity or enforceability solely on the grounds that it is in electronic form. This brings Ireland to the forefront of electronic commerce, ahead of the UK and the US.

The use of electronic contracts raises the question of privacy of communication. Alan Greenspan, who is the Chairman of the Federal Reserve Board in the States, at the Conference on Privacy in the Information Age stated: "It is clear, however, that security and privacy will be very important if confidence is to be established in these new systems." Consumers should have the right to choose whether a firm can share electronic signature information with third parties and affiliated firms. Data collected by way of electronic signature should not be allowed to be used for any purpose other than the purpose intended by the individual when signing. Data hoarding and data mining or using these signatures as personal identification numbers to trace or to track across cyberspace is a terrifying vista. This is where one big computer will hold all of the information that has ever been signed off by anyone on an electronic signature. That must not be allowed.

The Constitution does not explicitly protect the right to privacy. The Supreme Court has ruled that privacy is protected under Article 40.3.1 which states: "The State guarantees in its laws to respect, and, as far as practicable, by its laws to defend and vindicate the personal rights of the citizen." The Supreme Court in 1987 found that the right to privacy is one of the fundamental personal rights of the citizen and flows from the Christian and democratic system, and that the nature of the right to privacy is such that it must ensure the freedom and dignity of the individual in a democratic society. This cannot be ensured if his communications, whether written or telephonic are deliberately and unjustifiably interfered with. This right to privacy should pervade all the workings of the information age.

Along with privacy, there is the question of interception of Irish data communication by foreign spy agencies. Irish telecom companies should be mandated to ensure that all precautions are taken and that the necessary equipment is put in place to avoid unlawful or third party interception of communications. In theIrish Independent in July 1999 Duncan Campbell and Paul Lashburn had an article on how Britain eavesdropped on Dublin. The Ministry of Defence had a mysterious 150 foot high tower, an electronic test facility situated in a BNFL site at Cappenhurst in Cheshire. Locals did not know what dark secret this tower held. It happens to be in a direct line of sight between the telecommunications mast on Three Rock Mountain and the BT receiving site in the UK. It is ideally situated to intercept all telephonic communications between Ireland and the UK. It was alleged in that article that there was an interconnection of the BT network with the new £25 million sterling eavesdropping facility. It is alleged also that there is a hardware connection into GCHQ in Cheltenham for interception purposes and that there is a determined effort being made to MI5 to stop everyone from using high-class improved encryption levels. Ireland is leading the way, as was seen at a recent conference in the Berkeley Court Hotel on mobile commerce.

Debate adjourned.