Other Questions

Radio Licensing

Timmy Dooley

Question:

6 Deputy Timmy Dooley asked the Minister for Communications, Energy and Natural Resources if, following the introduction of digital television, he intends to instruct ComReg to ensure all 3G and 4G licences issued will be subject to a requirement of 100% population coverage; and if he will make a statement on the matter. [30098/11]

The management of the radio spectrum is a statutory function of the Commission for Communications Regulation, ComReg, under the Communications Regulation Act 2002. In accordance with this function and its obligations under EU law, ComReg designs and manages the spectrum assignment process. In so doing, it must bear in mind the objectives of ensuring the efficient and effective use of radio frequencies, promoting the harmonisation of use of frequencies across the European Union, and encouraging investment and promoting competition in the interests of consumers. ComReg is independent in the exercise of this spectrum management function.

The individual licensing of wireless communication equipment is also a function of ComReg under the Wireless Telegraphy Acts 1926 to 2009. Under the Acts, mobile telecommunications service providers and operators are required to obtain licences from ComReg. They are also required to comply with licence conditions set by it in accordance with regulations made by it under the Acts and in accordance with the EU regulatory framework.

I am advised that ComReg will not be granting 3G or 4G licences in the future. Instead, a multi-band award of spectrum in the 800MHz, 900MHz and 1,800MHz band, via auction, is proposed. In accordance with European directives, spectrum will be released on a service and technology neutral basis. I am advised that this means that the eventual licensees will be permitted to use their spectrum allocations to provide electronic communications services of their choosing, including mobile telephony and Internet access services, subject to certain technical specifications — for example, compatibility as set out in the directives.

I am further advised that the minimum population coverage requirements of the existing 3G licences were volunteered as part of competitive evaluation processes. Competition between current operators has delivered coverage levels that exceed, often significantly, the minimum coverage requirements set out in the licences. Coverage continues to be an important competitive differentiator in the market and operators continue to give it prominence in marketing and advertising campaigns.

Additional information not given on the floor of the House

ComReg advises that a stipulation of 100% population coverage is not proposed, as it would require costly and duplicative infrastructure to be built. However, it expects that market competition will continue to deliver comprehensive coverage for voice services in a cost effective manner. ComReg is of the view that its current proposals will also ensure cherry-picking of high density urban areas does not occur.

ComReg has undertaken an extensive and comprehensive public consultation process on its proposals for the forthcoming spectrum auction. I expect that it has examined every aspect in great detail with a view to ensuring the maximum possible benefit for consumers, in accordance with its statutory obligations. Details of its proposals are available in its latest published document, ComReg 11/60, and associated documents.

From the Minister's reply, one would think he had no role in the matter and that he could not give any general directives to ComReg. If necessary, he could, of course, legislate. When ComReg issues 800MHz and 900MHz band licences, will it be a condition to have 100% coverage across the territory of the State? Furthermore, will the Minister assure us that coverage will extend indoors? If it refers to outdoor coverage, it should be noted that most people use such devices indoors. Will ComReg insist on whoever receives a licence providing 100% coverage across the State within a fixed period?

Given the complexity of this issue, I have already suggested to the Deputy that it would be a good idea for the Joint Committee on Communications, Natural Resources and Agriculture to invite ComReg to make a submission on this matter. The Deputy is probably posing the question because he knows there is no such thing as 100% coverage. He also knows that in many of the precedents set there has not been 100% coverage, even in the case of the RTE signal. For example, when Vodafone received its licence, the requirement was that there be 85% coverage. In the case of O2, the figure was 80%, and for Meteor, 53%. Because of the competition factor to which I referred, all of these operators comfortably exceeded the requirement set. The result is that we now pretty much have universal coverage. I have represented views to ComReg which has conducted its consultation process. It would be productive if ComReg was to make a submission to the joint committee.

We will certainly invite ComReg and I understand the joint committee is in the processing of doing so. In the meantime, policy is laid down by the Minister, not ComReg. When he talks about 70% coverage, he is referring to population; the figure is about 50% in the case of territory. It is interesting to note that the figure for Germany is 90% and for the United Kingdom, 95%. Is it Government policy to ensure that when spectrum is awarded via auction, there will be as near to 100% coverage as possible? The Minister can probably argue that in the case of RTE there is 99.99% coverage. It is virtually 100%, although we will probably settle for slightly less. We must be careful, however, because if the Minister refers to a target of 95% of the population, that may cover only 80% or 85% of the territory of the State owing to the population imbalance between different areas.

Can the Deputy, please, put a question?

I am asking a question. Will the Minister set minimum coverage requirements to be sought by ComReg to ensure there will be a universal service throughout the State, or will he be the agent adding to the digital divide within the country?

I am reluctant to agree with the Deputy that there is a digital divide in the way he portrays it. The reason we have a statutory body charged with management of this process is that it has the technical and professional capacity to assess it. It is a very complex issue. I think the Deputy understands the point I have made, that there is no precedent in which there has been 100% coverage. However, because of competition in the marketplace, there will, in effect, be universal coverage. The Government's policy approach to the spectrum to be awarded by auction is primarily that it offers us the capacity to enhance mobile and especially broadband services. That is the main policy objective. Second, it will realise a not insignificant income for the State which may be seen by the Deputy as incidental to the policy objective, but it is important.

It is not incidental.

I am sorry, but the Deputy will have to raise that matter on other day. We are proceeding to Question No. 7, as we are way over time.

Alternative Energy Projects

Catherine Murphy

Question:

7 Deputy Catherine Murphy asked the Minister for Communications; Energy and Natural Resources having regard to the projected continued decline in international crude oil production and the over-dependence on imported oil here, his plans to adopt the oil depletion protocol (details supplied) as passed by the Portuguese parliament in April 2011 as a clear statement of his intention to wean off over-reliance on imported oil and to facilitate a rapid transition to renewable energy sources and energy efficiency measures; and if he will make a statement on the matter. [29912/11]

Ireland remains critically dependent on imported fossil fuels, particularly oil and natural gas. This dependency underlines the immediate and long-term imperatives of enhancing energy security, reducing price volatility and ensuring energy sustainability. National energy policy objectives are in line with overall EU policy objectives and are informed by the critical work of the International Energy Agency on all aspects of energy supply.

The Government is fully committed to delivering national energy efficiency and renewable energy objectives that are aimed at moving the economy away from reliance on imported carbon-intensive fossil fuels. The adoption of an oil depletion protocol is not required as a further statement of intent on this commitment, which is underpinned by the programme for Government.

The electrification of transport offers considerable potential for Ireland, not just in terms of energy efficiency but because of the ability to use cheaper grid-sourced electricity, an increasing amount of which will be sourced from renewable resources as we progressively deliver on our ambitious target of 40% renewable energy generation by 2020.

The bio-fuels obligation scheme incentivises and enables the sustainable growth of an Irish bio-fuels market affording opportunities for indigenous bio-fuel producers and allowing for the displacement of traditional oil products in the transport sector. During the first obligation period — the last six months of 2010 — the bio-fuels obligation scheme was responsible for bringing a total volume of 98.5 million litres of bio-fuels on to the Irish market, which is equivalent to more than 4.25% of the transport fuel market in the State.

The Better Energy scheme provides Exchequer-supported incentives for energy efficiency and renewable energy upgrades, brings 25 energy suppliers on board as partners to offer upgrade services directly to consumers and supports energy-efficiency upgrades in low-income private housing. Delivery on these commitments will progressively reduce our dependence on imported fossil fuels.

The Minister's point, that we are critically dependent on imported fuel, is key. Would the Minister call the target of generating 40% of our energy from renewable resources by 2020 ambitious given our dependence on fossil fuels, oil in particular? It may well not be. Are there initiatives that the Minister believes could be invested in that would provide jobs and assist us in exceeding the target that are not being considered because of the financial limitations? If so, are there other areas being worked on that could allow us to exceed our target of 40%? I do not regard the target as ambitious given that we are probably now at the point of peak oil.

As Deputy Murphy will know, the experts differ on the definition of peak oil and when it will be reached. The central point remains, namely, that the extent to which the State relies on the importation of fossil fuels is critical. That is indisputable and I accept it, but there is an ambitious programme under way to develop our capacity in renewable energy.

The Deputy's asked whether there are initiatives in addition to those making a contribution to energy efficiency that would create jobs but which are constrained by the current economic environment. The honest answer is that there are. There is no doubt but that the area of retrofitting in the residential sector, for example, offers great potential for energy saving, given the standard of housing. Retrofitting has a significant spin-off in terms of employment. The additional €30 million we invested in this area this year through the jobs initiative means there are now almost 6,000 people employed at retrofitting. The answer to Deputy Murphy's question is that, if I were able to invest thrice as much, it would have a commensurate result in terms of energy savings and job creation. We are constrained by the financial circumstances.

Is there a tipping point? With regard to Deputy Ó Cuív's question, it was stated one could not forecast four years ahead. One could certainly forecast that, in ten years, we will run into very serious difficulties in providing energy to the industrial sector, for example, by virtue of the fact that we are not proceeding quickly enough. There is probably a tipping point beyond which investment will not yield the desired result. The Minister referred to the result of investing three times as much as is being invested at present. What is the consequence of creating the jobs at this stage? What is the return on the investment of €30 million? If it were trebled, would it cover its own cost over time?

Yes. I am currently fighting as if for my life to keep the retrofit programme alive until we move on to the next phase. We have done considerable planning and preparation to divine a new model for retrofitting nationally. Public and commercial buildings constitute a valuable area in terms of potential energy savings and job creation. The idea is to create a new model that will involve a partnership between the energy supply companies and the banking sector. Homeowners will be enabled to get the work done on their homes largely using the savings they make on their energy bills. It is a win-win situation. Homeowners will have more comfortable homes and the work will be paid for with the savings made. The supply companies and banking sector would be part of the delivery process.

Fiscal Policy

Charlie McConalogue

Question:

8 Deputy Charlie McConalogue asked the Minister for Communications, Energy and Natural Resources in view of a statement (details supplied) confirming to Dáil Éireann last week that the sale of strategic State assets was not a condition of the Memorandum of Understanding of December 2010, if he is in favour of the sale of State assets; and if he will make a statement on the matter. [30109/11]

Richard Boyd Barrett

Question:

10 Deputy Richard Boyd Barrett asked the Minister for Communications, Energy and Natural Resources if he will explain his role in the discussions around the disposal of State assets under the EU-IMF programme and in relation to NewERA and proposals for a State investment programme to create jobs; and if he will make a statement on the matter. [30088/11]

Derek Keating

Question:

14 Deputy Derek Keating asked the Minister for Communications, Energy and Natural Resources if, in relation to the group set up on the sale of a stake in the ESB, the names of the members and its terms of reference. [29909/11]

I propose to take Questions Nos. 8, 10 and 14 together.

The EU-IMF Programme of December 2010 involves a commitment that the Government will outline methods to raise funds through asset disposal. The 2011 budget included a similar commitment. The programme for Government includes a commitment to finance investment from the proceeds of the sale of certain non-strategic State assets.

Far from confirming to Dáil Éireann last week that the sale of strategic State assets was not a condition of the memorandum of understanding of December 2010, the Minister for Finance, Deputy Noonan, stated that the European authorities and IMF require the sale of State assets as part of the programme and confirmed that the Government supports the sale of non-strategic State assets.

Ireland is significantly dependent on the funding arrangements put in place under the EU-IMF deal to pay for its public services and restore the banking system. In this context, I accept that the fiscal path to which the Government is committed under the EU-IMF agreement demands that the option of realising value from State assets be fully explored. I accept that there is significant value in commercial State energy companies that could be realised at an appropriate time after necessary further analysis of all the complex factors relating to the disposal of commercial assets in the energy sector.

The memorandum of understanding between Ireland and the troika, as revised last April, commits the State, at the insistence of the troika, to an ambitious programme of asset disposal. In terms of value, this has inevitably led to a particular focus on the State energy companies, especially ESB Electric Ireland. In this context, the sale of a minority stake in the ESB as an integrated utility has been agreed by the Government. This decision is an early demonstration of the commitment by the Government to the programme for Government objectives and its obligations under the memorandum of understanding. The sale will be advanced by means of a defined process involving a full evaluation of the best approach to be taken, including consideration of the size of the minority stake to be sold. The process is being progressed by a group co-chaired by my Department and the Department of Public Expenditure and Reform and includes officials from the Department of Finance, the National Treasury Management Agency and NewERA.

I imagine that in his heart and soul the Minister is on the same track as me. It appears the ideologues in the Minister of State's party and the troika are pushing this along. Reading between the lines I suspect the Minster is trying to follow the principle of festina lente. While he has been forced to agree in principle, he will place a dris chosáin all along the way in the hope this will never happen because he and I know it is wrong. If that is his intention, he has my full support. Will he confirm that this is what he is trying to do?

He cannot say it in public.

If ever there was a booby trap set for a Minister, this is it.

It was set by the Minister.

If the Deputy does not mind, I will fail to spring it. The reason it is a case of festina lente is market circumstances are such that no one would wish to go to the market with State assets. The reason we are going to the market is the memorandum of understanding. The House has seen what has been enforced in Greece in the disposal of state assets. When one considers the menu of State assets in this country, as detailed in the Colm McCarthy report, one comes back to the energy sector. There are several other areas in which one could seek to realise a sale, but the proceeds would not make a great impact on our mountain of debt. Therefore, one comes back to the energy companies. The approach the Government has sanctioned is to seek a compatible investor at the right time, for example, something like a pension fund, to take a minority stake in a successful, vertically integrated utility in Ireland which is profitable, pays a dividend, is creating employment and a major player in securing our energy supply.

In the coming four years the turnover of the State will be in excess of €200 billion. The margin for error in that amount far exceeds the €2 billion referred to in the programme for Government to be raised through the sale of State assets. Therefore, like many other things, in financial terms, this aspect could be renegotiated. It is simply a drop in the ocean. So far this year the Government is €800 million ahead of the targets set in the budget. Will the Minister confirm that this process is being driven by an ideological view in the EU-IMF troika rather than by a financial need? If we achieve the targets set in the four year plan and the memorandum of understanding by growth, without selling assets, does the Minister believe the EU-IMF troika would agree that assets need not be sold? In that event, would the Minister be in favour of not selling them?

If we could achieve the targets set without the sale of State assets, the honest answer to the Deputy's question is that I would be perfectly pleased with that outcome. My approach to the disposal of State assets is that I am prepared to examine the issue on a case-by-case basis. Different arguments can be advanced for different holdings in State ownership and arguments that apply to one do not necessarily apply to all of them. This is one of the merits of the shareholder executive idea encompassed or proposed in the NTMA in the guise of NewERA. Individuals with the necessary expertise and the capacity to import expertise where needed will assess the totality of the menu in place on a whole-government basis.

Is the process being driven by an ideological view in the troika? It might be better if the Deputy were to put that question to some of his colleagues. I do not know what drove them to include it in November. I have watched the situation unfold in Greece and discussed it with my Greek counterpart. The view in Greece is that they could not possibly meet the imposition on them and that they do not have the amount of state assets required to realise the targets set for them by the troika. I am unsure whether it is ideological, but there is certainly a view within the troika that the entire purpose of this country being included in a programme such as ours is to encourage the recovery of the economy in order that we can seek market access again during the lifetime of the programme. The sooner we can go back to the markets to source our own funds to run the State the better. It seems taking a rigid, ideological position is not necessarily compatible with this objective.

The Minster has gone some way towards answering the question I intend to pose. To what extent does he believe he is in a straitjacket in dealing with this issue? To what extent is he in a bind in having to sell a stake in the ESB?

Several people representing the three elements that make up the troika visit this country at the end of each quarter and check the homework of the Department of Finance. If we are not in compliance, they will not sign the cheque. Up to now, they have accepted it. I hope my ministerial colleagues, Deputies Noonan and Howlin, will be able to report tomorrow that, once again, they have accepted that we have managed to meet the targets set.

We have exceeded them.

The Deputy has broken my train of thought. They require that we realise significant funds from the sale of State assets. It is an open secret that they attempted to include a figure of €5 billion in the renegotiated memorandum of understanding. Instead, the revised memorandum of understanding commits to an ambitious programme involving the disposal of State assets. I am unsure how "ambitious" it is, but I know the figure is more than the €2 billion committed to in the programme for Government. Perhaps the Deputy is correct to suggest that as time passes, a more liberal view will be taken of whether imposing a heavy demand on the State in terms of the disposal of State assets is consistent with economic recovery and restoring growth to the economy. The Deputy might be right in suggesting that as time passes, this aspect will be reviewed.

On the question posed by Deputy Keating, we are in a bind and must show product, so to speak. That is the reason we are in the circumstances we are in with the decision on the sale of a minority stake in the ESB.

I note the Minister is much more ideologically flexible than he was when he was gallivanting around the midlands a few decades ago. I am sure he will justify his flexibility on the basis that we are now in a different place. On the sale of State assets, is he in favour of selling off parts of Bord na Móna? What are his plans for the large tracts of semi and fully cut-away bog owned by Bord na Móna in the midlands?

I have regular discussions with Bord na Móna. The problem is we are running out of móna.

There is a fair amount of móna left down my way.

Yes, the company has been imaginative in diversifying and gradually replacing its core business. The Government is engaging with it in a number of areas. Obviously, the last thing we want to see is a diminution of employment in the company. The opposite is our objective and discussions with it are ongoing. I do not know what we will do with the cut-away bog. We are considering the matter. Much of this Question Time has been devoted to the issue of renewable energy, an area in which one could envisage a significant role for Bord na Móna. That is one possibility and there are others. The objective is to maintain and create employment.

The Minister has been very helpful and Deputies may have obtained a better reading of his mind this afternoon than on any previous occasion. He referred to Greece. Ireland and Greece are in a totally different position because we have adhered to the agreement we reached with the European Union and the International Monetary Fund. It is my understanding from the statements of the Government that the European Union and the IMF do not mind how the Government proceeds, provided it achieves the bottom line. However, when it comes to the sale of State assets, we appear to have common cause because the issue is being ideologically driven by the European Union and the IMF. We have seen what ideologically driven policies and competition in Europe did to the banking sector, for example. Will the Minister try to ensure the privatisation of State assets will be deferred for as long as possible in the hope we can avoid a forced sale of assets we do not want to sell? I am not opposed to selling assets where their sale would be better for everyone concerned. The Minister will agree, however, that the ESB or part of the company is not such an asset. Does he also agree that if one wants economic growth, control over basic energy infrastructure, that is, networks, is vital because one must be able to direct investment from a national perspective rather than on the basis of securing a return on capital? Does he agree that, if possible, the State should retain 100% ownership of the gas and electricity transmission and network systems?

As I have stated on a number of occasions, there is no question of the Government surrendering control of either of the companies to which the Deputy refers. The Deputy referred to adhering to targets, meeting the bottom line and substituting one thing with another. This trade-off is taking place on the revenue side, for example, in reversing the previous Government's decision on the minimum wage, we had to modernise the joint labour committees. However, the troika has not at any stage indicated an intention to let us off the hook on the commitment to dispose of State assets set out in the original memorandum of understanding.

While I sincerely hope the quantum is open to negotiation, the divvy-up between what we put into an envelope to send to Frankfurt and what we can use for reinvestment purposes for job creation in the indigenous economy is as important. I hope this matter will also be up for negotiation. I know the Minister for Public Expenditure and Reform, Deputy Howlin, and the Minister for Finance, Deputy Noonan, have been engaged in that very process. As Deputy Ó Cuív stated, this may well be a dynamic that unfolds over a period. I have already given him a fairly frank answer to the original question he asked. However, the ideology, if that is what the Deputy calls it, that drives troika thinking appears to be, as in the case of Greece, that if it is to fund a programme of support for the administration of the State, it expects us to make a contribution in the form of the disposal of some State assets. I hope the quantum, as well as the destination of the proceeds, is negotiable but, as far as I am aware — we will hear what the two relevant Ministers have to say tomorrow — there is no sign that the troika has relented on the principle of the State making a contribution through the disposal of some State assets. While I wish it were not so, that is the position.

Does the Minister understand what is driving the process? It is being done in the interests of private companies and financiers which want to get their hands on assets the Irish people have built up. If that is the case, we will work with the Minister to ensure they do not succeed. We will support him and I hope he will support our efforts.

Written Answers follow Adjournment.