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Dáil Éireann debate -
Thursday, 8 Oct 2009

Vol. 691 No. 2

Communications Regulation (Premium Rate Services) Bill 2009: Second Stage.

I move: "That the Bill be now read a Second Time."

I was about to address the Acting Chairman, Deputy Charlie O'Connor, as "Ceann Comhairle".

Perhaps he will be Ceann Comhairle next week.

It may be wishful thinking on the part of the Minister of State to address his constituency colleague as Ceann Comhairle. I do not know if he will be that lucky.

I would love it if he was appointed Ceann Comhairle next week because I would have an easy ride in the next general election.

I remind Deputies that it is not appropriate to draw the Chair into debate.

The Chair might also like it.

It would make my work as a Minister of State a lot easier.

I am pleased to present the Communications Regulation (Premium Rate Services) Bill 2009 for the consideration of the House. This Bill is an important part of the Government's legislative programme and when enacted will transfer the regulation of premium rate services from the current regulator, RegTel, to the Commission for Communications Regulation, ComReg, and provide for more effective regulation of the sector in the interest of consumer protection, which is its primary purpose.

The Bill is the result of a review of the regulation of premium rate services in Ireland involving consultation between officials of my Department, RegTel, ComReg, the Attorney General's office, key market players and other stakeholders in the industry. The Minister for Communications, Energy and Natural Resources, Deputy Eamon Ryan, initiated the review following a significant increase in complaints from the public concerning premium rate services, particularly subscription services, and concerns raised by the Attorney General about the current statutory basis for the regulation of this sector. Following the review, the Minister decided that the regulatory function should be transferred to ComReg by way of an extension of its functions under the Communications Regulation Acts. This will ensure that an effective regulatory regime is established in accordance with Government policy on agency rationalisation.

Before going into the main provisions of the Bill, I would like to set out for Deputies the background to the premium rate sector in Ireland and the rationale for the Bill. Premium rate services are content services provided primarily over fixed line and mobile telecommunications networks that are charged to a consumer's telephone account by his or her network operator at a price which exceeds the cost of communications carriage alone, that is, the cost of a normal telephone call. These services, which are accessed by means of a specific telephone number prefix, include information and entertainment services such as directory inquiries, weather forecasts, traffic news, sports results, chat lines and horoscopes, and services such as competitions, mobile ring tones and logo downloads.

The premium rate services market is currently regulated by RegTel, an independent and limited private company, by means of a code of practice produced by RegTel to which all service providers are required to adhere. RegTel is funded by a levy on the service providers and network operators that carry premium rate services. This is essentially an industry self-regulation model. There are approximately 370 service providers offering premium rate services over the networks of 12 operators. Between 2001 and 2007 annual revenue grew from €31 million to €95 million, an increase of over 200%. Given the current difficult economic climate, revenue for the current year is likely to decline to about €80 million. Clearly, this is a dynamic market which provides significant returns to service providers and network operators.

While the vast majority of service providers operate within RegTel's code of practice, a small number of non-compliant providers bring the sector into disrepute. The poor experiences of consumers at the hands of these non-compliant service providers in recent years have undermined confidence in the regulation of the sector and, according to the network operators, is impacting on the take-up of services in the Irish market. It is widely believed that if the sector was effectively regulated, consumer confidence and demand for services offered would increase.

Premium rate services are distinctly different in many respects from standard telephone services. The main features that set them apart and warrant more regulatory intervention in order to protect consumers are issues relating to the supply chain, content, price and transparency. As the premium rate service consumer is in contract only with his or her telephone network operator, he or she has to pay that network operator for the premium rate service, which usually originates with a premium rate service provider and may even be delivered through intermediaries. The length of the supply chain between the originating premium rate service provider and the consumer is a factor in determining the need for regulation.

Many premium rate services such as weather forecasts, traffic reports or sports results, although typically more expensive than ordinary telephone communications, require only light regulation. Other forms of content offered over telephone networks, such as adult chat lines, require tighter regulation because of the risk that minors may access them. The content of a service must not be such that it facilitates or encourages anything that is unlawful. Prices for certain types of premium rate services can result in substantial charges on a telephone bill or pre-pay card if the consumer is not vigilant or if the phone is used by a child or other user who is unaware of the potential to generate telephone bills that can cause surprise and distress.

A further reason for regulation, and an area that gives rise to the vast majority of complaints both in Ireland and elsewhere, is the lack of transparency in relation to subscription services offered by a small but significant group of providers. In many cases, consumers who thought they were engaging in a one-off transaction have found that they inadvertently agreed to subscribe to a premium rate service whereby they receive subsequent content over their phone line or mobile and are charged for this service on an ongoing basis. This problem has been most prevalent where consumers enter competitions without realising that they have signed up to an ongoing subscription service which incurs substantial costs.

The new regulatory framework proposed in this Bill aims to address any issues that may arise in regard to the provision of premium rate services, particularly in the areas of supply chain, content, pricing and transparency. The Bill proposes a licensing regime backed up by effective enforcement powers. This will ensure that the consumers of such services are protected from the unscrupulous practices of a small number of providers who until now have been able to exploit weaknesses in the current regulatory regime. It replaces the current self-regulatory regime based on contractual arrangements between RegTel and service providers with a more robust licensing regime backed up with effective enforcement measures.

Enforcement is a key element of effective regulation and appropriate remedies and sanctions are vital to secure regulatory compliance. It is in this context that the enforcement proposals in this Bill have been drafted. Involving the industry in enforcing proper standards is an important element of effective regulation. I acknowledge that the majority of companies operating in the sector are reputable and through various initiatives have played an important part in maintaining high standards.

In order to maintain this level of engagement with the industry in the regulation of the sector, the Bill provides that a code of practice drawn up by ComReg in consultation with all interested parties will remain an integral part of the new regulatory regime. The industry was fully consulted during the preparation of the Bill and I am happy to say that it strongly welcomed its provisions. I believe that following its enactment consumer confidence will be enhanced and the sector will enjoy further development and growth. The transfer of the regulatory function to ComReg will not impose any charge on public funds as provision is made in the Bill for the costs of regulation to be funded by a levy on the industry, as is the case at present. Provision is also made in the Bill for the transfer of staff from RegTel to ComReg, thus ensuring that the valuable expertise built up by RegTel over the years is retained and that no existing staff member suffers any loss as a result of the transfer of function.

Apart from the regulation of premium rate services, the Bill makes provision for ComReg to issue appropriate emergency directions to operators with a view to minimising customer disruption and providing continuity of access to emergency services in the event of an operator exiting the market. Current legislation does not enable ComReg to take action to restore a telephone service within an appropriate timeframe in such cases and this provision will address this deficiency.

The Minister also intends to introduce an amendment on Committee Stage to Part 5 of the principal Act, designating the National Roads Authority as a road authority for the purposes of that Act, to facilitate the installation of next generation infrastructure. This provision will facilitate the roll-out of fibre optic throughout the country to provide additional broadband backhaul connectivity to those areas of the country that require it.

I now turn to the text of the Bill itself. As an explanatory memorandum on the Bill has been circulated, I do not propose to go into detail on each section but rather to highlight the main provisions of the Bill in the order they appear in the text.

Section 3 amends section 10 of the principal Act to provide for the commission to have the additional function of regulating premium rate services, which is the primary purpose of the Bill. Sections 4 and 5 provide for the licensing of services, the terms and conditions that may be attached to a licence and the information that premium rate service providers shall provide to ComReg upon request. This new licensing regime is designed so that ComReg may prescribe the type of service and service provider that will require a licence and will enable ComReg to vary the conditions that will apply to particular types of premium rate services.

The definition of premium rate service in the Bill is necessarily broad so as to capture not only existing types of services but also services that may be developed in the future as a result of developments in technology. It specifically excludes broadcast services, such as pay-per-view, which could, if not specifically excluded, come within the scope of the definition, as these are regulated by the Broadcasting Authority of Ireland.

Certain types of premium rate services will be subject to tighter regulation than others. For example, services such as weather forecasts, traffic news and other information type services will be subject to less stringent conditions than on-going subscription services, advice or chat services that may involve substantial charges on a phone bill or pre-pay card. Accordingly, ComReg will be able to specify different conditions for different types of service in an objective and proportionate manner.

Sections 6 to 8 provide the enforcement measures that ComReg may apply against non-compliant service providers. Under section 6, ComReg may apply to the High Court for the immediate suspension of a licence where it considers such suspension is necessary to protect users or potential users of premium rate services. This is an important provision as swift action by ComReg may be necessary to prevent the continuation of an offending service until further investigative and enforcement action is taken by ComReg.

Section 7 provides that if ComReg finds, following an investigation, that a service provider has not complied with or has breached a condition of a licence, it shall notify the provider of its finding and shall require the provider to remedy any non-compliance within a specified period. The intention here is that such a remedy can include a refund by the provider to affected consumers as is provided for in the current code of practice. The procedure for making such refunds can be provided for in regulations to be made by ComReg specifying the terms and conditions to attach to a licence, which should clearly spell out the obligations imposed on the provider of the service on refunds.

Where a premium rate service provider has failed to comply with or remedy the breach within the time period specified under section 7, ComReg may, if it considers it appropriate to do so, and having notified the licence holder of its intention and having considered any representation made by the licence holder, revoke, amend or suspend the licence for a period. If the failure to comply with a condition is considered by ComReg to be a serious breach, the revocation, amendment or suspension takes effect upon notification.

Section 9 provides that a service provider aggrieved by a decision of the commission to refuse, suspend or revoke a licence has the right of appeal to the Circuit Court against the decision within seven days of notification of the decision. Sections 10 and 11 provide for offences relating to the provision of unlicensed premium rate services and for overcharging for services or charging for services not supplied. It also provides for the court, on the application to it by the commission following a conviction, to make an order revoking the licence and prohibiting the licensee from reapplying for a new licence, either permanently or for a fixed time.

These enforcement provisions are designed to give ComReg maximum effectiveness in deterring non-compliant service providers from operating in the market. The requirement that each service provider must apply for and hold a licence covering the services it provides is significant. It enables ComReg to refuse to grant a licence under specific circumstances or, if granted, to specify the conditions that attach to any particular licence. It also provides a mechanism whereby a licence may be amended, suspended or revoked, depending on the nature of any non-compliance with the conditions of the licence.

It is important for the industry as a whole that the small number of service providers that are responsible for the large number of complaints from consumers are subject to dissuasive sanctions and, if necessary, may have their licences suspended or revoked. The vast majority of service providers who are compliant need have no fear of these provisions. On the contrary, they have welcomed the proposed provisions as an effective response to those who are bringing the whole sector into disrepute and undermining public confidence in the industry.

As I stated earlier, the involvement of the sector itself in maintaining high standards through a code of practice is an important element of effective regulation. Section 13 of the Bill provides for the preparation and publication of a code of practice by ComReg following consultation with interested parties and with other statutory bodies. Apart from consultation with service providers and other stakeholders in the industry, this would include consultation with bodies such as the Broadcasting Authority of Ireland, which has statutory responsibility for broadcast content, a medium through which many premium rate services are advertised, and the National Consumer Agency, which has overall responsibility for protecting consumer interests. In this way, a consistent approach by the relevant statutory bodies in both consumer protection and content related regulation will be ensured. Compliance with the code of practice will be a condition of a licence and, consequently, non-compliance with its provisions may result in a sanction being imposed.

The Bill also provides, under section 16, for the transfer of staff currently employed by Regtel to ComReg on the same pay and conditions to which they were entitled while in the service of Regtel, subject to the consent of the Minister and the Minister for Finance. This will provide ComReg with the expertise and resources necessary to enable it to carry out its new function effectively from the outset.

In order to minimise customer disruption and to ensure continuity of access to emergency services, section 18 provides that ComReg may issue an emergency direction to an operator providing wholesale access to another operator, in the event of the exit from the market of that other operator. Deputies may recall that a situation arose in 2006 where an operator informed its customers that it was no longer in a position to provide them with a service. While ComReg played a significant role in mediating a solution that allowed those customers to switch to an alternative service provider, it had no statutory basis on which to do so. This provision rectifies that situation.

The Bill is an important measure in contributing to the effective regulation of premium rate services in Ireland. The proposals it contains are measured and proportionate responses to the challenges that will face ComReg in establishing effective regulation of these services and protecting the users of those services. I am confident that the provisions contained in it will result in greater consumer protection and confidence and growth in the industry.

Apart from the amendment to Part 5 of the Principal Act, to which I referred earlier, and any amendments of a technical legal nature that may be agreed in conjunction with the Attorney General's office, I do not intend to introduce any substantive amendments to the Bill on Committee Stage. I look forward to hearing the views of the Members of this House and their assistance in facilitating its early passage into law. I commend the Bill to the House.

This necessary Bill is welcome on a number of levels. First, it reaffirms the principle that we should be trying to amalgamate the various regulators dealing with the communications and broadcasting area generally into one strong well-resourced regulatory body, and ComReg is the appropriate body for that. In the same way that Deputy McManus and I would have made the case that perhaps the new broadcasting authority should also have been amalgamated into one strong communications regulating body, I welcome the removal of Regtel and the transfer of the functions from Regtel into ComReg, while also giving extra powers in the area of premium rate services to ComReg. This is an area that has grown too big in recent years to accept that voluntary regulation is sufficient to deal with the potential abuse from the targeting of very vulnerable mobile phone users in many cases, but also of vulnerable fixed line users in some cases, for the profits of companies that are providing premium rate services.

I do not want to give the impression that companies that provide premium-rate services should be pariahs; they should not. There is a genuine industry in information transfer and it will be increasingly important in the future as people rely predominantly on their mobile communication devices, although also on fixed-line services and their computers, to update them with information that is useful for work or of general interest. We cannot stop this tide. People will be using mobile hand-held devices for all sorts of services we probably cannot imagine. A major feature of this will be the transfer of information and the charge for that information. Our challenge as policy makers and protectors of the public interest is to protect people from scams, from people who are willing to abuse the transfer of information, and from people who will take advantage of genuine ignorance in consumers and, in many cases, children who are not capable of anticipating the abuse that may occur.

In case anybody thinks this is a small niche area, I will give some figures. Premium-rate services on fixed lines and, particularly, mobile devices represent an industry that was worth €95 million last year. In 2008, Irish people received 76 million chargeable premium text messages. We are talking about multiple messages for every person who has a mobile telephone in Ireland. Some are specifically targeted because they are easy targets and we need to protect these people. We must ensure that there is a regulator and that he or she is on top of the technological advances that happen constantly and has the power to penalise people when they break the rules. ComReg is now being asked to put in place and enforce a code of practice. We have given it the power to impose fines of up to €250,000, which is appropriately large for companies who are consistently abusing their position, as has been the case in certain instances.

There is growing concern about this issue among the public. If we consider the figures from last year we will see that Regtel received more than 6,000 complaints about premium-rate services, compared to only 1,700 the year before. This represents a fourfold increase in the number of complaints. It also corresponds to a dramatic increase in the number of texts and other premium-rate products. This is not all about text messages; there are also telephone psychics, weather forecasts, music, sports updates and many other services. Many of these are useful, but the issue is whether they are properly advertised and charged for.

Another interesting trend is the number of people who have contacted the regulator to obtain information on how to unsubscribe from a service. For example, a child may come home from school and say he or she signed up to a service to keep up to date with the Top Ten singles charts, but the information is now arriving every day and he or she does not know how to stop it. Parents are finding themselves in a position of ignorance in this regard. Last year, 22,000 people contacted RegTel to ask them how they could unsubscribe from services.

There are a number of demands and concerns that the public have to which we must respond not just through this legislation, but also by giving ComReg the resources to engage in an education process of both parents and children, as well as consumers generally, with regard to premium-rate services. I ask the Minister to consider the resources that will be available to ComReg to do this. Increasingly, people need such information quickly. It is to be hoped that they will be able to obtain it on-line from ComReg, but they should also be able to make a telephone call to hear in simple English how they can stop a premium-rate service. They should also be able to find out how to inquire about whether the service is safe and whether the company is reputable and has a licence. If, for example, a parent is trying to protect his or her child from a premium-rate service, he or she should be able to get information on the provider of the product. I welcome the legislation, but we need to put a full package in place.

I apologise as my mobile telephone is ringing.

I hope it is not an unsolicited premium-rate text message.

It is not. It is my wife, actually.

The Deputy does not know how to stop her.

I assure the Minister of State it is not unsolicited.

ComReg cannot help the Deputy there.

We need to put the full package in place. The committee on which Deputy McManus and I sit discussed this issue in some detail in the context of mobile telephone bullying and the targeting of young people and pupils in schools by cyber-bullies. This was simply a non-issue five years ago, but it is one now because of technological advances and the fact that the vast majority of people above the age of about six now have mobile telephones. Some people have two or three mobile telephones or different types of PDA device. I ask the Minister, in the context of this legislation, to consider also the issue of cyber-bullying. Even though it is not directly related to this Bill, there is certainly a link.

I will provide some figures on the use of mobile telephones by young people. Fifty-five percent of all five to nine year olds in Ireland now have a mobile telephone, while 90% of ten to 14 years olds have one. A total of 410,000 children under the age of 14 have a mobile telephone, and that number is growing. I expect that in the not-too-distant future 90% of five to nine year olds will have some form of mobile telephone. All these people are seen by the industry as consumers, even though they are children. They need protection not only from potential abuse by their peers — in the form of text bullying between young people — but also from elements within the industry that may well see them as a soft target. I am glad to say the vast majority of service providers will not behave in that way, but we must ensure that this does not happen because young people can inadvertently sign up to premium-rate services without even knowing about it, whether they are on a "pay-as-you-go" tariff or a monthly payment.

We have had the mobile telephone companies before the committee on at least two occasions to ask them what they are doing on a voluntary basis to respond to cyber-bullying, and we are not happy with the pace at which the industry is responding to the issue. There has been some progress; I will not go into the products being provided by individual operators, but some are better than others. I would also like to see ComReg being given the power and the capacity to monitor the industry. It should be able to let the industry know it is being monitored on this issue and that if these products do not become available on a voluntary basis, it has the go-ahead from its political decision makers to introduce enforceable codes of conduct.

The premium rate services and cyber bullying issues are linked, which should be mentioned a great deal more in this discussion. One could make the case that an adult fooled into believing he or she is obtaining from a premium rate service a product at a cheaper price than that which he or she is actually paying should know better and that if he or she does not should learn more in order to know better, unless there is blatant abuse in respect of which ComReg needs to deal with the provider. More than half of all five to ten year olds have mobile phones and we must protect them. If the industry is not taking this seriously we must come down on it like a tonne of bricks. I am willing to do that as are members of the Labour and Fianna Fáil parties who are members of the committee.

I would like included in this legislation a mechanism which signals to the industry that we are taking this seriously. We hold a stick over the alcohol industry in that if it does not act responsibly in terms of alcohol advertising we can legislate to force it to do so and we need to do the same in respect of mobile telephone operators in the area of child protection and cyber bullying which could potentially abuse vulnerability. I believe this type of approach would get cross-party support. I ask the Minister of State to consider this matter and to have his officials look at it.

On the technical side another problem with premium rate services which I have experienced is how one unsubscribes from a service. Unsubscribing from a service is sold as a simple mechanism. It is stated that one need only text "Stop" to a particular number and one will no longer receive the unsubscribed messaging service. However, that does not always happen. I have tested the system and while it often works, other times it does not. I tried to unsubscribe from a premium rate service in regard to political information but I continue to receive messages from the service.

ComReg's challenge is not alone to regulate the industry but to provide consumers with basic information and a channel of communication. This will ensure that there are consequences when people do not obtain the type of service they could reasonably expect. Last year Regtel reimbursed to consumers almost €20,000 arising out of issues such as inability to unsubscribe to a service and so on, which is happening on a fairly widespread basis.

What this legislation sets out to do is correct. ComReg is the appropriate body to regulate this industry. I would like if the Minister could do a little more with the legislation, although I accept what is contained in it is good. Also, we should put in place a warning mechanism which ensures the mobile telephone industry, as well as the premium rate service industry, is aware we believe there is a developing problem in terms of cyber bullying, on which we do not have a handle and with which the industry must assist us in finding solutions, which do exist. Some of the products becoming available severely limit the capacity of children as targets. While I believe this Bill will have an easy passage through the House, Fine Gael may table some amendments on Committee Stage in respect of cyber bullying.

While we can make generalised comments in our contributions on Second Stage debates of legislation, we do not in terms of legislation need to respond in an overly restrictive or harsh way in a space that is constantly developing and modernising. Cyberspace is doing just that. We do not want Ireland to develop a reputation as a country over-regulating or restricting investment and business opportunities in this area of essentially selling information via a communications infrastructure or network. The legislation strikes the right balance in that regard. We are asking ComReg to do four tasks in terms of putting in place a code of practice, new offences for overcharging, fines and licensing. There is always a balance to be struck between over-regulation and taking an overly protective approach to consumers that will drive investment in this area to other parts of Europe or the world, which would be a lost opportunity. Ireland needs to create a new economy which is based on information and IT infrastructure and on the sharing of information and services be it from a Government and public services point of view or from within the private sector.

I accept we are not trying to create a type of police state in this area of communications because by and large the vast majority of premium rate services are subscribed to on a voluntary basis because people want the information and are happy to pay for it. This is an industry that in my view will continue to grow dramatically year on year. I believe the level of chargeable texts, currently 76 million, may double in the next five years and that the industry will in the same period grow from €94 million to approximately €500 million. It is a service consumers want and will choose.

The challenge for us is to allow that marketplace and the employment and opportunities that go with it to develop while at the same time protecting vulnerable people who do not have the knowledge or capacity to recognise when they are being over-charged or abused. I look forward to addressing the legislation line by line on Committee Stage and trying to improve it.

I support the purpose of this Bill. It makes sense to put the regulation of premium rate telecommunications services under the same roof as the regulator of telephone services by amalgamating ComReg and Regtel. I, like Deputy Coveney, wish the same thinking had led the Minister to the amalgamation of ComReg and the broadcasting authority but that is a matter for another day.

It is worth noting the good work done by Regtel over the years. Self-regulation always has risks but it should be said that Regtel has played a significant role in protecting customers and delivering best practice. It is important that this change upon which we are embarking is for the better and builds on the experience garnered by Regtel since its inception in 2001. ComReg will be in a better position to regulate the industry. It is bigger, better funded and has stronger links with other market players but it is vital that the Minister does not inadvertently or otherwise fall into the trap of weakening the existing powers of regulation.

The Bill deals with two parties, the regulator and the licence holder, and defines clearly the relationship between the two in terms of licensing arrangements, penalties when offences are committed, resourcing and powers and accountability responsibilities similar to those that apply to telecoms and postal services. There is, however, a third party who is central to this debate and should be central to this legislation — the consumer.

The Bill is largely enabling the amalgamation of two bodies but it has a serious flaw, one big hole below the waterline that needs attention: the problem of consumer refunds, which are not mentioned in this legislation. According to the Bill, ComReg "shall notify the provider of the findings and require the provider to remedy any non-compliance or breach". The power to order refunds, however, should be expressly set out in the Bill. In addition, the Bill should empower ComReg to set out in regulations the mechanism for refunds which would not require the wronged consumers to incur time or expense pursuing claims for compensation.

Under the present regime, a code of practice signed up to by service providers, Regtel may order refunds to be made to consumers where necessary. The sums can be high. The last Regtel annual report for 2007-8 lists refunds of approximately €200,000. One case accounted for 85% of the total refunded. Following Regtel's intervention a service was suspended without having resort to any formal procedures. A total of 27,000 consumers were removed from the database with the service provider agreeing to make a voluntary refund of €179,000 to the people affected. This is a significant amount which is greatly appreciated by the customers in question. In the Bill, however, under the proposed new regime there is instead a penalty for overcharging — a fine of up to €5,000 euro in a District Court, with higher penalties in higher courts.

It should be pointed out that overcharging is not the major problem experienced by the public and it makes little sense to single it out for legislative sanction alone. The major problems relate to subscription services and how to get out of them, misleading promotions and failure to warn people when they have exceeded price thresholds.

Last year 6,000 complaints were made to Regtel about subscription services and premium rate services. While the majority of service providers comply fully with the current code of practice there is no doubt that many people including children have been ripped off by a small handful of profiteering shysters. According to the current regulator, up to 95% of companies pose no problem and behave within the law. It is worth noting that under the Regtel regime, Ireland has been free of the television voting scams that have damaged the reputations of BBC, ITV and Channel 4.

The rogues exist, however, and it is vital that customers benefit from this new law. Like other Deputies I have received complaints from constituents about the problems they experience. The costs run up by phone customers in many cases were exorbitant. There are many examples where customers were unfairly charged and were then faced with a battle to obtain refunds. For example, one phone customer outlined how he topped up his mobile by €20. Twenty minutes later, although he had made no phone calls he was down to €12 and then €2. His €20 credit was gone within a half hour. After making inquiries, he went to ComReg and found that a premium service provider had debited his account. He is convinced he did not send this company anything to authorize them to do this.

Another person had up to €80 taken from his account. Initially this person went to Regtel, ComReg and the Small Claims Court to no avail. Regtel did eventually manage to get on to the company to get the company to write to him.

A constituent contacted me with the following experience:

Yesterday my husband and my son were scammed out of money in the same day. Both were mobile phone scams. The first one was when I logged on to the Irish jobs website and followed a link which called for candidates for castings in the TV show "The Tudors". I put my son's phone number in and then he received 4 texts within a two second period and had lost €20 call credit. I told him to text back stop immediately. I was so annoyed as I had topped up his phone as he is doing the leaving cert and needed his credit. At the very bottom of the web page it said €5 per text but nothing about receiving 4 texts for €20. I contacted the company who said they would refund him, I am very dubious about receiving any money back.

My husband John topped up his phone by €25 yesterday and received a text immediately for something he did not sign up to. He was charged €2.50. When he disputed this with 02 they said he must have signed up to something. He emphatically denies this. They charged him another €2.50 for the stop text he sent.

I also contacted the government agency dealing with this. They did take the details but said we would have to chase any refunds from this companies themselves. By the way they all charge a premium rate while on the phone to them trying to obtain refunds from them.

As my husband did not sign up for anything someone else must have entered his number either by accident getting a digit in their own phone number incorrect, or someone being just malicious. What is to stop anyone logging on to these sites and entering phone numbers of people they have a vendetta against?

Irish Psychics Live is one of the premium rate services run by Realm Communications which has been under the watchful eye of Regtel. In June this year it was reported in the Sunday Tribune that Realm Communications made a pre-tax profit of nearly €1.75 million for the year ended 30 April 2008, down from €2.25 million a year previously. This has been put down to the successful “Stop” campaign run by Regtel. The profits in this business are considerable even with an existing code of practice. Retained profits at Realm Communications stand at just under €8.5 million. Realm’s directors’ pay and other emoluments rose to more than €300,000, up from €135,000 the previous year.

A caller to "Liveline" outlined how he received a bill of €1,108 for one night from Irish Psychics Live. This person had mental health issues but Regtel's code of practice that a call must be terminated by forced release when a charge of €60 is reached was clearly not followed in this case. No prosecution followed.

Regtel has managed to tackle some of the rogue companies to some effect. Among the measures which were somewhat effective was a code of practice which put a limit of €60 cost per call, with a warning given to the customer after having spent €30. A requirement that operators of psychic, tarot and horoscope services must clearly state that they are for entertainment purposes was also welcome. The public campaign educating phone users about how to deal with unwanted texts from service providers was well advertised and effective. This campaign empowers customers to opt out of receiving unwanted texts by simply replying with the word "Stop".

It is clear that we are in a new era of communications. Technology is moving fast and it is difficult for any regulator to keep up to date with companies intent on making profit on the backs of cheating vulnerable people. I would suggest that section 5 be amended to take into account the changing market. ComReg is required in the Bill to list every class or type of PRS that must be licensed. It would be better to have the presumption that services must be licensed and to give ComReg the power to exempt certain classes. This is a safer option and allows for future innovations to be regulated.

The current regulatory system is not perfect but it does allow the current regulator to tell the networks to freeze payments to a service provider for a service in dispute. This is a very useful sanction so why does it not appear in the Bill? Instead, errant service providers can be fined, which is well and dandy, but no consolation to the unfortunate consumer who ran up a huge bill because a service provider "forgot" to send the price warnings it was supposed to. As we all know court proceedings can be slow while a freeze of payments hurts straight away.

To be fair, the Bill sets out a sound legislative basis for the prior licensing of premium rate telecoms services that are necessary and welcome. I applaud the Minister and his Department officials for that, but it is noteworthy that it only deals with two parties, namely, ComReg and the service providers who become licence holders. The consumer is invisible; a powerless bystander in a legislative transaction between the regulator and the regulated. If it were a road traffic measure it would be punishing the bad driver, but offering nothing to the victims who suffer injury. I was a little concerned when the Minister of State said that he would not be proposing any substantial amendments.

I hope that the Minister of State will have an open attitude to the amendments that I will be tabling to this Bill when the time comes. It is a good Bill, but with co-operation, it could be great Bill. For example, section 7 should be expanded to mention refunds explicitly. It needs to be expanded to empower ComReg to deal with minor breaches, which represent the everyday currency of regulation. ComReg needs backing in this Bill to get the people's money back without running down to the courts every time. That power must be incorporated in the Bill if it is not to be challenged in the courts.

Children are vulnerable to exploitation by unscrupulous operators. The Minister for Communications, Energy and Natural Resources has expressed his concern about this issue. He said: "Children especially are inadvertently running up large bills on their mobile phones. Essentially, they are subject to a scam." If the Minister wants to be taken seriously he has an opportunity to add a provision in the Bill that when mobile phones are sold, the name and age of the intended user be registered. In that way, much of the problem of under age access to inappropriate premium rate services can be resolved. No doubt he will encounter opposition from business, but it would be a good safeguard. In the meantime, parents need to register their children's mobile phone with the phone company, making sure the child's age is given.

There is a small matter which may not be significant but is worth mentioning. Section 6 allows for an application to be made to the High Court to suspend a licence. Section 8 allows ComReg to suspend a service. I question whether these provisions should not be in reverse order, so that the first step is for ComReg to stop the service. If that does not work, it asks the High Court to do the job. I suggest that section 8 should come before section 6 and then be followed by section 10, which contains the penalties where an earlier effort fails. The order may not matter, but in the interests of clarity it might be helpful to make the reversal. I propose that ComReg be empowered under section 6 to suspend temporarily any licence either in full or any particular services provided under a licence, until such time as an investigation can be completed. This provides for swift action while an investigation proceeds. RegTel currently has that power. The Bill requires ComReg to apply to the High Court in an emergency, something that is unnecessarily burdensome.

There is also a need to create a criminal sanction for breaching licence conditions as a deterrent to curb harmful practices. Various PRS providers have been prosecuted by the Data Protection Commissioner in the District Court and ComReg should be afforded similar powers. Again, the consumer is protected where the regulator has such powers.

There is a curious mention in the explanatory notes attached to the Bill on a number of amendments to the Communications Regulation Act 2002, relating to the carrying out of works on public roads to facilitate the laying of fibre optic cables. Nobody would object to the purpose involved. However, I have been in this House for many years, and I cannot ever recall sections of a Bill which relate to another Act being flagged on Second Stage as an intended bolt-on, without us having sight of those sections. It is a kind of virtual legislating which flies in the face of everything we do here. Second Stage is where these sections should be debated, not Committee Stage. It is not acceptable that we are to take on trust what should be a matter of public scrutiny and information. I want to express my opposition to what is shoddy work by the Minister. If these sections are not now in the Bill, then they should form part of a separate Bill. Second Stage is part and parcel of the legislative process, but this element is being introduced on Committee Stage and we cannot see it. That is a completely different situation from where amendments arise during the period between Second Stage and Committee Stage. I am uncomfortable with the issue, to put it mildly.

I hope that the Minister is open to amendments and at least takes on board the outline of the amendments I proposed. There is always a danger when the Opposition brings forward amendments and the Minister has all the power he wishes to slap them down. It would be in the interests of the Minister and in the regulation of premium rate services that we get this right. That means putting the consumer centre stage in this Bill, because it is ultimately all about the consumer, rather than Regtel, ComReg or people making money in an industry. This means we have to deal with issues such as refunds for consumers, and making sure the licensing regime still works in a very moving market where innovations come up all the time. ComReg may not be in a position to deal with such innovations if there is not an automatic presumption that a service must be licensed. None of us can keep up fully with what is going on in the telecommunications world because it is moving so rapidly. There also needs to be a regime for breaches in licences.

I am talking about practical amendments here. I am not talking about changing the spirit of the Bill, simply about improving it. If the Minister consults with his officials, I would be surprised if his advice is not to take on these particular points. They are to do with tweaking rather than altering the nature of the Bill. Considering the bank of knowledge that has been built up by the experience of Regtel, we will be doing a disservice if we do not use it to best effect. That means amending this Bill in small but very significant ways.

I welcome this Bill. Anybody in public life will have come across examples of scams on children who use mobile phones. We must remember that mobile phones are a way of life in this country. We should distinguish between the minority of premium rate companies that are abusing the situation and the service providers that are largely well run, well organised commercial operations. The Joint Oireachtas Committee on Communications, Energy and Natural Resources has been examining this particular area for some time. We visited a number of the service providers and they run a very upfront, professional operation. It is unfortunate that the issues highlighted by the public get all the publicity and that we fail to see the good work being done by commercial mobile phone operators.

It is timely that this Bill is brought before us for the prior licensing of premium rate subscribers. It is frustrating to hear the problems experienced by individuals. Most families could highlight occasions when this form of extraction of money has been used against them or their extended families. A number of families have contacted me in the past two or three months to report blatant abuse by such premium rate services. We must try to achieve a situation where rates are more transparent so that when people are invited to enter a competition or to answer a question they are aware that by doing so they are signing up to a premium rate service. During the summer I saw an advertisement on television for one of these services, but I had to get very close to the television to see the small print which gave the cost of the service. That is not the way to do business.

I commend RegTel and ComReg on the work they are doing in this area. However, more must be done, although many people have yet to be convinced of that. The 6,000 complaints made to RegTel last year are evidence there is work to be done. There is a comprehensive provision in the legislation before us with regard to the licensing of premium rate services. This is welcome because in informal talks we have had with people in the industry we have been told their experience is that many of the operators are based overseas. These operators set up a shelf company here and work through that. When they have extracted a significant amount of money from Irish mobile phone users and RegTel or ComReg eventually catch up on them, they close down, liquidate in some cases, and leave. However, by then they have already amassed significant revenue from unsuspecting Irish customers.

I welcome the provision in the Bill that provides that the names of the directors of companies and their contact numbers must be submitted in order to secure a licence. I understand that currently many directors just establish another company. They change the name of the company, but it is the same individuals behind them. Having changed the name, they start up again and work for five, six or seven months before they are caught. It is important this provision is enforced. It is also important that conditions can be attached to licences, particularly where experience has shown some such companies have a track record of sailing close to the wind or have used shoddy practices in the past.

Section 8 allows the commission to revoke, amend or suspend a licence, but must notify the holder of the licence or proposer and afford them an opportunity to make representations within seven days of the commission's proposal. I note too that the commission can revoke, amend or suspend a licence within a short time. Where there is clear evidence of an abuse, it is important the commission, having investigated the matter, acts quickly.

Previous speakers have highlighted cases of abuse, the majority of which came to light through the use of prepaid mobile phones. In some of the cases I have come across of people with a bill-pay phone, abuse has continued for a number of weeks and it is only when subscribers have received their bills that the abuse has come to light. At that stage a huge amount of expense has been incurred by the subscriber as a result of being unaware of the extent of the abuse involved through their phone usage or responses to questions sent to their phones.

The Joint Oireachtas Committee on Communications, Energy and Natural Resources has examined the question of cyber bullying. A number of companies have been proactive in trying to deal with this problem and over the next few months we will see even further advances with regard to the protection of children, young children in particular. We are concerned about cyber bullying and any legislation we introduce should include an open-ended section which, by ministerial order or regulation, will allow the Minister or regulatory authority to change or amend the regulations. Technology changes at such a fast rate that if we had to wait and depend on legislation to be passed, we would encounter significant difficulties before such matters could be resolved.

While self-regulation has worked by and large, the Minister and ComReg can make a serious input with regard to abuse by premium rate services. The majority of premium rate services are straightforward, upfront and positive and it is only in a minority of cases there is abuse through the premium rate text service. It is that area with which we are trying to deal in the Bill. We must regulate and sort out the problem of deliberately misleading information being put out in the form of an introduction or which sucks young people into a premium rate service. Self-regulation is not working in this area and regulatory authorities, not just here but overseas where the same problem exists, must introduce legislation to overcome the problem.

I welcome the legislation and hope it has a speedy passage through the House. I hope that amendments which will enhance, improve and strengthen the Bill will be taken on board by the Minister.

I thank all Members who contributed to this debate. Their contributions were extremely positive. I take this opportunity to reassure them with regard to some aspects of their contributions. Deputy Coveney focused on the increasing revenue stream companies derive from premium rate services, a valuable benefit to those companies. However, it is important, as Deputy McManus said, that the consumer is not lost in the rush to embrace these services. Deputy Coveney is correct in saying we will see an increase in the revenue stream from these sources in the future.

It is a long time since I worked in the mobile phone industry — I am a long-term inmate of this place at this stage — and I find it extraordinary to see the extent to which the level of texting and services offered via text and mobile phone or fixed line telephones have opened up. This will continue the more fibre we lay and the more the technology improves in terms of the telephone instrument and its software. We will see an increasing diversity of development in this area and we need to put the consumer in a position whereby he or she is not second placed to the industry and its voracious appetite to develop further chargeable services. Deputy McManus's assertion that the balance needs to be right in any regulation we introduce here is important, so that ComReg, the new regulator of this area of activity, can impose sanctions and guide behaviour or misbehaviour as it occurs within the industry.

I was pleased to hear most Deputies preface their remarks about the difficulties encountered to date with Regtel, with the very strong caveat that, broadly speaking, it has been an effective self-regulatory experience. However, some people have been able to evade that regulation because, in effect, they are rogue operators not succumbing to industry norms or the best practices demanded by the industry. That is why we are putting it on a proper footing.

We have yet to receive permission from the Minister for Finance for it, but one of the key aspects to this is the transfer of the staff from Regtel to ComReg so that the people conducting the regulation in the State-sponsored new regulatory body will be working from a position of strong knowledge and experience developed at Regtel. That is a valuable reassurance to Deputy McManus in particular——

I would be more reassured if the Minister of State had the permission.

——who had concerns about the transfer or change from Regtel to ComReg, namely, that similar powers, sanctions and scope of action should be available to the industry and consumers of its many different offers. She may take some reassurance from that. I cannot tell the future as to whether I shall be supervising the Committee Stage of the legislation, but I should like to reassure Deputy McManus that the Minister, Deputy Ryan, will be open to sensible proposals that strengthen the Bill in an appropriate manner. He does not, and neither do I, envisage substantial amendment to the Bill, but we should all welcome the robust strengthening of the legislation. That needs to be teased out in greater detail. We need to note also that the "Stop" campaign has been successful. I believe Deputy Coveney raised this issue. This was an awareness campaign launched on television and radio by Regtel in autumn 2007 to help people to unsubscribe from these services. There were 20,000 calls as a result and the campaign was repeated in spring 2008 at a cost of €270,000. The industry, therefore, has made a substantial commitment towards encouraging people to learn more and to find out how they can unsubscribe.

I would be interested in the details. I do not know whether Deputy McManus wishes to share her husband's poor experience on——

It was not my husband, but a constituent. I keep well away from people who provide services.

I am sorry, I thought the Deputy was referring to her husband. Whatever the case, we should welcome the details if that is agreeable to the constituent, because it is these examples or practical experiences that help us to understand what is happening. It is very disturbing and the industry needs to take warning from us and the Government generally, if there is a suspicion that people are scamming or "skimming" as in former years in the banking industry where small percentile amounts were deducted across a large swathe of customers, amounting to a great deal of money. This is practised in casinos, I understand, as well. If this type of practice develops where software is being used to scam or skim people of their money, however inadvertently — there is no "stop" button to stop that type of elaborate programming — much more robust powers will need to be given to ComReg. Any incident that involves someone being deducted, having not subscribed to a service, is a very serious matter, and it behoves us as public representatives to bring such matters forcefully to the attention of ComReg. At one level the regulators are removed from us, but it is important that we, too, put them under pressure when we learn of individual cases of this type.

Deputy Nolan made the point that we must distinguish between the scam merchants and the reputable operators. This industry, largely speaking, is reputable. We must now ensure those who are not are chased out of the industry and we can enjoy some of the benefits that derive from it, as we do already, whether it is for weather forecasts, or people using maritime resources at the weekend to get relevant timely information. All of these services are valuable and of some societal benefit, I suspect, even where they are premium charged. We need to see their development.

I am conscious of the fact that I am standing in for the Minister, Deputy Ryan, but I am also the Minister of State with responsibility for science, technology and innovation. We can achieve great societal benefits as well as economic gains from using these technologies appropriately. The issue of cyber bullying is complicated and clearly comes under the aegis of the Minister for Justice, Equality and Law Reform, Deputy Dermot Ahern. However, the industry has been promoting campaigns in this area, and making technology available that makes it easier for parents to stop, block or prevent this type of activity. It is very difficult and challenging behaviour.

It was with a certain foreboding that I allowed my young children to have mobile phones as presents recently. I am reassured to some extent, because it seems that children use mobile phones more for the games than the telephone calls, which surprised me. Again, there is an issue here as regards the advertising of games that may be downloaded. It is important that only appropriate games can be downloaded and we really are dependent on ComReg to ensure young children are not exposed to games that are inappropriate, whether relating to violence or other unsavoury aspects.

The problem is that there is no mechanism to do that. We need a code of conduct for that area and only ComReg can do that.

That is correct, and I shall be looking to ComReg to do that because this is a very dangerous area, where children can be exposed to extremely violent games at a young age and assume this is some type of normal behavioural pattern. It is an area of enormous challenge for ComReg. I was genuinely surprised at my children. I assumed I was facing into a series of very expensive pay-as-you-go top-up bills, but the main reason mobiles are being used in my children's case — and in the case of many others, I believe — is to swap and exchange games of one type or another through the Bluetooth connection and to download them. As technology emerges in the future, that will be a major area of concern for parents and children and ComReg would be well advised to focus on it. We hope that whatever ComReg and the industry do in their consultations together will address this issue to avoid problems down the line.

I thank the Deputies and reassure them that we shall be open to accepting amendments on Committee Stage. I do not want to relegate them as being insubstantial, although I believe that inference may be taken from the script where I said we were not envisaging substantial amendments. However, if through the ingenuity and interest of the Deputies opposite, and in recognition of the hard work of the committee already in this area, there are significant issues they believe can and should be addressed by this Bill, then we shall do so. As regards the technical point raised by Deputy McManus, the reason for the delay is that the draft amendment is still with the Attorney General and that is why she has not had sight of it. However, we shall bring that to her attention. Again, if there are specific detailed issues which Deputies want clarified before we get to Committee Stage, they should feel free to contact us and we will try to clear up any details.

Does that mean we will be sent a copy of the sections that are with the Attorney General?

Yes. We can easily facilitate the Deputy in that regard. I will ask the officials present to make contact with the Deputy with a view to ensuring she is fully au fait with the Bill before Committee Stage.

Question put and agreed to.
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