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Dáil Éireann debate -
Thursday, 31 Mar 2011

Vol. 729 No. 1

Communications Regulation (Postal Services) Bill 2010 [Seanad]: Second Stage

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

I am pleased to present this Bill for the consideration of the House. The Communications Regulation (Postal Services) Bill is the first piece of legislation I will be introducing to the 31st Dáil and I am pleased that it is such a significant one. The Bill was passed by the Seanad last December and was introduced in this House prior to its dissolution in February. I have read with interest the contributions made by Senators and Deputies during the earlier Stages of the Bill. As befits a discussion about a service that is so important for the country both economically and socially, many Senators and Deputies spoke on the Bill and I agree with many of the sentiments that were expressed.

Although the Bill I am re-introducing today is as passed by the Seanad, I wish to advise Deputies that there are a number of very specific proposals with regard to the Bill in the programme for Government, to which I will give my full consideration before Committee Stage. These proposals include the duration of the designation of An Post as the universal postal service provider; the provision of Exchequer funding for provision of the universal postal service; and the requirement for ministerial approval for ComReg's decision on the designation of a universal service provider. My consideration of these proposals will be guided not only by my own deliberations and meetings with relevant stakeholders, but also by the discussions in the House. I look forward to listening to contributions from across the House on this important Bill. I intend that at the end of the legislative process the Bill will reflect the concerns and wishes of those who spoke and the people they represent, in so far as these correspond with the best approach for Ireland as a whole.

The postal services market has been fully open to competition since 1 January of this year under the third postal services directive, and competitors to An Post are now free to enter the letter post market. The aim of the Bill is to establish a robust regulatory framework for this newly liberalised postal sector. The economy and society at large need a strong and vibrant postal service, and a framework is needed which takes account of the significant challenges facing the sector over the coming years. The Bill incorporates mandatory provisions under the third postal services directive, such as the safeguarding of the universal postal service and the removal of the remaining area reserved to incumbent postal service providers, plus other provisions to achieve the spirit of the directive. This directive is a significant milestone for the postal sector in that it is the final step in the opening of the market.

The Bill aims to strike a balance between safeguarding the universal service, protecting consumers' interests and establishing a framework for the development of a competitive postal sector providing high quality postal services. It represents a pragmatic approach to the opening of the postal sector and the aim is for the individual consumer, the business sector and the wider economy to benefit from increased competition and a broader range of services.

That the sector is facing challenges must be acknowledged. Liberalisation and competition will pose challenges for An Post, but there are far greater and more immediate threats to An Post and its business model. The ongoing effect of the recession and the impact of electronic substitution are having a far greater impact on An Post's letter post market than will any market entry by traditional postal competitors. The migration from post to electronic communications will only accelerate and it is essential that An Post adapts to this new reality. An Post's situation, however, is not unique. Postal service providers worldwide are having to reinvent themselves. A reliance on legal protections that shield An Post from competition will not ensure it is in a position to face other challenges. In fact, ignoring or turning a blind eye to liberalisation only delays acceptance of the reality of the postal market and, as trends accelerate, will leave An Post in a weakened position and less able to compete.

As a form of communication, the postal sector worldwide has evolved. A total of 90% of letter post is now business-related and this has implications for how postal service providers, including An Post, must position themselves. It requires far greater flexibility and a focus on innovation to meet the evolving needs of users, particularly business users, and maximise the value added by post to their customers. A commercially focused An Post, offering high-quality, competitively priced services, is a must for the development of the postal sector. This was the strong message from stakeholders, including competitors and potential competitors to An Post. Everyone expects that An Post will remain an important player in the market.

An Post must look afresh at its relationships with its customers, and, indeed, its competitors, and adapt accordingly. It must actively seek to meet the needs of its users, consider ways of harnessing the potential of electronic communications and incorporating them into its product offerings and increase its business accordingly. Success in this regard will be critical in ensuring that An Post remains strong and is the postal delivery company of choice for the foreseeable future.

An Post has many genuine strengths, such as its dedicated workforce, its trusted brand and its strong, visible presence in every community in Ireland on every working day of the year — a presence that few, if any, competitors will be in a position to replicate. An Post and its staff must play to these strengths and ensure that its resources are aligned with the needs of its users. To do so will involve significant change and I understand this is under way. The adoption of such a strategy offers the most sustainable future for An Post and its workforce, given the third postal services directive is a reality. A continuation of the partnership approach, which has delivered significant benefits for An Post in recent years, is the best way for the organisation to thrive in a changed postal landscape.

The Government is committed to a strong and vibrant An Post. Currently, it wins a significant volume of business from Government departments, both for postal services and financial services delivered through the post office network. However, while the Government will continue to strongly support An Post, a reliance on Government contracts in the future is not a valid or robust strategy for it to take to address the challenges it faces.

The Bill does not impact on issues such as the rural post office network, post office banking services and other savings services supplied by An Post. In addition, the delivery of Government and financial services through the post office network is not affected by the Bill. The strong presence of An Post throughout the country will continue, but An Post must fundamentally reinvent itself and I am confident that the management and staff are capable of this. Along with some compulsory elements of the directive, a number of decisions are left to individual member states with respect to how the directive is transposed and stakeholders have been widely and comprehensively consulted on the general approach reflected in the Bill.

The legislation sets out the high level principles underpinning the regulatory framework, striking a balance between ensuring the provision of the universal service, enabling the development of competition and putting in place provisions around consumer protection. Safeguarding the universal postal service is one of the explicit requirements of the directive and is central to this Bill. The universal postal service will ensure the collection and delivery of mail to every address in the State on every working day and it is important that this minimum, but significant, level of service is enshrined in primary legislation.

Another central theme of the directive and the Bill is the protection of the interests of users. In addition to ensuring the universal postal service throughout the country, the Bill also provides for complaints procedures to apply to all postal service providers. The introduction of a price cap will afford protection against significant price increases for those users, including individuals and small and medium enterprises, who do not have the bargaining power to negotiate a better deal for their postal services.

Market opening is a requirement of the directive and the legislation represents a sensible and pragmatic approach to facilitate this. The objective in opening any market is the promotion of effective competition and the encouragement of innovation, all with a view to improving choice and ensuring access to high quality, competitively priced and innovative products. A competitive, customer-oriented postal sector can play a key part in Ireland's recovery of its competitiveness but this will require a sharper focus on innovation and satisfying the current and future needs of consumers.

The opening of the postal sector has been signalled for a long time. Postal reform began in the EU in 1988 with a review of policy to bring the sector into line with the Single Market. In 1992, the Commission published its Green Paper on the subject and the first postal directive was published in 1997. Since then there has been a managed and gradual phasing in of competition to the sector, giving all players time to adapt to the changes and implement strategies suitable for the new environment. The final step is the transposition of this third directive and the removal of the remaining area reserved for incumbent postal service providers.

At its heart the Bill recognises the fundamental difference between An Post and other postal service providers. As the incumbent and the most significant operator, it is appropriate that An Post be subject to the greatest level of regulation. The most significant obligation to be imposed on An Post is that it will be designated as the universal postal service provider. The essential element of the universal service is the collection and delivery of mail to every address in the State on every working day. This minimum service is guaranteed by the directive, and designating An Post offers certainty to that organisation, postal service users, the market and the EU that the universal service obligation will be met.

This designation does not prevent the development of competition. An Post's legal monopoly on the final reserved area — the letter post market — has been removed and other postal service providers have been free to enter this market segment since January. The Bill charges the Commission for Communications Regulation, ComReg, with the objective of enabling the development of competition and innovation in postal services, which should also bring benefits to consumers.

An Post has to date met the costs of providing the universal service from its own resources. It is my strong expectation that the organisation will continue to meet this from its commercial revenues. However, in line with the options permitted by the directive, the Bill contains a provision whereby costs that arise in meeting this obligation which are found to be an unfair burden will be met by the postal industry through a sharing mechanism. It is right and appropriate that those postal service providers competing with An Post within the universal service contribute where the Regulator verifies that an unfair burden exists. This mitigates the impact of potential cherry-picking on the universal service provider. Other member states have also made provision for sharing mechanisms.

Exchequer funding of the universal service is not an option currently provided for in the legislation. However, the programme for Government contains a proposal to provide for Exchequer funding and I will consider this in the context of introducing amendments on Committee Stage. The framework being put in place has many similarities to that for the communications sector and other regulated sectors. It contains no new legal or regulatory principles and it does not attempt to break new legal ground.

The Bill sets out the high level regulatory principles for the sector and provides that the detail of the regulation will be the responsibility of ComReg, the Regulator of the postal sector. ComReg has a critical role to play in the overall development of the sector. It will be charged with ensuring the provision of the universal postal service, ensuring compliance by postal service providers with their obligations and will be required to review the designation of An Post. Currently, provision is made in the Bill for other postal service providers to be designated in regard to universal services after the seven-year designation has expired or for no designation to be made, as the case may be. The duration of An Post's designation is something I will also consider in the context of the programme for Government proposals.

As regards ComReg's role, I am confident that the many lessons learned in the regulation of the communications and postal sectors to date will be put to good use when regulating this new framework. A regulator, independent of postal service providers, is an explicit requirement of the directive and, where member states retain ownership or control of postal service providers, effective structural separation of regulatory functions from activities associated with ownership or control is also required. I understand that an issue that was aired during the debate on the legislation in the Seanad was a perception that there was a lack of accountability of ComReg to the Houses of the Oireachtas. I assure Deputies that the Communications Regulation Act 2002, which established ComReg as an independent statutory body to regulate and to take key decisions in regard to the electronic communications and postal sectors, also provides that ComReg is accountable to the Oireachtas on the performance of its duties. In addition, where it is necessary from a strategic perspective, the 2002 Act allows the Minister for Communications, Energy and Natural Resources to issue strategic policy directions to the regulator. We must keep under review whether these checks and balances are satisfactory and in the context of the programme for Government, I will give consideration to a role for the Minister for Communications, Energy and Natural Resources in the designation process. The Bill contains a basic provision to enable the State to establish a national postcode system.

I turn to the text of the Bill, as passed by the Seanad. A detailed explanatory memorandum on the Bill was published, and I will highlight the main provisions, including those agreed to on Committee Stage in the Seanad. The Bill is divided into three parts. Part 1 contains standard preliminary provisions and amendments to other enactments. The main part of the Bill, the regulation of postal services is set out in Part 2. This part addresses ComReg's role and powers, defines a universal postal service and provides for the designation of a universal postal service provider; price regulation; authorisation procedures and conditions; and the regulation of the terms and conditions around the provision of free postage to electoral candidates. It also addresses enforcement issues and offences with regard to postal services.

Part 3 enables the Minister for Communications, Energy and Natural Resources to establish, maintain and operate a national postcode system. This Bill shall, when enacted, be cited collectively with the Communications Regulation Acts 2002 to 2010 and these Acts shall be read together as one Act.

The intention is for this Bill to come into operation as soon as possible, with the exception as the case may be, of section 43, which relates to the referral of postal packets to the Revenue Commissioners, and is dependent on the progress of the draft customs Bill. Some key items of existing postal legislation have been updated by this Bill so that they are compatible with a liberalised market. Some of this legislation predates the founding of the State and repeals and revocations are provided for in Part 1.

Part 2 is the essence of the directive. ComReg is designated as the national regulatory authority for the purposes of the directive and its functions, objectives and powers as set out in the principal Act of 2002 are amended accordingly. ComReg is charged with ensuring the provision of the universal postal service, promoting competition and innovation, and ensuring compliance by postal service providers with their obligations. Part 2 addresses ComReg's enforcement and information gathering powers in respect of postal operators — mainly in Chapters 1, 2, 3, 9 and some of Chapter 10. It is important that the design of the enforcement element of the postal framework is proportionate. In this regard, the power to summon witnesses and examine them under oath, which represents a very strong enforcement option, is not appropriate for the postal sector at this time and consequently is now being removed. Similarly, I am confident that the powers available to ComReg such as the direction making powers, and those concerning information gathering, pricing and access will allow it to discharge its competition functions and therefore co-competition powers are not being extended to ComReg for the postal sector.

ComReg's enhanced powers will result in improved services and more choice for the consumer, safeguard the provision of the universal postal service and provide the regulatory certainty to encourage more players to enter the market. The individual consumer, the business sector and the wider economy will benefit from increased competition and a broader range of services, which is the ultimate aim of this important Bill.

The essential element of the universal postal service is the collection and delivery of mail to every home and premises in every corner of the State on every working day. This is enshrined in Chapter 3. Chapter 4 designates An Post as the universal postal service provider for a period of seven years. ComReg is to review this designation before the end of this period and may designate An Post again, or designate another postal service provider or decide that no such designation is required. ComReg is also required to ensure that the reasonable needs of users are met, and will specify by regulation the services to be provided by a universal postal service provider.

Chapter 4 also provides for oversight by ComReg of a universal postal service provider's terms and conditions. This replaces An Post's power to set out its terms and conditions in schemes under the Postal and Telecommunications Services Act 1983, the Act under which An Post was established, and is more appropriate for a liberalised and multi-operator market.

ComReg will also have a role in price regulation. In the interests of protecting consumers in those products or market segments where An Post, as the dominant postal service provider, is not likely to face competition at least in the immediate term, the Bill requires ComReg to impose a price cap, providing certainty to both An Post and its customers.

A central theme of the directive is the protection of the interests of users. In this regard, the Bill sets out in section 23 the tariff principles with which a universal postal service provider's services must comply, including affordability and cost orientation. Section 27 provides for the setting and monitoring by ComReg of quality of service targets for the designated universal postal service provider or providers, while section 37 provides that prior notice be given to users where a postal service provider intends withdrawing a postal service that is within the scope of the universal postal service. Section 38 requires every postal service provider to draw up and implement a code of practice dealing with complaints from postal service users. ComReg will be charged with resolving disputes that remain unresolved after the procedures in the code of practice have been followed.

The Bill sets out clearly in Chapter 6 the obligations with which postal service providers must comply — distinguishing, as the directive does, between postal service providers depending on whether they offer services within or outside the scope of the universal service. All postal service providers are required to register with ComReg and section 32 requires ComReg to publish guidelines to enable providers to declare whether the postal services they supply are within or outside the scope of universal service. This distinction is fundamental to the regulation of postal services.

Section 40 extends protection for whistleblowers who disclose appropriate information on the postal sector to ComReg. Chapters 7 and 8 set out a series of technical provisions associated with the provision of postal services, while Chapter 9 deals with enforcement issues. Chapter 9 also includes a new section, section 47, introduced on Committee Stage in the Seanad, which provides for an appeals mechanism allowing persons affected by decisions made by ComReg to appeal those decisions to the High Court. This provision is in addition to the right to judicial review.

Chapter 10 provides for offences, including offences relating to the opening of postal packets and mail bags, the sending of certain items by mail, the obstruction of a universal postal service provider, malicious interference with a post box and the secretion of postal packets. This chapter also includes a new section, section 49, which was introduced on Committee Stage in the Seanad. Section 49 enables the Minister for Communications, Energy and Natural Resources to issue directions to all postal service providers on the interception of postal packets carried by those postal service providers. This power had previously been confined to packets carried by An Post only. The Department of Justice and Law Reform has advised my Department that it is essential from a law enforcement and security perspective to ensure that all postal service providers in the market are subject to directions to comply with interception authorisations.

Chapter 11 amends the regulation of the provision of free postage to electoral candidates. Electoral candidates' entitlement to free postage under electoral legislation remains unaltered by the Bill. However, the provisions set out in chapter 11 reflect the fact that An Post will no longer make statutory schemes under which its terms and conditions are set, and in keeping with the spirit of the directive and liberalisation, provision is made for the Minister for Finance to designate An Post, or another postal service provider, to provide free election post.

Finally, Part 3 of the Bill provides that the Minister for Communications, Energy and Natural Resources may establish, maintain and operate a national postcodes system. In addition to the provisions I have just set out, I will bring forward a number of amendments to the Bill on Committee Stage. In the main, these amendments are of a technical nature and seek to clarify certain provisions in the Bill. I will also give consideration to the proposals in the programme for Government which relate to the Bill, which may result in more substantive amendments.

I look forward to hearing the views of Members on this important piece of legislation. I also look forward to the assistance of Members in facilitating the Bill's early passage into law as the transposition date for the 3rd Postal Services Directive has now passed. In the interests of providing certainty to all market players, enabling the development of fair competition and enhancing the protection of postal users, it is important that the most appropriate regulatory framework to oversee this newly liberalised and valuable market is put in place swiftly. I commend the Bill to the House.

I call Deputy Éamon Ó Cuív. I understand he is sharing time with Deputy Seán Fleming. Is that correct?

Le cead an Tí, ba mhaith liom mo chuid ama a roinnt leis an Teachta Seán Fleming.

Ba mhaith liom buíochas a ghabháil leis an Aire as ucht an cur síos cuimhsitheach a rinne sé ar an mBille. Glacaim leis nach bhfuil aon rogha ag an Aire ach an Bille seo a thabhairt isteach, ach is fiú dúinn an dia beag atá déanta ag an Eoraip de iomaíocht a phlé beagáinín sa Teach. Tá mé cinnte, lena chúlra i bPáirtí na n-Oibrithe, go mbeidh spéis ag an Aire ins an cheist seo a chíoradh agus a phlé.

I am delighted to have an opportunity to speak on the Bill. I accept that the Minister, no more than the previous Government, has no choice but to implement this EU directive, but it is important to reflect whether Europe has not made a little god out of competition as the resolution of all problems and the guarantee of top class services.

I do not necessarily think, particularly in an island such as ours that is on the periphery of Europe, that competition is the answer in all cases to quality services. It is interesting at this juncture to examine the impact the absolute fixation with competition has had on Europe. The banks are probably one of the best places to start because in setting up the euro it is interesting to consider the tight fiscal controls on states specified by the European Union. I refer to the 3% borrowing requirement. The EU did not specify any similar controls on the private sector because of the belief that the private sector would eventually regulate itself and control itself and that competition would provide the best service to the customer. We now know of course what competition did in that case. The excuse given by the likes of Rabobank, Allied Irish Banks and others for following Anglo Irish Bank in the property market was that competition and share price dictated that they had to follow in order to try to make competitive profits. I therefore think it is important to examine once again at a European level whether the structure it has put in place to govern competition is the appropriate model in all cases. I am not sure it is.

There is still a role for saying that certain essential services should not be open to competition, that the principle of universal service should be maintained and that it should not be subsidised by the taxpayer perennially. It is interesting to note the number of guarantees made in the Bill to ensure that in the event of cherry-picking by the private sector, which it will inevitably do, it must return its profits to the universal service provider so that it can provide a universal service. The Minister has given away that even he does not believe that because he said that he is now considering the possibility of including in the Bill the power to give Exchequer funding. In other words, no more than in the private health insurance market, the Minister is not sure that when push comes to shove the Government will be able to force private operators that will come into the market and no doubt be more than willing to provide services to big businesses in the city to hand over profits through ComReg to the universal service provider that must literally go from house to house in the most rural parts of the country.

It is important that we reflect on that point because I foresee what will emerge from the Bill is profit for the private sector in cherry-picked areas while the Exchequer funds services in rural parts of the country. What will happen over time is that there will be a campaign to say that it is no longer possible for the Exchequer to fund day to day services in rural areas. The Minister referred to the digital divide and the fact that those in more isolated areas could do with a two day or three day service or would have to pick up their own mail. That is the way I predict this will all play out in the next ten to 15 years. It is important that we look forward to see the inevitable path on which we are going to go.

Another interesting issue is the row-back already made by the Minister on the firm commitment in the programme for government that the universal service would be provided by An Post for 20 years. It is interesting to note that the Minister said:he would consider the commitment in the programme for government. We heard about the Treaty of Limerick. The ink was not dry on that particular treaty before it was broken. It seems to me from what the Minister said today that the programme for Government is a bit like the Treaty of Limerick — no sooner was it signed than the Government started rowing back on the very fine commitment it gave. I urge the Minister to honour the commitment given when he is considering the matter on Committee Stage and to ensure that the 20 year guarantee of a universal service to every house, every day of the working week will be guaranteed by An Post. If he does not do that, the credibility of the Government will be tarnished.

I was interested in what the Minister said about giving strategic directions to ComReg. I am sure that in his previous life as a Minister of State, the Minister felt many times that it was in the interest of the public to give direction to a semi-State body but he was told that he could not do that, he could not interfere. He would have been told that because the direction was not a strategic direction he could not give it. I suggest to the Minister that he might reflect on an amendment to the Bill and consider putting in a provision to the effect that the Minister can give any direction to ComReg that he sees fits subject to laying it before the Houses of the Oireachtas. While I believe one must have independent regulation, sometimes the regulators hide behind their independence and do not necessarily always act in the wider interest. There is no point in saying that the regulator must appear before a committee and give a great cur síos ar an obair a tá sé a dhéanadh, but that the Oireachtas does not have power to direct it if it believes that the service being provided and the competition being offered is not in the best interests of the people. Therefore, a direction would be useful, even if it was part of an armoury that would only be used in extreme circumstances. The Minister would retain that power subject to the relevant information being laid before the Oireachtas. Thus, there would be full transparency when a direction was given. Having that power would mean that if concerns were raised with ComReg by a Minister, the former would know that the Minister would have the power, in the extreme, to give a necessary direction in the public interest.

It is all fine to talk about independence, but we must consider every consequence. I understand the dilemma if the State, semi-State and private sectors are all mixed together and that there is a need for day-to-day independence. However, there is another element of independence that warrants considerable examination. Independence often means independence of the Oireachtas and the Government elected by the Oireachtas. This means people lose any control they may have over the actions of the bodies in question. That can often lead to frustration in the public mind. When something happens with which the public is not satisfied and about which it is absolutely mad and Members who are all elected to act on behalf of the people ask the Minister about it, they may hear a stock reply to the effect that he or she cannot give any direction on the matter because the body in question is totally independent of him or her. Having been a Minister, I understand this can be frustrating. We need to strike the correct balance. A direction, if given, must be transparent. All of the relevant bodies should be subject to the overwhelming will of the Oireachtas. I hope the Minister will consider this issue in more detail as the Bill passes through the House and suggest how he will ensure this measure does not take on a life of its own, thereby failing to achieve what people want and eliciting the response that he can do nothing about a matter because the regulator is independent.

I am interested in the issue of price mechanisms. I know there is a price cap, but this seems to represent the thin end of the wedge in respect of another major change that is to take place. I believe private companies will enter the market over time and cherry-pick all of the urban areas where they will offer very competitive rates and cherry-pick the easy business. They will undermine the cross-compensation we are used to in the postal service, whereby, irrespective of whether one posts a letter from Ballydehob to Malin Head or down the street within one's own village, the cost is the same. The private operators will provide very competitive services at very good prices in their designated areas. An Post which will have enjoyed cross-subsidisation in respect of a letter that travelled 100 yards and one that travelled 100 miles, will find itself losing money. Therefore, it will make the case that it should receive compensation because of the private companies. As I stated, my belief is that when it makes that case, the money will not be forthcoming. The case will have to be made to the Exchequer for funding for something that is now self-funding on a reasonable basis. I refer to the sending of a letter from one destination to another at a uniform cost. In time, the practice of posting a letter at standard costs to national and international destinations will disappear. It will be discovered that if one wants to post a letter to the far end of Ireland, it will be more expensive than if one wants to post it within urban areas. A system of universal service at a universal charge is being done away with subtly. I am not sure all these changes are for the good.

I am sure that the Minister, with his union background, will agree with me that there was a lot of sense to the idea behind a semi-State body providing a universal service, at a universal cost, that was vital to everybody in the country. We did see weaknesses in the system, however, and there was lazy management or management that was not innovative in some of the companies in question. However, others were incredibly successful. We also witnessed very restrictive labour practices, driven by unionised people who did considerable damage to the interests of the workers within certain semi-State bodies by refusing to modernise work practices quickly and move with the times. Given the Minister's background, I was very interested to hear him talk about the need to modernise. I agree with him in this regard. Reference was made to the need to use digital technology in conjunction with the physical letter which will always need to be delivered to houses, not only because of the digital divide but also because there are certain documents that can be posted more conveniently than sent by e-mail.

I do not agree with the European Union's view that the wholesale doing away with the approach we have had is necessarily good. The previous Government was very clear in its view that it had no intention whatsoever of selling off any of the basic State assets. I hear rumours about Coillte and I am totally opposed to selling it. I also hear rumours about the ESB. Any selling off of ESB Networks would be utterly disastrous for the country. I refer again to the idea of a universal service.

I understand it is intended to introduce postcodes. "Postcodes" may be the wrong word. Postcodes, be they for one's satnav or another purpose, would provide a unique identifier of every location or address in the country. For millions of reasons, this is a very good idea and should have been introduced years ago. An Post is one of the groups which need postcodes least because it already has a very efficient system of sorting the post. However, having a unique address in my part of the world would not be too bad because certain letters would not arrive at their proper destinations if the sender did not distinguish between recipients' names such as Páraic Micil Mac Donnchadha and Páraic Tomás Mac Donnchadha. If there were a unique code, it would make sense.

When this issue was being discussed by the previous Government, the concept of an alphanumeric code was raised. That gave rise to a further issue, namely, that if one were using the alphabetical part of the code, the letters in the code, one would have to ask whether the code should begin with a letter corresponding to the placename or whether there should be no easily discernible relationship between the code and the place. One could use the letter "G" for both Galway and Gaillimh without difficulty because they begin with that letter in the two official languages of the State. However, a difficulty would arise with other locations in that one would have to determine whether the alphabetical part of the code for Dublin should be "D" or "BAC", the latter being derived from Baile Átha Cliath. If one were to opt for an alphanumeric coding system that would make locations decipherable, there would be a dispute between those who believed the first official language of the State should be the basis of the code, those who believed the second official language should be its basis and those who believed it should be the choice of the user to use either language in the code. We saw this occur in respect of car registrations. I, therefore, ask the Minister to reflect very carefully on the issue. The former Minister for Communications, Energy and Natural Resources, Mr. Eamon Ryan, received delegations on the matter.

The easy answer to the problem is not to use an alphanumeric code that relates in any way to the postal destination. I can never make out postal destinations from the codes used in Northern Ireland. I do not know if there is a relationship in the codes between places and letters.

However, if the first official language were chosen no doubt one would receive 100 arguments from public servants as to why it was not practical, although for the life of me I do not know why one would state it would not be practical. When I write letters to England I just write the alphanumeric code but it does not tell me to where I am writing; I never see the connection between the code and the place in London or Manchester to which I am writing. I just write the numbers and letters. This matter could be forestalled by a little bit of careful consideration. Will the Minister consider this issue carefully as I believe that a potential row could be forestalled by using a purely numeric code or an alphanumeric code that does not try to identify the area? My preference would be to use the first official language since I do not think it makes much difference. If the number for a house in Dublin was 5268BAC I do not think it would make any difference if one did not know from where the "BAC" came originally. It has never caused me any difficulties in writing to British addresses that I do not know how they derived the code; I merely copy the code.

I thank Deputy Ó Cuív for sharing time and look forward to speaking on the Communications Regulation (Postal Services) Bill 2010. I was very intrigued by the final part of Deputy Ó Cuív's commentary on whether the alphanumeric part of the code should be in Irish or English. I have not even thought about that but I suggest — perhaps it is the accountant in me coming out — that it be kept strictly numerical. People know the telephone code for their part of the country, whether it is 01 or 057. In my area, 05787 is south Laois and 05786 is north Laois. In Cork, the code is 02, and 06 and 07 are used elsewhere. I will leave aside the mobile phone network. When a numeric code becomes established, as the phone codes have done, in time people get the gist of which code represents what part of the country. I would leave out letters and keep it simple.

I was looking forward to speaking on this legislation prior to the general election being called because I had many reservations about the Bill as originally produced by the previous Government. At the time, I and several other Fianna Fáil backbenchers spoke with the then Minister, Eamon Ryan, about flaws we saw in the legislation and we asked him to take on board our comments on Second and Committee Stages. To be honest, I do not think the man understood the first thing about what we discussed. If there is one good side-effect from the change of government, it is that Eamon Ryan will not pilot this through the House, because he did not understand the rural postal system, about which most of us spoke to him. He was debating rural post offices. His mind was not where the legislation was and that is all I have to say. I am pleased the election intervened and that we will have more time to make an input. I was concerned the legislation was going to be rushed through prior to the election.

At this early stage, I commend some of the proposals made by the Minister. When we were in government, we listened to workers at An Post and members of the Communication Workers Union. The agreement to designate An Post for a 20 year period offers more certainty to An Post as does the provision of Exchequer funding. The possibility of ministerial approval for ComReg to designate a universal service charge is to be welcomed. I would prefer if the Minister would go further on this but I welcome the direction in which he is going.

There has been much discussion about the role of quangos. ComReg is an independent quango and this is enabling legislation to transfer powers from the Department and the Minister to a new enlarged quango, ComReg. Inevitably, when ComReg takes on this area it will require more power, staff, resources, functions, authority and independence. The more we strengthen the role of quangos, the more we take power from those who elect the Government and hand it over to what we call "independent bodies". We will lose democratic control. We do not want political interference in these matters but the idea of the Oireachtas divesting itself of power to give greater powers to either a new quango or to beef up an existing quango needs to be considered because it is not very good. We are passing enabling legislation to give power to ComReg to do whatever it chooses. When dealing with an independent State organisation, one depends on the character, philosophy and ethos of the chief executive. One will be dependent on whether he or she believes in competition.

I am pleased there will be an appeals mechanism against ComReg through the courts. However, this will be very expensive for a new entrant to the field. We must bear in mind that ComReg will be funded by the State and will have limitless resources. Even if a Government body knows it is wrong, it will appeal a case to the highest court so it can state that it did so. This is how the public service works.

It is important that everyone recognises we are discussing the posting of normal envelopes. Parcel post has been dealt with separately and the market is working well. I am concerned about the idea that people will have to pay An Post for the use of its services. It will become like the VHI; we will end up doing to An Post what happened to the VHI, which is a bankrupt organisation which needs subsidies from its competitors. However these subsidies are not enough and it needs further levies from the private insurance market and the Government is examining the situation because it knows it is not tenable.

What is happening to the Royal Mail will also happen to An Post, whereby it is stated this element of competition almost bankrupted it. Under this Bill, An Post will be obliged to provide a daily service and this is very important and we agree with it. However, this is the most expensive part of the system as it involves putting someone in a van to deliver post to 100 houses every day. This is highly expensive and it could cost up to a couple of euro to deliver letters to remote areas. If this legislation is introduced, An Post will be caught with this element as other providers will cherry pick. People argue cherry picking will not happen, but the purpose of the legislation is to allow private competition. If it was not going to be this way the private sector would not seek the business. This will cause a problem for An Post. Where will the private sector intervene in the postal service? It will not want to make local deliveries in rural areas. It will want to sort at national level but bypass An Post's regional mail centres and make the very expensive end of delivery at local level compulsory for An Post. This will cause a big argument about how much the local postman should be paid to make the delivery.

I am very concerned for areas such as Portlaoise which has one of the largest mail centres outside Dublin with approximately 400 staff. Major investment has been made there and it is the most efficient part of the system. However, this will be undermined because the private sector will be able to bypass regional mail centres and local sorting offices and go straight to the postman who will be obliged to deliver the letters regardless of whether An Post thinks a fair price has been paid. This will be decided by the communications regulator. This approach has almost bankrupted the Royal Mail and it is happening here also. There will be cherry picking.

If a cap is placed on the price of a stamp or franked mail, a levy will be introduced and we will be told it is not an increase in the postal price but a levy to pay for the universal delivery charge. It will be like the ESB bill, which shows extra levies and one is told they do not represent an ESB price increase. There was a time when one received an ESB bill with only one price for usage but now it contains approximately six charges which one is told are not ESB charges. However, they are costs to be borne by the individual. What powers will the Minister retain to ensure the universal service delivery will be protected without bankrupting An Post? I advise the members of the Labour Party that this is a significant step on the road to the ultimate privatisation of An Post. People may choose that but, in my view, the mad rush to privatisation of every service in the country is not necessarily the best way. This Bill is a significant step on the road towards privatisation. The parcel service is in the main used by the commercial and retail sectors as most people nowadays receive very few parcels to their homes. However, they need to receive a daily letter post and once this system is undermined, An Post will be in a difficult position, the State will not wish to subvent it and it will end hiving off some of its activities, and this will be another step towards ultimate privatisation.

I am pleased the Minister has said he will table amendments on Committee Stage which can then be teased out. We will be seeking to table some additional amendments. However, I acknowledge that some of the measures he has proposed will be an improvement which we did not get around to before the general election because time did not allow that legislation to be dealt with. It is good we decided to postpone the Bill. The Minister has said the EU deadline has already passed but I do not think a few extra weeks for the passage of the Bill through the House will be a problem. The sky will not fall in. We will want to see the Commissioner for Communications Regulation coming before the committee to discuss some of the regulations he intends making. His perspective is to see the market working and the needs of the customer might come second. He spends his time dealing with the business and commercial market and with those who want to cherry-pick An Post. He will not be meeting the consumers, the users of the service. I suggest ComReg should set up a postal service users' council on the lines of RTE's system for regularly checking with viewers to obtain feedback on programmes. An Post carries out its own surveys and it says that delivery levels are 95% when letters are correctly addressed. In my view, there is a case for a consumer council to provide an informal input. I look forward to discussing this legislation in further detail on Committee Stage.

I wish to share time with Deputy Seán Crowe.

Unlike Fine Gael, Labour and Fianna Fáil, Sinn Féin opposed the postal directive in the European Parliament and we are opposing this consequential Bill. The reason we opposed it in the European Parliament is that it clearly sets the agenda not only for liberalising the postal services, but for breaking them up and selling them off. Prior to the election, Sinn Féin opposed this Bill which was supported at that time by the then Opposition parties, Fine Gael and the Labour Party and also by Fianna Fáil. The former Minister, Deputy Éamon Ó Cuív, made valid points in his contribution, yet when he was on the other side of the House he was prepared to push the Bill through. I acknowledge he spoke very well about the consequences of the Bill, such as cherry-picking, and his arguments were quite good, yet, when he was a Minister, he was prepared to support it. I do not understand how a person can change his position overnight, like switching off a light.

Defenders of the directive claim that it can provide protection of the universal service obligation. However, in reality, that is not the case and the proof of this can already be seen in other EU states which have legislated to put the directive into domestic law. As I said when I spoke on this Bill in the previous Dáil, this is a charter for the breaking up and the ultimate privatisation of postal services throughout the EU.

When the former Labour Government in Britain first proposed the introduction of measures to put into effect the provisions of the directive, it claimed that it would actually protect against privatisation and would maintain existing levels of services. In fact, Labour had already decided to sell off 30% of Royal Mail. Of course that has not prevented Labour, now in opposition, claiming that it is opposed to privatisation. This is hypocrisy. What Labour in Britain did when in government and what it now says in opposition is very similar to what I hear in this House today. The legislation introduced by its successors in the Conservative-Liberal Democrat coalition to put in place the directive also contains provision to privatise postal services and clauses which will allow postal providers to opt out of the universal service obligation.

It is clear that those who are claiming that this Bill will protect An Post are being less than honest. The provisions of the Bill provide scope down the road for a radical dismantling and selling off of An Post and the doing away with the obligation to provide a universal service.

This Bill is a charter for cherry-picking, the process whereby market entrants provide services solely or mainly in the lucrative end of the market leaving the existing operator with most or all of the loss-making end. In postal terms we can expect the private operators to be interested in Dublin and Cork, leaving rural Ireland to the State provider. This will make the provision of rural postal services non-viable without significant price hikes or taxpayer subsidies. Cherry-picking is not a possible outcome of this proposed liberalised market; it is a certain outcome.

The Ecorys 2005 report on the development of competition in the European postal sector predicts that private providers in Ireland will seek to operate in niche markets and in certain geographical areas. In the new market, rather than establishing any genuine competition with An Post, the private companies will simply take the easy profits. This will remove the revenue streams that are necessary for An Post to cross-subsidise the price of deliveries to rural homes. As a competing business, An Post will be left with three options, which are to hike the price of stamps exorbitantly in rural post offices, to seek Exchequer funding support or to sell off key parts of the business. This seems inevitable but I hope I am proven wrong.

The so-called "sharing mechanism", contained in the Bill, is a non-runner. The Bill provides that ComReg may at an unspecified time come up with some sort of mechanism to have the new private operators compensate An Post for the burden of their universal service obligation. This reminds me of risk equalisation and the health insurance market that was liberalised in the not too distant past and we all know how that ended. The compensatory transfers necessary to ensure community rating were successfully challenged by the new insurance entrants and the cherry-picking that ensued has contributed to phenomenal price hikes like those announced recently the VHI. This is what will happen in this case. Likewise, the private postal companies will challenge the proposed sharing mechanism as a barrier under EU competition law, resulting in the inevitable outcome.

A 2006 PricewaterhouseCoopers report for the European Commission found that the member states with a more liberalised postal market for longer would be well placed to exploit the opening of postal markets elsewhere. The Ecorys report concluded that the degree of liberalisation in Germany and the UK is significantly more advanced than that of Ireland. This Government is hell-bent on handing over Irish taxes to private companies from the bigger EU players. This has to stop; we simply cannot afford it and once again, there is no benefit for the people, in particular for those living in rural Ireland.

The decision to liberalise the postal market is a purely ideological one. It is based solely on the myth, now entirely busted by the banking sector, that private businesses can do everything better, even when all the evidence points otherwise. The liberalisation of postal markets across Europe has resulted in job losses, price hikes and the scaling back of universal obligations.

The Bill gives significant powers to ComReg, but the objectives and functions are more akin to that of the Competition Authority than what would be required of a regulator entrusted to ensure that the people have equal access to the post regardless of where they live, that the highly sensitive and personal data of the citizenry is protected to the highest standard and that systemically vital functions from business communications to dole cheques are delivered with minimum disruption. It is difficult to see how ComReg can prioritise those vital issues when its priority job will be to develop competition, which is a total contradiction. This reminds me of the Commission for Energy Regulation which at a time of increasing energy poverty refused to let the ESB reduce its prices despite its willingness to do so — all in the name of competition. That is what An Post customers have to look forward to.

Another aspect, particularly for rural people, is the social consequences of what the Bill proposes. Probably the only social contact people living in isolated areas, particularly theelderly, those with disabilities and those with no transport, have outside their own homes is with the local postman. The services provided go way beyond their duties. I know postmen and postwomen who actually deliver groceries to people who live in isolated areas. They provide a fantastic service considerably beyond the call of their duty.

The only way to guarantee the universal service obligation is to reject this Bill and to reject the EU directive. The danger of privatisation has significantly increased since the adoption of the IMF-EU austerity programme. The memorandum of understanding that underpins the programme contains a clear statement of intent with regard to the selling off of State companies. The Government has already committed itself to selling off €2 billion in State assets. It claims that these will be non-strategic assets but that means very little. The only assets that private companies will be interested in buying will be profitable ones. In the case of An Post that will mean that when the company is divided up and if it is put up for sale, obviously private operators will want to buy those parts that are profitable, which will mean the off-loading and-or running down of non-profitable parts, including rural postal deliveries.

The Government has also indicated that in its assessment of which State companies or parts of State companies are to be sold off it will be guided by the report of the review group on State assets and liabilities which was chaired by Professor Colm McCarthy. That report seems to have been delayed for some reason with one suggestion that this related to the downgrading of the Bord Gáis debt rating. Clearly, therefore, the report has closely examined the financial state of State companies with a view to how and when they might be sold off. As An Post is one of the State companies that has been subject to the review, it will be interesting to see what Professor McCarthy has to recommend on it. Going by his an bord snip nua report, we may expect that this report will take a similar right-wing view on the State sector.

As I have said before and as I have requested in questions to the Minister for Finance, it is vital that the report is made publically available as soon as it is received by the Government and that we have a full debate here and engage with the workers representatives in those companies likely to be affected on its findings and recommendations before they are acted upon. Given Labour's relationship with the trade union movement, it is incumbent on Labour Ministers and Deputies to ensure that they involve the trade union representatives in any decision-making process on the proposals before us.

Given that An Post is one of the companies subject to the review by the McCarthy report, it is possible that we are debating this Bill without knowing the full picture. It is possible that this legislation if passed might be over ridden by the report if it recommends, as it might very well do, breaking up and selling An Post. That is something Deputies on all sides need to bear in mind as we debate this Bill and I would particularly ask that Members of the Labour Party do so given their commitments to the postal workers that they would protect jobs and services. Deputy Spring from my constituency is in the House. During the general election campaign in our constituency, postal workers trade union representatives lobbied all candidates in this regard. I made absolute commitments to stand by their position. I understand that other Deputies made similar commitments. It will be interesting to see how they vote on the Bill.

If I have any time left over, maybe I could share it with the Technical Group? Do I have 15 minutes? Can I do that?

There are 20 minutes left. Yes, that is grand.

If the Acting Chairman does not mind, I can pass it on.

I take the opportunity to congratulate my constituency colleagues, an tAire nua, Deputy Rabbitte. I wish him all the best in the new job. There is a shadow hanging over this Bill based on what we know from Government statements and the programme for Government of the plan to sell off non-strategic assets. The big question is whether An Post is a strategic or a non-strategic asset. The reply to that question will impact on the Bill's proposals supposedly to copper-fasten postal services.

Deputy Martin Ferris spoke about the strategic role An Post has in society, particularly in rural areas. He spoke about the importance of the postman or postwoman calling on someone's house occasionally being the difference between life and death situations. In some cases the first person to find out that a person has died is the postman discovering that the letters have not been collected, which alerts them to the problem in that household.

In this electronic era, An Post has a key role in postal delivery for personal and business purposes. In my constituency there has been concern over unread X-rays and the role of doctors sending their letters to the consultants at the hospital. Patients going to the hospital are normally given notification and those depending on the letter will sometimes get a text message, etc. The same applies to basic things like bank statements and so on. A number of years ago there was a strike which caused a crisis not only in people's personal lives, but also in the commercial life of the country. I know of a number of firms that hired private couriers to deliver letters and invoices. The postal service plays a key role and is one that many of us take for granted.

The key aspect of this Bill is the liberalisation of the market and introducing so-called competition. Deputy Martin Ferris spoke about the so-called liberalisation of energy and the effect it had, which was not positive for consumers. They are the ones who are paying for this nonsense of so-called liberalisation. I often wonder if the drafters of this European regulation are the same ones who wanted the straight bananas. The object of this Bill is supposedly to liberalise the postal service. In effect, its claims to protect the universal service obligation is not worth the paper upon which it is written, nor is the claim that the EU directive will protect it for ever. If we need proof of that, we need only look at what is happening in Britain.

When similar legislation to give effect to the EU directive was published, assurances were given that six day delivery and collection would be copperfastened and now as the Government there is preparing to privatise Royal Mail it has emerged that the provision of services will all be dependent on profit margins. That will mean if a postal company can prove that it is losing money it will be able to downgrade its services and only operate profitable ones.

The defenders of the Bill claim that the universal service obligation is copperfastened. If one reads the Bill, one will find that it makes clear that it will be reviewed by ComReg before the seven year period under which An Post is designated. It is being sold to unions and workers on the basis that it will copperfasten the universal service obligation and their jobs. The same section also provides for the designation of companies other than An Post as a universal provider but, more importantly, contains a clause under which the obligation can be removed altogether.

There are currently no plans to privatise An Post as a whole, we are told, but this Bill and the whole tenor of EU liberalisation of postal and other public services will inevitably lead not only to the breaking up of An Post and postal services but the cherry picking and selling off of its most profitable parts. That is what has happened in other countries and there is no reason it will not happen here.

My fear is that privatisation of State assets will be part of the IMF EU bailout for the banks. The review group on State assets, chaired by Mr. Colm McCarthy, has already made clear its support for privatisation. Its report is due to be presented soon. It will be interesting to see what he recommends and how the Government will respond to the recommendations. The key question on this Bill is whether the postal service is a key asset and whether it will be sold off.

It will be interesting to see what the report has to say about Coillte and other successful State companies which are prime targets for the privateers, especially those with an inside track who have clearly been eyeing up the juicy bits of the companies long before most of us were even aware that the sale of State assets was coming down the tracks. The former Minister for Finance, Deputy Lenihan, and his successor, the Minister, Deputy Noonan, have said in replies to questions on the report that they will be guided in their decision on any sale by its recommendations.

It is clear that the privatisation of State assets has been discussed as part of the bank bailout. The Government is on the record as saying it will do it and it has already discussed it with EU and IMF officials. The former Minister, Deputy Lenihan, when asked about this before the election stated that the Government will consult the Commission on the results of the assessment with a view to setting appropriate targets for possible privatisation of State assets. It appears that the new Government is following the same track and there is no real change. There may be slight changes in presentation but the reality is that it is committed to selling off many State assets.

The IMF and EU will no doubt take a hands-on approach to this matter. It is also a reality that the current Government has accepted all of the parameters of the terms of the bailout as laid down in the memorandum of understanding signed by its predecessors. In the current climate I would like to see much harder guarantees that An Post will not be asset stripped, that the people of this State will not be left with a poorer and more expensive service and that rural communities will not be left in a situation where postal collection and deliveries do not take place six days a week.

If such guarantees are not built into this Bill by way of amendment then Sinn Féin will vote against it. We will do so to protect the jobs of postal workers and the excellent service which An Post currently provides throughout this State. We will also oppose the Bill because we do not believe profitable public companies which have been built up over generations should be stripped down, torn apart and sold off to private profiteers.

We do not support selling off any State company to comply with the terms of an IMF EU bailout for bankers and speculators, some of whom, no doubt, will join the former Taoiseach Mr. Bertie Ahern in companies ready to move in for the kill if and when they are sold off. It is clear that this Bill, as it stands, does not serve to protect our postal services. It is also clear that it lays the basis to break up An Post and to sell off profitable parts of the company to private companies. Unless this Bill is radically amended to guard against this we will vote against it.

Before I call Deputy Flanagan, Deputy Crowe should note that I cannot rearrange the time in the middle of a debate. Whatever time Deputy Crowe has left will be available at the end of the debate.

I was trying to be nice.

I wish to share time with Deputies Daly and Pringle.

I am very concerned that this Bill, which is being introduced as a result of EU Directive 2008/6 on the full accomplishment of the internal market of community postal services, will seriously damage An Post's viability at a time of falling letter volumes and its continued obligation to provide loss-making services. The provision of postal services has been historically based upon a universal service obligation which legally obliged An Post, in our case, to deliver and collect mail for the same price regardless of location.

The same price goes anywhere principle was supported by a monopoly or reserved area whereby An Post was the only operator who could carry and deliver mail below a certain weight limit, which in recent times was below 55 g. This enabled An Post to cross-subsidise utilising profitable urban groups to carry the burden of loss-making rural routes. In simple terms, a letter posted in the GPO for 55 cent and delivered in Ballsbridge makes money but a letter posted in the GPO and delivered to Trean or Ballinamore loses money.

On the universal service obligation, its funding in a liberalised market is a major issue which has not been resolved anywhere. The Bill suggests a compensation fund into which licensed operators would pay to fund the universal service obligation. It has not worked in any other country and will not work here. The programme for Government includes an option for State aid in a worst-case scenario, which is welcome. However, the Bill should be framed to ensure An Post is supported in continuing to provide the universal service obligation from its own resources, supported by a viable market share.

Cherry picking or cream skimming occurs when competitors enter the market and undercut An Post unprofitable routes. Competitors will not compete on loss-making services but An Post will still have the universal service obligation. If it loses market share on profitable routes it can cross-subsidise and will in a short time go bust. The only way to open up the market and fund the universal service obligation is to impose the same obligation on all operators to deliver everywhere at the same price as An Post does. This is what has happened in Finland. The Bill facilitates cherry picking, unfortunately, and I must oppose it otherwise An Post will not be able to compete.

Downstream access happens when competitors compete for customer postings at a lower rate than An Post and then insert them into An Post's network for delivery. The downside is that An Post could end up receiving mail at delivery office level, having lost the postage, and be forced to deliver it at a loss. An Post has invested in excess of €40 million in four mail centres around the country which will be redundant if downstream access is allowed below a certain level. In the UK the Royal Mail is losing money because it is delivering mail for competitors at a rate set by the regulator which does not cover the cost of delivery. This Bill facilitates downstream access. The Bill must prevent it below automated mail centre level, otherwise the investment will be redundant.

The Bill gives ComReg unfettered powers to decide on almost every matter to do with the mail business, regardless of the social implications. Experience elsewhere shows that regulators have facilitated competition by curbing the previous monopoly providers' share by allowing cherry picking, downstream access and price caps. The UK example shows that regulatory policy has been a contributory factor in the precarious position of Royal Mail and the British Government is currently considering how to address this. The legislation should ensure that the regulator is answerable to the Minister and the Oireachtas on key matters, such as the USO which has national implications.

On employment issues, liberalisation in Germany has resulted in the loss of 21,000 full-time and 12,000 part-time jobs in Deutsche Post, with competitor company employees being eligible for social welfare support. In Holland, full-time jobs have been reduced from 40,000 to 24,000.

The recycle 16 directive permits member states to provide for social considerations to be included in the legislation. The legislation should include recycle 16 to protect employment standards. An Post employs almost 10,000 right across the country. By any standards, it is a major employer in every city, town and village in the State. Its commitment to rural areas is commendable. In fact, it is soon opening a brand new sorting office in my home town of Castlerea. That vote of confidence in the community deserves our support in shaping this Bill so that the national postal service continues to provide a good service and good employment.

I am disappointed by the lack of rural TDs in here today to fight for and discuss this issue. If we go ahead with what is planned here, ten years down the line those same TDs will be telling their constituents that they are only getting post on two days in the area because they had no choice. They have a choice to fight it here and now, but where are they? They are gone, at a funeral maybe. What are they doing?

The most telling statement made here today on anything was made by Deputy Ó Cuív. He stated, in this regard, that he accepts we have no choice. I say his grandfather would be turning in his grave after fighting for Irish freedom to hear that his party, along with all the other main political parties, seems to accept that we have no choice. It was the same with the turf-cutting ban. Apparently, we have no choice. When it comes to Europe we swallow everything — hook, line and sinker. Other European countries take what is good for them and argue about and stop what is happening that is bad for them.

Earlier it was mentioned by a Sinn Féin Deputy that An Post provides more than just a service which delivers the mail. My uncle worked in An Post for 50 years and my aunt worked there for 49 years, and I can tell the Minister that they provided more of a service than merely delivering post and handing out stamps. On many occasions they provided the only bit of company that anyone would have had for possibly a week. They saw situations where a cheque should not be delivered on a certain day because a certain partner might have been drinking too much and held it back for a couple of days until, maybe, the wife or husband was there alone — not something that is in the job remit. I can guarantee that when the company is privatised down the line, if the Government gets away with this, none of those services will be provided by staff. It will be rush in, rush out or, possibly, put it in a box at the end of the road and down the line there will be a newspaper headline stating, "Old person found dead — undiscovered for five days because no-one called around". I am not saying that should be the job of a postman or postwoman but in a world where one looks at matters a little more holistically, it is a good idea that he or she would do that.

From what Deputy Ó Cuív stated, obviously, Ireland is no longer independent, Ireland is finished as a State and we must accept this. Apologies to Deputy Ó Cuív, but I am on his grandad's side on this one. I believe we have a choice if we fight for a choice and for our right to make our own decisions. The last time I looked at my passport I was an Irish citizen, not a European citizen first. I will always be an Irish citizen first. I have stated here previously that I have lived in many European countries and I am not against Europe. I have no problem with the European people. In fact, I have great time for them because if they had this sort of stuff put before them or stuff such as the ban on turf-cutting, they would fight and win on it. It is a shame we do not have enough Members in here who are willing to fight it.

It is a shame we do not have enough Members in here. There were more members in front of me in Roscommon County Council. I do not get it. Is there no quorum required here? It is ridiculous.

They are listening to the Deputy on the monitor. They are enthralled by the Deputy.

They could watch it on their monitor at home as well and save us the expenses.

This is the final phase of the opening up of the postal service to market competition. It is quite clear that the agenda here is to allow the private companies enter the market and provide services which previously were exclusively the remit of An Post. What is wrong with An Post providing that service on its own? What potential benefit is there if, on Monday, a postman comes into the area in an An Post uniform and the same day, or the next, one is there in a TNT uniform? What possible benefit is it to the recipient of the service? There is none. This is about a prize and getting a piece of the pie for the private companies operating out there. Some excellent points have been made in that regard already.

The crass opportunism of Fianna Fáil and the points made by Deputy Ó Cuív were unbelievable, that not everything should be privatised and some matters are natural monopolies. These points are valid, but coming from the mouth of a Minister in the previous Government, given the litany of privatisation, etc., it showed brass neck and some cheek.

However, the points he made were valid and paint a picture of what will happen to An Post. We need not look too far. We can look at the position in the Minister, Deputy Rabbitte's constituency in terms of refuse collection, which example is similar in many ways. Here one had a public service on which a price was put, it was commodified, the private operators came in, employed their workers on lower terms and conditions and undermined the local authority's service. There arose the ludicrous situation where there were three or four different bin trucks in the area on the same days. The private operators undercut the local authority and the position today is that the local authority is driven out of that market and bin workers have been faced with a reduction of €200 in their weekly pay while those in the communities have no guarantee that the waiver will remain. No doubt the private companies will increase the prices and leave a private monopoly at the end of it. It is quite clear that the agenda of all privatisation and liberalisation are a serious attack on the pay and conditions of the workers and lead to a worsening in the service to the public.

The idea, as has been raised previously, that the universal social guarantee somehow means that the service will be maintained simply does not stand up to scrutiny. We know that it does not when we look at the experience of other countries. In fact, one could say that moves in that direction have already resulted in serious attacks on jobs and a worsening of services in Ireland. Traditionally, An Post has employed a significant number of people — thousands upon thousands of workers — but that number has been reduced over the past decade. The company is looking for another 1,200 jobs to go. Against the backdrop of the present economic situation, that is lunacy.

We have already seen decisions being made which have resulted in a worsening of the service to people in the areas. Even in my area, in Dublin, we have seen parcel collections centralised in an area of Balbriggan which means a pensioner or an unemployed person living in Lusk, Ballyboughal, Garristown or Rush who does not have a car and is not at home when the parcel calls, must find the means of driving miles away to Balbriggan to collect it. That is the scenario that is opening up. If that is the case in Dublin, as other Deputies have stated, the problems will be magnified in rural areas. Let us be clear here. This will not assist the recipients of postal service and it will not help the workers in An Post. Who will win out in this situation and what is the real agenda?

In 2007, the EU postal service was worth €94 billion. That is a massive industry in anybody's books. What we have seen, by liberalising the market, is the private companies being given a slice of the pie. That is the name of the game. Their purpose is not to enter the market because they are worried that companies such as Deutsche Post or An Post might not be doing a good enough job for some Granny living up a mountain in a rural area, but to make a profit. Inevitably, this will lead to a reduction in services and pressure on wages and conditions for the workforce in the drive to extract more profit. It is clear from contributions made by Members that nobody believes these companies will be concerned about the social element of their role. It is inevitable they will cherry pick and that will leave the social obligations with An Post, with serious consequences for many rural communities. The attitude of the private companies was summed up very well by Nick Wells, the chief executive officer of TNT Post in the UK. When the British postal services were liberalised, he said "...us handling your granny's postcard is unlikely". That will happen here.

Let us look briefly at the experience of other countries which have gone further in the liberalisation process than we have. There are 1.44 million postal workers employed across the European Union, but not one of the private companies that operates across Europe pays wages anywhere near what state companies provided. The unions that have conducted surveys suggest they pay approximately 20% less on average. In the Netherlands, where the service has already been fully liberalised, workers in many of the private companies do not get a salary or wage. Their contract is operated on the basis of piece work and if they go out to work in the morning but none of the people on their route are in, they do not get paid. They must keep going back and are only paid on the basis of delivery. That is how the company competing with the state companies operates and as a result workers in the state company are being told they must take a 25% reduction in their wages. It is a race to the bottom we are experiencing throughout Europe. In Belgium, the numbers employed in the postal service have gone down from 43,000 to 35,000 and the new contracts are fixed term. In Germany, TNT provides fixed term contracts which offer 60% less than what the state company pays, with the result that many of those workers must rely on the state for social welfare to make up a decent wage. We have seen another side of the process of liberalisation where over the past ten years of the process throughout Europe, some 10,000 postal outlets have closed. The serious social consequences of that, particularly in rural areas, have already been well articulated.

It is not the experience, nor is it true, that the universal social service guarantee will be maintained. That is not the case. In reality, the private companies will concentrate on the profitable business and leave the loss making business to An Post. As a result the State will lose money and there will be a drain on resources. Finland is a good example of what happens. It had a state postal service which was making a profit of between €30 million and €80 million but has ended up paying a private company €150 million to deliver a service. It has lost the profits of the state company and has to pay an extra €150 million in order to have a rural service provided. The owners of the private company are the only winners in that situation. It is clear the process of liberalisation has gone ahead significantly throughout Europe, but the trade union movement across Europe has a responsibility in this regard. There was not a sufficient fight early on in the battle, but it is not too late to fight against it. The unions have an onus and responsibility to mobilise their members against the threat to their wages and conditions and to the service provided by their companies.

Government parties in Europe, ably assisted by Fianna Fáil, have set the scene for the Bill. They have already supported it in Europe and have allowed it to come here. The Bill before us is only a continuation of the betrayal the Government's representatives started in the European Parliament. However, we can make a stand on it and stop it happening here. We should register for the record that if the Bill proceeds, An Post will be shackled with the loss making sections of the service, while the private companies will take the spoils. As a result of that decision, the viability of An Post and the future of the thousands of workers who depend on it for their livelihoods will be seriously undermined, as will that of their families and those in the community. We must continue to oppose this. If it proceeds and if in the future people bemoan the loss of the jobs and the service, the blame will return here. Therefore, it is better we make a stand on the issue now and that we fight for our historic and necessary service for the people.

The Communications Regulation (Postal Services) Bill provides for the final liberalisation of the Irish postal market. This in effect means the privatisation of the market. Liberalisation is euro speak for privatisation. Members will remember the sell-off of Eircom that took place a number of years ago, where ordinary Irish people were conned into buying shares, believing in the neo-liberal dream that they too could share in capitalist wealth generation. This Bill provides for a similar break up and sell-off of a semi-State company.

I was amazed to hear the Minister state in his contribution earlier that An Post has greater problems than the liberalisation of the market due to the impact of electronic mail and such like. I find it amazing that a Labour Party Minister would speak in that manner. An Post has performed well and performs without State intervention currently. The greatest threat faced by An Post is this Bill and the so-called liberalisation or privatisation of the market.

An Post does not receive any subvention from the State and meets all its costs from its revenues. Therefore it is not a burden on taxpayers. However, the enactment of this Bill will be the death knell of a national asset. Every Member would agree that a postal service is in the interests of the people and a public postal service is a vital national asset that should remain part of the strategic interests of the State. Interestingly, the US, the bastion of free market capitalism, has protected its postal service, recognising that it is not in the interests of the people to break up the postal service. In other European countries, the postal service has already been privatised with massive job losses. In Germany between 2006 and 2009, some 33,000 jobs were lost in the former state run operator. In the Netherlands employment has dropped from 40,000 to 24,000. The changes that have taken place in the contracts of the remaining workers in the postal service there have already been highlighted.

It is estimated that privatisation here will lead to the loss of over 10,000 jobs in An Post. This will happen, because private operators will cherry pick the routes and services they want to provide. I am reminded of a discussion I had a number of years ago with a public servant from the Department of Finance on the question of public private partnerships in the water services and road building areas. When I put it to him that the private operators would cherry pick the contracts that led to the biggest profit for them, his response was that if one wanted to make a cherry salad, one had to pick cherries. That is what the private operators will do in the market once it is liberalised.

In rural Ireland, and particularly in Donegal, the postal service provides a vital social service as well as a postal delivery service. In many areas the postman is the only regular point of contact for people who live alone and in isolation. Having a regular postal delivery gives them contact with the outside world and a human contact they would not otherwise have. Over recent years, we have experienced the threat of post office closures, most recently in Fintown in west Donegal. This will become an even bigger problem in the years after privatisation. The focal point for many communities when people come to collect their pensions, child benefit and other payments will be withdrawn and people who very often do not have transport nor access to public transport will have to travel huge distances to collect vital payments, adding significant extra costs on them.

Recital 16 of the directive allows member states to regulate postal services and states that social considerations should be taken into account when preparing the opening of the postal market. This allows member states to protect the social values of the postal service and prevent social dumping, allowing full-time jobs with proper pay and conditions to be protected rather than the experience of other countries where jobs have been replaced by low paid part-time workers who depend on social welfare to supplement their income. Recital 16 needs to be enacted strongly in the Bill to provide some protection for the service and the rural communities that depend on it.

An Post has been designated as the universal postal provider in the Bill, but it is not clear how this option will be funded. It will possibly be by other companies that will operate in the universal service provider sector.

If this is to be implemented, then the Exchequer will have to provide funding for the public service obligation of the universal provider. There is no doubt about this, because the other companies will refuse and ComReg will probably not enforce their contribution to the costs. Otherwise there will be massive job losses and a rundown of the service that will ultimately lead to calls to sell An Post, and this will see the reduction in the standard of service that the postal service provides.

This Bill needs to be strengthened to protect the public interest, provide for a strategic postal service, protect the provision of services in rural Ireland and ensure that our postal service can contribute to our economic revival. If this is not done, it should be rejected by this House.

I consider this Bill to be of critical importance to the people I represent and the people of this country. I did not accidentally select this matter to make my maiden speech in this House, because I consider this to be a crucial Bill and one we cannot let pass without active participation by as many Members as possible.

Since the EU directive on postal services came into effect on January 2011, we are confronted with the reality that there is to be a liberalisation of postal services and that there is no longer an exclusive monopoly for An Post. That is the backdrop to which this Bill is being introduced and it is an unavoidable reality. However, it is important that we use the Bill to build in the maximum safeguards that the directive allows, and that we protect the universal service obligation, the workers, the quality and the cost of the service.

An Post currently employs 10,000 people, who deliver 2.5 million items every day. They have a record of 87% next-day delivery. That is a huge achievement and is the position from which it is beginning. It is a strong position, but it is not invulnerable to unregulated and uncontrolled competition.

An Post has four hub centres around the country from which it delivers the post. Those four centres are the crucial arteries of the postal service and I believe that we should enshrine it in the Bill that nobody can enter the market at a lower point than those four hub centres. In simple terms, I seek to prevent the situation whereby a private operator could come and cherry pick a densely populated area, use the An Post infrastructure to deliver letters at a cheap rate within that densely populated area and not have any responsibility beyond that. Prospective competitors should not be allowed to enter the market below the level of the hub centre. It is crucial because it prevents distorted competition which will undermine the universal service obligation and next-day delivery. The universal service obligation essentially means that every home on every working day can expect to have post delivered at a competitive cost without exclusion, without distinction and without any privilege built in. It is vital that the universal service obligation is preserved for that reason. A total of €100 million was recently invested in an automated system in An Post's four hub centres, and that cannot be undermined by private sector companies coming in below that level.

Under the initial proposition of the Bill, An Post has the universal service obligation remit for seven years. It has an exclusive remit to deliver the post all over the country for seven years. That may well be too short a period, and I am encouraged that in the Minister's comprehensive Second Stage speech today, he said that he was looking at that period with a possible view to extending it. ComReg can decide under the Bill whether An Post remains the universal service provider after seven years, or it can decide to designate another universal service provider, or it can decide that none is required. That might be too loose. In respect of strategic planning and investment and the risk of uncontrolled competition, the period needs review. I hope the Minister will do that and I am encouraged by his remarks about this on Second Stage.

All international analysis and consultancies suggest that Ireland, due to its population base and the nature of the country, does not have the potential for more than one universal service provider. International studies suggest that we may not have rampant competition in this country, but it is important that we do not allow for a situation where that would be the case to the detriment of next-day delivery.

The Minister made the point that the 2002 legislation establishing ComReg allows him or a given Minister to intervene in strategic planning and to give strategic direction. I agree with that, but I am anxious that the Minister would consider further ministerial control of the process at all points. That is crucial. We should not let this opportunity pass without saying that our postmen and women have done an excellent job right across the country. They have provided an extraordinary social service and have been an extraordinary link to ordinary people in isolated rural communities. They are often the only point of human contact for people in the day. They provided an entire network of message delivery and support for people, and they have often gone way beyond their brief. We cannot lose that. No situation should be allowed to arise whereby people would come to collect their post at a designated centre, thus eliminating the personal delivery to each home on a given day. People in more isolated areas should not be expected to come to a centre to collect their post. We cannot under estimate what a crucial part of the fabric of our society the traditional postal service has been, and how vital it is to maintain. While accepting the EU directive, it is vital to build in the kind of safeguards that will preserve it and prevent its erosion in any shape or form.

I am happy the Minister is committed to examining the seven-year term and considering ministerial intervention, albeit while not micro-managing. Nobody expects the Minister to micro-manage An Post but he should have the capacity to control untrammelled competition. I am anxious that we examine the hub centre issue and entry below that point. I am also anxious to ensure that the legislation protects what we have and what is good in our postal service. I accept the reality, value and merit of introducing a postcode system, which is a necessary part of a modern infrastructure, but it cannot be introduced in a way that will affect universal delivery of a postal service to every house every day.

An Post has achieved a great deal and that should be recognised. It needs to build and diversify on that. It was right that the Minister said that in the event of An Post needing subsidisation, although we will be working hard to prevent that, it would be provided to ensure that it would continue to meet the universal service obligation.

As in the case of the importance of the provision of a transport system for old people, the postal service is a crucial part of our national network and must be preserved.

It has become the custom for a Member making his or her maiden speech to thank his constituents. I thank the people of Galway East for affording me the opportunity and honour to serve them in the 31st Dáil.

As Deputy O'Reilly said, the subject of this legislation is not an issue one would tend to read on the Order Paper and on which one would decide to comment. Having been a member of Galway County Council since 2009, I am aware that this matter has been issue for some time.

Like Deputy Luke ‘Ming' Flanagan, I come from a constituency that covers a vast rural area. I will comment on the role An Post has played in the rural community. Canvassing for many months, I met people who live in remote areas. In many cases the postal service is the one social connection they have. It provides an extremely important social outlet for them. During the debate on the Road Traffic Bill, the importance of the role played by the local pub in keeping a community together was mentioned. The role played by the postal service is of similar importance. I was pleased to note in the Minister's speech that the provision of a next day delivery service was mentioned on numerous occasions and I would like to ensure that continues to be provided.

I have no problem with competition as long as it is properly regulated, ensures fairness in the market and a level playing field for all. I would not want players to enter the market, take what they want out of it and the only people to lose out would be the State and the end users.

I support the work of the Minister and will put forward amendments to ensure that the Bill works as effectively as possible. I understand the important role ComReg will have in terms of this legislation. I want to ensure that this will be done properly, step by step, protecting the service for the user at the end of the boreen or road at all times. Unfortunately, in the not too distant past we saw the impact on many sectors of society of a lack of regulation. I hope that we have learned lessons from that and have started to provide a more equitable basis of regulation of services.

Despite what some Members will say, this legislation is not anti-An Post and that company will still provide a very valuable role in the future delivery of postal services. Since the start of this year other companies have been allowed to enter the market to create competition. As Deputy O'Reilly said, the seven-year term is extremely important to allow An Post a chance to change, innovate and, perhaps, become more competitive with other companies entering the market. As Deputy O'Reilly said, it would probably be helpful if An Post were given more time to do that because it will be extremely important in the context of the role it will play in the future.

We need to be tough on the new entrants to the market. A fair, balanced approach is probably the best way forward. They will have to work to the same guidelines as An Post and provide the same level of service to every member of the community, whether they live in Dublin city, Mountbellew, my home town, or wherever.

I welcome the Minister's speech. I look forward to working with him in amending sections of the legislation which require amendment. I welcome his assertion on numerous occasions that a next-day delivery service will be provided and that it is considered an extremely important part of any future postal service. He also referred to the local post office, which is a crucial social element in small towns and villages throughout the country, to the effect that it would be protected as much as is humanely possible.

I want to work with the Minister on this legislation with which I have a few issues. I want to ensure the protection of a next-day delivery service at all costs and to make sure that the service user is protected in all parts of this legislation.

This is an important Bill which follows on from a process of changing the way the postal system operates in Ireland which has been under way since the late 1990s. It is the third and final phase of deregulation of the postal market and deals with the small envelope market, those weighing under 50g. It deals with two elements, namely, the introduction of competition into the 50g envelope market and the introduction of postcodes. The changes must be carefully considered to ensure we do not make mistakes similar to those that were made in other European countries which led to a poorer service, higher costs and job losses. Postal delivery is a vital public service. We must ensure that every household and business continues to receive a good service through the postal system. It is essential to the social well-being of our local communities and to maintaining the fabric of rural Ireland where the service is not as difficult to provide in some cases as in urban areas.

In the absence of a proven method of financing, there are serious questions we have to consider in terms of the universal service obligation and how it will be financed. I am glad the Bill has been amended to ensure that the universal service obligation will be offered to An Post for a period of 20 years rather than the seven years originally intended. That is an important change. We must take on board the lessons learned from the service delivery in other countries, particularly in the United Kingdom where the introduction of a universal service obligation threatened the structure. The experience of the Royal Mail shows how important it is to get the universal service obligation correct to ensure that, with privatisation, the service to the end user and the daily service which is so important across the country is maintained. If it is handled poorly, it could endanger An Post and many of the 10,000 jobs it provides.

An issue of which we must take cognisance is that of cherry picking, namely, ensuring that new entrants to the postal market do not take only the profitable routes and leave the more difficult and less profitable routes for the State to subsidise while those private operators make money out of the system. Such cherry picking of routes would result in a reduction in the vital revenues of An Post and leave it with only loss making routes, which, in turn, would threaten its provision of and ability to operate the universal service obligation.

An unfortunate aspect of privatisation is that it often goes hand in hand with job losses. That has been the experience across different sectors. According to a comprehensive study conducted by the Union Network International across several liberalised markets, this has been the experience in almost every case in which a postal market has been opened to competition.

Social dumping is another serious issue, whereby decent jobs with reasonable terms and conditions are replaced by less attractive employment at lower levels of remuneration. At a time when unemployment is high across the country and many households depend on the jobs provided by An Post, it is important we ensure these jobs, which are particularly important to rural areas, do not become less attractive or force people into a more difficult situation.

The social value of the postal service is acknowledged across the State, and particularly in rural communities. During last year's difficult weather conditions, postmen took their lives into their own hands to venture down frozen roads. The postman was the only person the inhabitants of many of these areas saw during that period. In my area, postmen volunteered to pass on messages and ensure vulnerable people were being looked after. That role is not directly linked to the provision of postal service but it is very important to communities and we must ensure it is maintained. It is remarkable that the legislation does not refer to the vital role the postal network plays in rural communities. The regulator's decisions must take account of the valuable service that postmen offer. With our substantial rural population, we have to ensure the interests of a competitive market do not take precedence over this community service.

Despite the fact that An Post remains a public company, it works quite well in terms of the service it provides to end users. It currently employs 10,000 staff and every day it delivers 2.5 million items of mail to 2.2 million businesses and residential addresses across the country. It serves 1.7 million customers per week through its network and the purchase and servicing of its vehicles, uniforms and other equipment provide spin-off benefits to local suppliers throughout the State.

The planned introduction of a post code is long overdue. We are now the only country in Europe which has not introduced a post code. Alongside the privatisation of the postal market, post codes are critical to ensuring that the postal service is operated as effectively and cheaply as possible. It will be of particular benefit to rural areas which do not have the unique addresses enjoyed by those who live in cities and towns. In country townlands where doors are not numbered it can be nigh impossible to identify the proper address. Often in rural communities the regular postman is the only person who can deliver letters to the intended address and deliveries can be a nightmare for a temporary replacement. Post codes are essential to allowing other operators to enter the market and for businesses to minimise the cost of sending post. It will be possible to address mail to individuals within households. I have heard numerous complaints from businesses and organisations with countrywide membership regarding the difficulty of identifying exactly who lives in a household in order to send one notification instead of several to the same address.

The initial intention behind the privatisation of Eircom and deregulation of the telecommunications market was to ensure a high quality of services for end users. Unfortunately, large tracts in the more peripheral areas of the country still do not have a decent service. The State has been removed from being able to invest directly to provide services to areas which are not financially rewarding. We must take cognisance of the Eircom experience as we deliberate on this Bill. Although we are not dealing with physical infrastructure in the sense of telephone lines, investment and subsidies will nonetheless be required either from the Government or through charges on those who get contracts in lucrative areas.

Although the intentions behind the Bill are good, we have to ensure it is implemented in a way that provides an equal service to everyone. Companies should not be allowed to profit while some of our citizens suffer.

This is my first time to speak in the Chamber and the first time in the history of the State that someone from the Beara Peninsula has had the honour of gracing this House. To put the peninsula into context, it is the same size as County Louth. I also declare my interest in the legislation in that I run a post office, although I am not directly employed by An Post.

I welcome the provision in the Bill for a universal service obligation but the important question is who will pay for it. The Bill requires that An Post or another designated company will be required to pay for the obligation. We will have to strengthen this provision because otherwise the Exchequer may be forced to copperfasten the obligation to deliver to rural and peripheral areas and the islands.

Debate adjourned.
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