Dáil Éireann debate -
Thursday, 12 Apr 2001

Vol. 534 No. 5

Adjournment Debate. - Proposed Legislation.

Mr. Naughten:

In July 2000, the Office of the Director of Telecommunications Regulation published the regulatory framework for access to the mobile market. The report stated that mobile operators such as Eircell, which have been designated as having significant market power on the national network for interconnection, are obliged to provide interconnection at cost orientated rates. On this basis, Imagine, an Irish company, entered discussions with Eircell. However, Imagine had difficulty in dealing with Eircell and asked the ODTR to intervene. The management by ODTR of the dispute between Eircell and Imagine raises serious questions. The ODTR has been slow to furnish information to Imagine. It has remained indecisive in relation to its power and how it intends to enforce its policy as stated in July 2000.

Indecision by the regulator is highlighted by the fact that Imagine, the only competition to the two main players in the marketplace, has been waiting up to nine months for a decision from the Director of Telecommunications and she has not to date indicated when such a decision will be made. Imagine is now facing collapse with the loss of more than 250 jobs and the withdrawal of investment of £20 million, creating an additional 100 jobs, of which £5 million would be invested in the midland region. What is more worrying is the fact that it is taking the sole competitor out of the market which is not just damaging to competition and the consumer, which is facing a 25% increase in mobile phone charges, but is damaging the country's reputation and competitive advantage within the EU.

Ireland currently has one of the highest mobile phone charges in the EU and remains the only country with a sole competitor to the main players, Eircell and Esat Digifone. The director has failed to enforce her own policy for opening up access within the mobile market and has further compounded this by failing to decide on the dispute resolution request within six months, contrary to the EU directives. It is clear from the EU interconnection directive that the ODTR is legally obliged to ensure agreement between both parties. However, she claims that the current legislation is a grey area, contrary to the Minister's claims.

It is clear from that directive that Article 3 of the interconnectivity directive obliges Ireland to have adopted into law the removal of restrictions to ensure negotiations take place in relation to interconnectivity agreements and authorises the Government to ensure public telecommunications networks and services are opened up to competition. Article 4 of the same directive provides Imagine with the legal right to negotiate and directs the ODTR to ensure such agreements are not hindered by Eircell. It is clearly stated in Article 4 that a company such as Eircell must meet all reasonable requests for access to the network. It is blatantly obvious this is not happening at present.

Article 3.1 clearly states that any negotiations or discussions must be in line with the competition rules of the Amsterdam Treaty, which is not happening at present. Both Eircell and Esat have market dominance within the marketplace. There is little competition at present. Eircell must provide access and not contravene EU competition law. As a consequence, there is no restriction to the obligation on the ODTR to ensure and facilitate the negotiations and ensure they are fulfilled and delivered on.

I would like to make a point in relation to significant market player designation. There has been no designation since the 1998 statistics. Esat should also come under that category. The ODTR has not reviewed that situation and that should be done immediately. Why has it not been done to date? It is done annually in other EU countries. There are serious question marks over the handling of this by the Office of the Director of Telecommunications Regulation. She claims she does not have the legislative power to do that at present. I ask that that legislation be expedited immediately so that the ODTR and the office of the Minister do not continue to break articles of the interconnectivity directive.

Mr. Jacob:

I thank Deputy Naughten for raising this important issue. An efficient and effective communications sector is a prerequisite for Ireland to derive maximum advantage from the benefits of the information society and e-commerce in particular in the shortest possible time. The Communications (Regulation) Bill will propose a reform of the regulatory framework for the telecommunications sector that will provide a favourable environment for further investment and development and improved service. The Minister for Public Enterprise, as Minister responsible for telecommunications matters, is intent on ensuring the speedy passage of the Communications (Regulation) Bill through the various Stages necessary for its enactment.

The existing regulatory framework for the telecommunications sector is substantially based on European directives. In July 2000, the European Commission published proposals for the reform of the regulatory framework for the sector which were designed to accelerate the benefits of competition and enable Europe to reap the benefits of the information society. The enactment of the Bill will enable Ireland to effectively manage the transition from the current regulatory framework to the proposed new one and will help to put us among the early adopters of the new European framework.

The main provisions of the Bill will be as follows: to replace the Director of Telecommunications Regulation with a commission for communications regulation with appropriate arrangements for the transfer of staff and functions to the director to the commission, to broaden the scope of the powers of the commission in the exercise of its functions in light of the emerging EU regulatory framework and to improve the powers of enforcement of the commission's decisions, to reform the legislative framework governing the opening of public roads by telecommunications operators, to implement other policy proposals set out in the governance and accountability in the regulatory process paper, including the enhancement of the transparency and accountability of the new commission to the Oireachtas and the public and provision for an appropriate relationship between the commission and the Competition Authority in areas of common concern and to include the recently adopted regulation of the European Parliament and Council mandating local loop unbundling from January 2001 within the enforcement powers of the commission.

The Bill, in accordance with the new European regulatory framework for the sector, will enable the proposed commission for communications regulation to impose obligations on operators with significant market power in order to facilitate competition in the sector, including the mobile telephony market. Among the obligations that may be imposed, where appropriate, will be the requirement on such operators to make available network facilities to other operators to allow the latter to provide services to consumers.

A draft general scheme of the Bill was published as a consultation paper last autumn following Government approval. More than 20 submissions were received from telecommunications operators, representative bodies, the Director of Telecommunications Regulation and a small number of individuals. The draft general scheme was revised in the light of the comments received through the public consultation.

Following Government approval in March 2001, the general scheme was sent to the office of the Parliamentary Counsel for drafting as the Communications (Regulation) Bill. It is hoped that the proposed Bill will be published in time for the autumn session this year. The Minister intends to publish the general scheme shortly for the information of those who contributed to the public consultation process on the proposals last autumn and for the information of the public in general.