The Fine Gael Party moved that the Telecommunications Bill be given its Second Reading last week. The Bill is designed to establish a watchdog function for a director of telecommunications. Deputy Noonan (Limerick East) explained this clearly when speaking on Second Stage. Of course, establishing a director of communications with a watchdog function would involve the removal of the regulatory and supervisory function of the Department and the vesting of that function in an independent officer. The Bill also provides for the introduction of competition in the area of telecommunications. It is interesting to contrast what the Minister for Transport, Energy and Communications, Deputy Cowen, said last week with what he said this week. Last week he said the Bill was “opportunistic, inconsistent and out of accord with policy developments of recent years”. This week he confirmed that the Government will establish a new regulatory authority which will remove supervisory control from his Department. Furthermore, he announced that the Government will introduce competition to telecommunications.
Private Members' Business. - Telecommunications Bill, 1993: Second Stage (Resumed).
The Deputy was not listening last week, he should read the speech.
I was reading The Cork Examiner yesterday — no better bible to follow — and there for all to see was: “Government to set up Telecom watchdog”, and the strong statement over the weekend by the Minister for Transport, Energy and Communications. Indeed it said in The Cork Examiner report that “the development comes as a surprise”, it does not come as a surprise to me. the Minister, having rubbished the Bill last week, now appears to fully accept its logic. The Minister's conversion to common sense is more dramatic than Saint Paul's conversion to Christianity.
Why should I be surprised? It should be no surprise that the Bill comes from Fine Gael because we have had an interest in telecommunications for many years. In fact Fine Gael set up Telecom Éireann in 1983 and we are very proud of it.
Telecom Éireann was set up for a variety of reasons and, as a consequence, the cold hand of departmental bureaucracy was removed from the day-to-day running of the business. Enormous progress has been made since we took that step but the basic point is that Telecom Éireann cannot continue as a statutory monopoly.
It was set up as one.
If it tries to do so it will suffer the same fate as Aer Lingus. That is the problem. Having mentioned Aer Lingus in relation to Telecom Éireann, it is very obvious that the Government is acting in the same way as it has done in relation to Aer Lingus: It is speaking with a forked tongue. The Fianna Fáil wing of the Government seems at least to be prepared to accept the need for competition but its Labour wing pretends there is no need to adopt this approach. It was quite interesting last week to listen to the contrast in the speeches from the Government benches. In particular I noted the contrast between the speech of Deputy Lawlor and that of Deputy Toddy O'Sullivan. They were coming from opposite ends of the spectrum. Indeed Deputy Toddy O'Sullivan was so incensed by my opening remarks in which I referred to competition, which were on a par with Deputy Lawlor's comments, that he attempted to shout me down. It was obvious I struck a very nervous cord so far as he was concerned. That does not indicate a coherent approach on the part of this Government in relation to Telecom Éireann or any other issue, not least Aer Lingus. The Labour element of Government muddied the water further by pretending that the Fine Gael Bill is about privatisation. Fine Gael has made it absolutely clear that it believes competition in telecommunications is good for the country, for the consumer and, above all, for Telecom Éireann. Furthermore, this Bill has nothing to do with ownership, it is about competition. It is in the national interest that Telecom Éireann should face up to competition at this stage and this Bill would help it to do that.
It is obvious that huge changes in technology are taking place internationally and unless Telecom Éireann faces up to competition at this stage it will be unable to cope with those changes in the years ahead. Therefore, the Labour campaign of misinformation should stop now because the consequence of such a campaign will damage the morale of the excellent work force of Telecom Éireann. The Labour Party appears to be deliberately damaging the morale of that workforce. It should stop its campaign of misinformation and end its silly utterances on this issue. If it cannot find some provision of the Bill to attack, it should at least stop its attacks on something which is not contained in the Bill.
So far as I am aware, every Member of this House agrees with Fine Gael that a private monopoly is not in anyone's best interest. Therefore, it is ludicrous that the Labour Party should oppose the Bill on the basis that it opposes the establishment of a private monopoly that has not been proposed by anyone. That type of approach is similar to the entire campaign of misinformation which has bedevilled the debate since telephone charges were increased, a campaign that was assisted by claims from the Minister of State, Deputy Fitzgerald, that the increases were preordained and recommended in the Culliton report. Those claims were of no help whatsoever to this debate. Members will recall that it took an irate personal rebuttal from Jim Culliton, the Chairman of the Culliton report, to put the record straight in that case. From the beginning, the approach of the Fianna Fáil-Labour Government and Telecom Éireann management on this issue has been that the public are very gullible.
As a Telecom Éireann consumer I received a letter from Telecom Éireann in September relating to my private telephone to the effect that "I would surely welcome the news that Telecom Éireann rates had been substantially reduced from 1 September, 1993." The justification for that surprising information and the enormous increases in local charges was contained in a leaflet on international residental prices which was included with the letter. That leaflet referred to reductions in telephone charges for calls to various countries. It outlined the following reductions: 38 per cent in telephone call charges to Andorra, 18 per cent in the charge for calls to Austria, 19 per cent in the charge for calls to Albania, Algeria, Armenia and Azebaijan and 35 per cent in telephone call charges to Alaska, Anguilla and Antigua. I discovered from that leaflet I would be able to ring Australia at a cost of £1.05 per minute and Afghanistan, Angola, Argentina, Aruba and Ascension for £1.67 per minute. That is only the beginning of the story.
The Deputy is certainly meandering now.
There was no pressure from the people in Cork south-west or, so far as I am aware, from people in any other part of the country for a reduction in telephone charges to such places nor have I been inundated with calls from greateful constituents to be passed on to Telecom Éireann in relation to those reductions. On the other hand, I received a deluge of complaints about the increases in local call charges which are relevant to my constituents and to 95 per cent of the people generally.
International call charges had to be reduced simply because they were so much out of line with charges applying in other countries. A call to America for an American who lives in my constituency costs the equivalent of $2 a minute, but if he makes his call by way of an American card service on a reverse call basis to the American telephone company the call costs him $1 per minute. I have bills to prove that. There was no way the inflated international charges could be maintained. International charges have been reduced only to the same level as applies internationally. As a consequence the portion of calls to and from Ireland will probably equalise at 50:50 whereas until a few months ago the ratio was approximately 60:40, the reason being that a significant number of outgoing calls was made in the manner I described. If that process had continued it would have virtually wiped out much of Telecom Éireann's international business.
To attempt to justify increasing local charges because of the reduction in international charges is entirely illogical. Because of the campaign of misinformation carried out by the Government the general public are rightfully angry about the increase in local charges. Furthermore, Telecom Éireann as a monopoly company is calling on people to restrain themselves from making telephone calls. Instead of the old advertisement which stated "make that call" we now have an advertisement calling on people to "not make that call". That is turning logic on its head and could only arise where people try to justify an untenable situation or where there is a monopoly. As I stated at the outset, Fine Gael believes that a monopoly is bad for the consumer, for the country and, above all, for Telecom Éireann. If the management of Telecom Éireann has any concern for its workforce and the consumers it must prepare itself for competition by improving its efficiency, and seek to increase rather than reduce its business. In the past its workforce has shown that it is able to improve productivity in the company. In particular, since it escaped from the clutches of the Department it has had an outstanding record. I have no doubt that given the proper lead by management, the workforce can repeat the same exercise in the years to come. There is no reason that trend cannot continue.
Since the changes in telephone charges were brought into force there has been an 8 per cent reduction in the number of calls made from telephones in the residential sector. That indicates a "thumbs down" approach from residential telephone users to the actions of the Government which are generally agreed to have been a fiasco. The Government must face up to its responsibilities and accept that competition is the answer. At least one section of the Government appears to have adopted that approach. The Government should review local call charges but I am unsure whether the official or provisional wing are prepared to do that at this stage. It should also establish procedures whereby consumers are encouraged to increase telephone usage, thus bringing more benefits to Telecom Éireann. That is the obvious answer in the business world; a businesslike response is required.
Telecom Éireann must be given an opportunity to compete both nationally and internationally. It must become more involved in research into new telecommunications techniques and must be able and willing to be in the front line of the dramatic changes that undoubtedly will take place in the years ahead. Furthermore, Telecom Éireann must value its consumers to a greater extent. A clear message must be given to the management of Telecom Éireann in that regard. Telecom Éireann can no longer ignore the fact that the greatest volume of complaints to the Ombudsman are made from telephone users. In the past, resonable and legitimate complaints from the public have been met with threats to have their telephone service cut off. That could only happen in the case of a monopoly supplier. It is typical of a company with a monopoly. Telecom Éireann must change its approach and become more market oriented. In the Cork area there is a huge sense of grievance because the city and county are not classified as one local call area. The Cork city code covers towns nearby such as Kinsale, Midleton, Fermoy, Mitchelstown and Mallow but outside these areas calls cost more. The sense of grievance is heightened by the fact that Dublin city and county and places adjacent to the county such as Counties Louth, Meath, Kildare and Wicklow are all included in a local call area. Many complaints have been voiced to Telecom Éireann on this issue but they have been rejected out of hand. That is typical of the reaction to consumer complaints by Telecom Éireann and of the scenario that arises where there is a monopoly. It is not good enough. The management of Telecom Éireann are storing up trouble for themselves because when the opportunity arises for people to use services such as the American 'phone card service to which I referred, they will have no loyalty to the company. Certainly the case made on this issue is reasonable.
At this stage the Government should have the good grace to acknowledge that its handling of the Telecom Éireann charges has been a shambles, added to by the campaign of misinformation in which the Government indulged. The Government should accept that the competition approach advocated by Fine Gael, included in Deputy Noonan's Bill, is the answer. That approach must be taken by both wings of the Government. We cannot have an official competition policy and a provisional anti-competition policy which is emanating from the Government at the moment. Furthermore, the Minister should acknowledge that the Fine Gael approach in advocating an independent regulatory function outside the Department will now be followed by him. Competition and independent regulation of telecommunications is the essence of the Fine Gael Bill. If the Government rejects this approach it should vote against Deputy Noonan's Bill, but if the Government agrees with the introduction of competition and independent regulation it should accept the principle of the Bill and vote for it. The Bill deserves the support of all but the most narrowly anti-competition elements in this House.
In an effort to justify rejecting this Bill the Minister, Deputy Cowen, was rather petty in relation to its drafting. Everybody knows that the Opposition does not have access to official draftsmen or hordes of civil servants to make sure that every comma is in the right place. The function of the Opposition in producing a Bill is to put the principle before the House and when it passes Second Stage it can be referred to the official draftsman if necessary. In a number of references Deputy Cowen attacked the drafting of the Bill. He said that Deputy Noonan had referred to Bord Telecom Éireann instead of Telecom Éireann and other such petty references. If that is the only basis on which this Bill can be rejected by the Government, it should think again. That kind of codology does not do the Minister credit. If the principle of the Bill is worth adopting the Government should stop nit-picking and support it.
I suspect that the Minister is indulging in nit-picking to paper over the cracks in the Coalition and the fact that there is a divided view in the Government. Some elements on the Fianna Fáil side, like Deputy Lawlor, favour competition and the other element epitomised by Deputy Toddy O'Sullivan, is utterly against it. The Government is not doing any service to Telecom Éireann or to the country if its approach is just to paper over the cracks. If the Minister is speaking on behalf of Fianna Fáil he should make that clear but if not, he should make it clear he is speaking on behalf of the Government. It is wrong to reject a Bill which proposes competition and independent regulation on the basis of nit-picking about draftsmanship.
Telecommunications will be a huge business sector in the years ahead. It is clear from what has been written about it that it may be the biggest business sector before the end of the decade. Are we to have a serious debate on where we stand in relation to that growth sector or will we hide behind a monopoly and pretend that the enormous technological and other changes will not affect us? The Fianna Fáil approach to the semi-State sector is epitomised by the ostrich with his head in the sand. That is why Aer Lingus has been left in its present situation and why it suffered enormous losses. My colleagues and I feel that the same approach will be taken to telecommunications and to Telecom Éireann. We are afraid the company will be run down to the extent that it will be almost put into bankruptcy, as Aer Lingus has been. I do not know whether the Government is prepared to face up to its responsibilities, but there are enough examples to show that political cowardice in relation to semi-State bodies is total dereliction of duty. There have been many examples of political cowardice in relation to semi-State bodies by Fianna Fáil and, more recently, by Labour. I am anxious to ensure that political cowardice is not the downfall of Telecom Éireann as the company is too important. The company must be ready to face competition, to grow and to provide work for its workers rather than to go into decline. Growth in telecommunications provides the possibility of more rather than less work for workers but if the Government hides behind the fiction that we can insulate ourselves from the changes in the telecommunications sector in Europe and throughout the world, it is condemning Telecom Éireann to a slow decline.
A Government which treats Telecom Éireann in the way it has treated Aer Lingus does not deserve to be in Government. Parties which are prepared to ignore the facts and allow the company to go into decline do not deserve to be in Government because they are not being fair to the country and in particular to those who work for Telecom Éireann. We in Fine Gael have been prepared to face the facts. Deputy Noonan has put before the House a reasonably argued Bill designed to be of benefit to Telecom Éireann and the country. It calls for a commonsense, visionary and fair response from the Government rather than the responses given by the Minister, Deputy Cowen, and his colleagues to date.
The Government will not be supporting this Bill for the many good reasons outlined by the Minister, Deputy Cowen, on Tuesday last. At the outset I would like to respond to some of the points raised by Deputy O'Keeffe, I am sure that he would accept, as a practising politician, that politicians do not mind being quoted provided, first, the quotation is accurate and, second, it is relevant. In his speech to the House last week the Minister, Deputy Cowen, said:
I intend to take the necessary action to stimulate the development of this critically important sector without undue delay. I am predisposed to increased competition and to independent regulation. These two go hand in hand.
Those are the facts. The Government and the Minister, Deputy Cowen, are acting on behalf of the consumer in conjunction with the management of Telecom Éireann.
It would appear from the debate so far that the Government's misgivings are shared by the great majority of speakers and I would like to touch on some of the issues which have been raised. It is important to identify the real context in which this Bill is being brought forward. Some play was made of the difference between "opportunistic" and "opportune" by speakers on the other side. It might have been argued, and I am not saying that we would accept it, that this Bill was opportune if we were somewhat more advanced on the road to open competition and if there had not been more pressing issues to be dealt with. There are and we are dealing with them. What we are doing of course in attempting to rebalance telephone charges is to prepare the way for more open competition and especially to place Telecom Éireann in a position to deal effectively with it. Indeed, the Minister for Transport, Energy and Communications made it quite clear that the competition question was under urgent consideration within the Department. The Minister has also made it quite clear that he favours competition and is already moving towards independent regulation. That is why, as a first step, there is to be a separation of "regulation" type functions within our Department from those relating to general policy and shareholder type functions.
The Minister further stated that whatever legislative and administrative arrangements prove necessary will be made in due course. These are complex matters and will take time. They cannot be dealt with by headline grabbing measures such as the one before us now.
Accordingly, I have no hesitation in endorsing my colleague's view that this Bill is not at all opportune. However it is quite obvious that it has been carefully tabled to coincide with the immediate effects of Telecom Éireann's rebalancing exercise, when Telecom Éireann is taking the first difficult but necessary steps on the road to competitive tariffing. On any construction that is opportunistic, to say the least.
Deputy Noonan stated that it was not an attack on Telecom Éireann. It is difficult to see how it could be otherwise at a time when the company has had to take such difficult steps, especially in such a well orchestrated climate of hysteria. What is called for is a dispassionate analysis of the steps that have been taken. That, in turn, will not be possible until we have had a settling in period during which the rebalanced tariffs can take effect. Let me re-emphasise that it is futile and irresponsible to play upon the fears of ordinary telephone users at this time.
As the Minister has already said in this debate, the information produced by Telecom last week gave the facts in relation to the effects of the tariff rebalancing as we have them at this stage. These figures have been analysed and reacted to in this House and in the media. We should now stand back from the issue and let the established patterns emerge and be subjected to independent analysis at the appropriate time. I would point out, however, that the figures which Telecom Éireann produced were not based on a "survey" as has been suggested in some quarters, but were the result of analysis of actual telephone traffic during the month of September.
The proposers of this Bill assure us that it is not related to the privatisation question. I will leave that to the judgment of this House. I noted, however, the passing reference by Deputy Frances Fitzgerald to the fact that privatisation was an issue across Europe.
(Limerick East): Would the Minister of State disagree with her?
I did not say that I did; I was making the point——
(Limerick East): Then why is the Minister of State casting a slur?
I am making the point that when the Deputy says one thing he means something else.
(Limerick East): Is this not a speech like his partner's — personal attacks instead of logic?
Please, Deputy Noonan, let us hear the Minister of State without interruption.
I did not attack anybody. I was referring to all Deputies.
(Limerick East): The Minister of State should be ashamed of himself.
Deputy Noonan will have ample time to reply in due course.
I am sorry if I have upset the Deputy.
(Limerick East): The Minister of State's rabies is spreading.
The Deputy should desist from any further interruption.
I would point out that this Bill, even though it would leave the ownership of the telecommunications network with Telecom Éireann, would do nothing to shift the onerous obligations contained in its universal service obligations from Telecom Éireann, and, accordingly, would give a free run at the more lucrative areas of opportunity in the telecommunications industry to a host of competitors. One wonders, therefore, about the sincerity of statements that this Bill is not about ownership when ownership in such circumstances would be devalued to such an extent.
I note that Deputies are genuinely concerned about the universal service obligation and the effect of rampant competition on the provision of services in rural Ireland. I would like to deal with that matter briefly. It is a myth — I have listened to many of the contributions — that the charge of £120 for a telephone connection represents the total cost of providing a connection. On occasion Telecom Éireann has to spend up to £25,000 in providing a modern telecommunications service to householders in remote rural areas. People tend to forget this fact. If we allow competition without first protecting the existing provider there will be cherry picking and rural areas will be left without a service. Is this what Fine Gael want to achieve?
The Minister of State's party will say the same about Dublin Bus.
One of the stated purposes of Telecom Éireann's exclusive privilege is the provision of a national telecommunications service. The obligation of network operators to provide a high quality universal service is recognised internationally and certainly in Community open market provisions. This Bill does not take proper account of the balance between those obligations as they are placed on Telecom Éireann and its ability to carry them out. This is one of the most complex aspects of the regulatory function. It will require careful consideration when the time comes to implement an independent regulatory authority and I believe this Bill falls very far short of the mark in taking it into account.
There was a statement that in seeking a derogation from the opening up of voice telephony we had been an apologist for Telecom Éireann at Community level. As the person who negotiated this derogation let me say that nothing could be further from the truth. Whereas there is a derogation in favour of Ireland and some other Community member states until the year 2003 there is no obligation on us to keep the doors to competition barred until that time. Indeed, it would be foolish to do so.
(Limerick East): Is this another temporary little arrangement?
It gives us an opportunity to make a strategic decision.
(Limerick East): It is not a derogation at all.
The derogation merely gives us time, if we should require it, during which Telecom Éireann, which is a very valuable public asset, can make the best of the competitive market now opening up.
(Limerick East): It is like injury time.
This Bill would set that advantage at naught.
I want to turn now to the National Development Plan and to suggestions that the contribution to telecommunications had fallen short of expectations.
(Limerick East): It is off the mark.
Let the interruptions cease.
The fact is that there will be an investment of £870 million in telecommunications over the period of the plan. This recognises the importance of the sector to our national economy. It recognises, too, the relative openness of our economy and our peripheral position in relation to our Community partners.
It is important to recognise that Telecom Éireann has funded an accelerated investment programme during the past decade from internally generated funds and high borrowings. Telecommunications is, after all, an inherently profitable business. It was never intended that EC co-financing would supplant industry expenditure in the sector. Nonetheless we have secured significant assistance for some of the key areas in the telecommunications sector and the National Development Plan.
The range of investments under the plan will facilitate the following developments, among others: the completion of digitalisation; the expansion of the fibre-optical network; further developments in mobile services; and significant improvements in international access. All this will lead to much higher telephone penetration — from 70 telephones per 100 households to over 80 per 100 households.
I commend Telecom Éireann on the outstanding job it did in recent years in building a modern system comparable to any in Europe or elsewhere throughout the modern world.
(Limerick East): Despite bad Ministers.
Deputy Noonan's party claims credit for establishing Telecom Éireann.
The Minister is trying to bring it down.
The Taoiseach, Deputy Reynolds, as Minister for Telecommunications at the time, with the assistance of his Minister of State, Mr. Mark Killilea, modernised the telephone system. The Deputy's party inherited that situation but now claims credit for establishing a company that is doing an excellent job and which must be given an opportunity to strengthen its position before it takes on the competition in the open market.
(Limerick East): Did Mark Killilea write the Minister's script?
Gabh mo leithsceal. There is a time limit on this debate. Consequently interruptions of this kind are most unwelcome, if not disorderly.
I am grateful to the Ceann Comhairle for the opportunity to contribute. We — and Telecom Éireann — are all aware of the challenges ahead. I emphasise that these challenges are posed not only by technology but by new concepts in commerce and in the relationship with Government, but are especially posed by the new relationship with the customer. Putting Telecom Éireann on a secure footing in an open market where no one player is favoured, except to the extent that he is obliged to supply services not guaranteed by competition, will require a careful approach.
This Bill is not the correct approach and I strongly urge the House to reject it.
Ba mhaith liom i dtosach buíochas a ghabháil as ucht deis a fháil labhairt ar an ábhar seo, agus is ábhar an-tábhachtach é. Dá bhrí sin molaim an Teachta Noonan as ucht an Bille a chur faoi bhráid an Tí cé nach féidir liom aontú len a bhfuil sa Bhille céanna.
Is fada mé ag cur spéise i gcúrsaí telecumarsáide. Caithfidh mé a rá gur chuir sé alltacht agus íontas orm mar dhuine óg nuair a chuaigh mé siar go Conamara ag obair a fháil amach ar an gcéad dul síos nach raibh na teileafoin ar fáil ann ar chor ar bith. Thairis sin, má fuair tú teileafón bhí tú ag brath ar cheann de na sean-teileafoin láimhe a bhíodh againn ansin. Ón am sin chuir mé romham go mba cheart féachaint chuige go mbeadh leathnú na seirbhíse ann, go mbeadh cothromú ó thaobh caighdeán na seirbhíse idir an taobh thoir agus an taobh thiar den tír agus go mbeadh cothromú freisin idir na táillí a ghearrfaí ins na réigiúin éagsúla.
Le cúnamh an ineistíochta a rinneadh faoin Aire Airgeadais ag an am, Ailbhe Mac Raghnaill, deineadh dul chun cinn maith sna rudaí sin. Ar an gcéad dul síos tá teileafóin le fáil i bhfad níos fairsinge sa tír anois ná mar a bhí an t-am sin. San áit a bhfuil cónaí orm féin agus i gConamara i gcoitinne tá méadú deich n-oiread ar líon na dteaghlach ina bhfuil teileafóin iontu thar mar a bhí ag tús na seachtóidí.
Tá táille ceangail caighdeánach ann anois, rud nach mbíodh ann, agus cosnaíonn sé an méid céanna teileafón teileafón a fháil anois áit ar bith sa tír. Tá deireadh beagnach leis an moill a bhíodh ann teileafón a fháil. Ag an am sin d'fhéadfaí a bheith ag fanacht ar feadh dhá bhliain le líne teileafóin a fháil, fiú le haghaidh gnó. Tá an fhadhb sin sáraithe sa chuid is mó den tír anois ainneoin go bhfuil ceantair áirithe, ceantar Chonamara agus ceantar an iarthair i gcoitinne ina measc, go mbíonn moill mór fós ar dhaoine ag fanacht ar theileafón.
Tá feabhas tagtha ar an treallamh leis. Tá cothromas bainte amach againn go bunúsach ó thaobh treallaimh de ach níl sé sin ann i bhfad. Ba i mbliain 1987, sé bhliain ó shin, a cuireadh deireadh leis an malartan láimhe deireannach i gContae an Chlair agus san áit a bhfuil cónaí orm féin bhí orainn fanacht go dtí Méan Fomhair 1986, sé sin seacht mbliain ó shin.
Tá feabhas mór ó thaobh cúrsaí táillí de. Cinnte tá feabhas mór ann, go mórmhór ó thaobh an mhí-chothromais damanta a bhíodh ann sa chaoi a bhíodh na táillí á ngearradh ar na réigiúin.
There have been major changes in the balancing of charges between the regions. When I and others instituted a campaign in an effort to have telephone charges rationalised we were told that things would remain as they were, that those who were privileged to have unlimited local calls to 400,000 subscribers would continue to have that privilege and that those who were confined to 1,000 local subscribers, where every call is a trunk call and paid for by the minute, would be left to rot.
Last year a major step forward was taken. There was a major extension of the local call areas, particularly in those worst affected rural areas. For example, Clifden, which had 1,500 local call subscribers available to it suddenly had access to towns like Westport and Galway which were of major economic importance to them. For the first time they enjoyed the privilege that so many people in the big centres of population take for granted, of being able to ring their county council, livestock office, hospital, tax office and all major services for the price of a local call. There are lower costs for trunk calls and a reduction in the cost of international and eircell calls. The lower cost of trunk calls is proportionately more important to people living in rural areas because it is well known that they make more trunk calls than those living in the main urban centres. For the first time, a principle was conceded under the new package which we enunciated at the beginning of our campaign, the recognition of the principle of a universal tariff for the whole country. A major new development has been recognition of the principle that there could be a similar charge for all calls from any part of this island to any other part at weekends. That is making rational use of technology because, as everybody knows, the cost of making a call relates more to time than to distance. There is also in rural areas for the first time the extension of free telephone services to helplines. Until now people had to pay trunk call rates to avail of the helplines because they were outside the code area in which the service was based. If the service happened to be based in the capital city one was talking about paying the highest trunk rate. Next April there will be a further 25 per cent decrease in A rate trunk calls.
We made progress in the last few years but much remains to be done by the main supplier, Telecom Éireann. Most of the necessary work will be done by only one supplier and I will refer to this later in the context of competition. We want to ensure that connections are provided to all subscribers without delay, irrespective of location, and that all areas have an equal service. The more isolated parts of the country have not yet been provided with a mobile telephone service. If and when there is competition, companies should be obliged to provide such services not only in the large centres of population but also in small rural areas.
Fibre optic lines must be extended. There will never be two suppliers of that type of equipment. Regional tariff disparities, hidden or otherwise, must be ended. For example, if someone in Dublin has access to 400,000 subscribers at the local call rate people in the country should also have access to the same number of subscribers at that rate.
Hear, hear.
That will not be achieved by the manner in which competition is being approached. Even in the US there is no duplication of the basic hardware. The idea of competition, of operating two parallel companies whereby two lines would be connected to each house, is a myth. Regarding competition, it is usual for one company to provide the hardware and for another company to lease the use of that hardware to undercut the charges of the first company. If such competition emerges a different rate will be charged for telephone connections in rural areas, they will be forced to do so because of economic market forces.
Efficiency is needed in Telecom Éireann; it must adopt to new technology. There must be efficiency audits on the main supplier and the ground gained in the past few years must not be lost through clapping ourselves on the back and believing we have completed the work. Technology is changing rapidly and there will be a need for continued major investment in telecommunications infrastructure if we are to compete in the modern world. What has been achieved during the past 20 years is spectacular but there will be similar spectacular changes in the next 20 years which will require major cash investment, which can only be made by the major supplier if the future revenue of that supplier is secure. The Opposition spokespersons have not advanced a clear-cut measure by which they will secure that investment. We must ensure that we guard against cherry picking. At present Aer Lingus is in crisis because when it was decided to introduce competition in the area of aviation not enough time or thought was given to creating a level playing pitch between the major and the subsidiary suppliers.
If competition solved all ills, why is it only in the past two years that the banking sector changed to provide more reasonable opening hours?
(Limerick East): They had no competition.
There was a cartel in the banking sector.
There is competition now.
Competition in such circumstances does not necessarily ensure a better service to the consumer.
Or a cheaper one.
We must be wary of providing expensive duplication in what will always be a small market of five million people. We must also ensure that we do not create false competition, what I call the train seat analogy. For example, a train company might operate a Friday evening service to Cork and another company might block book seats on the train at a knock down rate. The original company would then be forced to sell the seats to compete with the second company and bear the brunt of the cost. That is not real competition, it is make-believe competition and I would not like to see it in the telecommunications service. There is room for real competition. I have never objected to such competition being introduced to certain provisional services, but competition for the sake of competition — to accommodate some new fad — does not solve the problem.
I was surprised that section 4 of the Bill proposes to remove power from the Minister and give it to a director. As a democrat I would prefer a position in which the Minister is responsible to the Houses of the Oireachtas and Deputies are responsible to the people. The section proposes that the director would consult the Minister but that the director would fix the terms. To whom would the director be responsible? Responsibility for such major issues should be vested in those who are answerable to the people — the Minister — who is answerable to the Houses of the Oireachtas and the people.
The Bill proposes advisory bodies. The public are fed up with the establishment of more and more internal advisory bodies. Such bodies are made up of different combinations or permutations of the same small groups of people.
Cumann members.
High quality membership.
Most of those groups represent various sectional interests. That is the position having regard to recent proposals by Opposition parties in respect of suggested advisory groups. It is time we had the guts to make decisions in this House which is answerable to the people. Instead of changing structures perennially, the public services should be effective and efficient. Main suppliers, like Telecom Éireann, must be efficient and we must adapt to new technology. The necessary investment must be made and secured so that the money borrowed can be repaid. We must adhere to the principle that everyone has an equal right to technology and the same connection fee should be charged irrespective of where people live. Everybody has a right to a telecommunications service that provides an equal tariff structure and does not impose additional charges in respect of distances.
Speaking in Brussels on 21 October 1993 the Competition Commissioner, Mr. Karel Van Miert, said that the success of the Single Market depends increasingly on essential public services, such as telecommunications, transport and energy. He stated that it is imperative to open those, mostly State monopolies, up to competition. He went on to say that the survival of those State monopolies in essential public services was an anachronism in a Single Market based on free and fair competition.
What Mr. Van Miert said represents the thinking of the European Commission and indeed is representative of the thinking in most countries in Europe today. Interestingly, Mr. Van Miert might in European political terms be described as left of centre. His thinking is a long way from that of proponents of outdated socialism whom we still often hear in this House and in this country.
The Commission's thinking in regard to the competitive position of these essential public services, particularly telecommunications, is a long way removed from, and a long way ahead of, the thinking of the Government espoused by the Minister and Department of Transport, Energy and Communications.
I read with some disappointment, but not with any great surprise, the speech of the Minister on this Bill last week, who, in his usual "boot boy" approach, still seeks to justify what he and Telecom Éireann did last May, when they both seriously misled the public about the nature of the so-called "rebalancing" of charges announced at that time.
Even as recently as last week the Minister continued to make the mistake of identifying himself 100 per cent with Telecom Éireann, with its corporate interests and its propaganda, even though the Minister is supposed to be the regulatory authority and is supposed to exercise an objective independence of Telecom Éireann, which of course from the time he assumed office he has failed to do.
That is not true.
The Minister is now reduced to boasting that the bills of some telephone users will actually decrease because since 1 September people are using their telephones significantly less. According to Telecom Éireann, both the number and the duration of calls have declined since that date. The Minister seems to see this as some kind of political and commercial triumph. He and Telecom Éireann must be the only people in the world running a commercial service who see themselves as a success when, by their own incompetence and deception of the public, they induce their customers to use their services less. What private company could possibly run on that basis? I know of no company chairman who would boast that his public relations department mucked things up so much that it succeeded in diminishing the sales of the company's product by 8 per cent.
We have heard all this before but let us say it again: telecommunications is central to Ireland's future. Access to advanced, reliable and inexpensive telecommunications is essential for the development of the next century's information-based industries. It is not sufficient simply to offer services like those of our neighbours and competitors. Rather we must take the lead in providing innovative communications services to bring industry to Ireland, and it is primarily the private sector with its interest in increasing market share of profitability which would provide the speedy innovation we require. Ireland cannot be among the last to develop and implement innovative infrastructure merely because we have a relic of times past in the form of a State-owned, monopolistic telephone company of a kind so derided by Commissioner Van Miert.
To compete with our larger trading partners we require a governmental structure which encourages competition and innovation, not one which spends its time trying to protect its own protégé The European Commission has been at the forefront in promoting communications competition. Our neighbours in the United Kingdom have gone even further than the Commission in opening up their country to competition at all levels of service, including the local telephone service. It is no coincidence that the United Kingdom is experiencing the most rapid development of new services in Europe while seeing its telephone costs drop.
As a direct result of living in a more competitive Europe, Telecom Éireann faces the prospect of tracking its sister State company, Aer Lingus, in a downward spiral if it does not change its approach. It is frequently less costly and more convenient in terms of schedules to reach a great many international destinations by flying Aer Lingus to London and there changing to a flight in a much more competitive network. In that way Aer Lingus merely acts as a ferry to London. Similarly, it is less costly for many large Irish firms to export their telecommunications traffic to London via private lines and to utilise the greater variety of competitive network services there to reach their international destinations. As with Aer Lingus, Telecom Éireann then only makes the much smaller revenues available from the Dublin to London route and, worse, becomes a marginal feeder network within Europe. Telecom Éireann has forecast that it will lose revenue of £200 million on US-bound calls alone over the next five years through this type of by-pass. It is likely that the figure will be higher over all of Telecom Éireann's routes.
We face the grave possibility that Telecom Éireann may reach the same position as Aer Lingus in the not too distant future and that this Government will divert itself around the margins by liberalising services seen as not "threatening" Telecom Éireann rather than by liberalising the entire sector. In a competitive Europe there is no way to isolate and protect Telecom Éireann. We can only protect it by having a vigorous competitive structure in which it plays a full and open part. Only a competitive structure will provide Irish consumers with a greater variety of services at less cost. It is a competitive structure which will increase the overall size of the communications market, making Telecom Éireann a healthier business, much as competition in the US and UK have made AT&T and British Telecom, both formerly monopolies, healthier businesses.
What is lacking from Fine Gael's Bill is a clear call for competition. Merely doing away with the monopoly provisions of the Communications Act of 1983 is not enough. Rather, we need legislation where competition is the presumption and monopoly the anomaly, or as Mr. Van Miert calls it, the anachronism. We need a governmental structure, much like our friends in the US and the UK, where innovation and competition are encouraged by a governmental regulatory authority. We need a structure within which problems of competition are resolved within a framework designed to promote and protect competition, rather than the unsatisfactory position we now have in Ireland. Here, at present, potential competitors can appeal only to Brussels or to the courts in the absence of an independent non-departmental regulatory authority which is allowed and encouraged to see beyond the particular political and social problems of the State sector. Governmental whining and obtaining of derogations is no substitute for facing the hard facts of Telecom Éireann's future.
Ireland needs communications legislation which lays out the rules for competition, and the means by which competitors and consumers can make sure that they are treated fairly and equitably by Telecom Éireann, which will have to operate in a transparent fashion. This is not the case at present. The Fine Gael Bill does not go far enough along that road, but at least points in the right direction. For that reason my party is happy to support it. Like the Minister, we recognise that it has many drafting defects, but they are not important. What does matter is the principle of the Bill, and that is certainly far preferable to the negative, ostrich-like pining for the certainties of the past to which the Government is addicted.
I had an opportunity to consider the speech by the Minister of State and I welcome the markedly different tone between it and the speech delivered by the Minister last week. It is certainly more open in acknowledging that there are serious problems in this area and that they will have to be tackled in a certain way. The main difference between the views of the Minister of State and those of many of us on this side of the House is that he thinks it will be time enough to tackle these problems in some years' time, on some undefined future occasion.
There is a yardstick. There is a goal.
I do not believe that is the case. The problems are a great deal more urgent than that and need to be tackled much more quickly than on the slightly lackadaisical timescale the Minister of State has in mind. However, it should be noted that he acknowledges the existence of the problems and his thinking, in so far as one can deduce it from his speech, seems to be along the lines advocated by the proponents of this Bill and by myself, even though a great deal of time may elapse before he gets to the stage of implementing it.
I remember in 1984 and 1985 making speeches in this House about Aer Lingus which were not dissimilar in their intent from the one I am endeavouring to make tonight. I pointed out that Aer Lingus was crazy to try to preserve the cartel situation in which it then operated and how much more beneficial it would be for the country, the company and its employees if it faced up to the reality of the modern world and accepted that competition was going to be forced on it from outside, whether or not it liked it. I said that that was going to be the way of the world in the future and Aer Lingus should accept it and rise to the challenge and opportunity which competition presented rather than try to keep its head in the sand and hope things could go on as they had for many years prior to that. I suggested that Aer Lingus, which was then apparently a relatively successful company, could face very serious commercial difficulties if the market passed it by, so to speak, and it was unable to cope with the changing conditions in which it would have to operate. Tragically, I was subsequently proven correct.
I had the privilege of being an Independent at that time and recall calling a number of divisions on the question of competition where the result was 165 to one. The fact that I was in a minority of one did not mean that I was wrong, and events have shown that I was not. I think future events will show that the points I am making tonight about Telecom Éireann are correct in so far as the future of the company is concerned. The Government would be well advised to accept at the very least the principle contained in the Bill. As I said, the Bill has many defects — it is not well drafted — but at least it sets out to do something which is useful. This could be done better than the way proposed in the Bill, but the principle is what is important. If there are defects in the Bill they can be remedied by the parliamentary draftsman.
With regard to the regulatory question, it is interesting to note the thinking enunciated by the Minister of State where he said it is proposed to divide the Department in two, the operating part and the regulatory authority part. That reflects exactly the thinking I advocated during the debate on the Irish Aviation Authority Bill recently passed by this House. A similar conflict arose in the case of that Bill. This conflict arises in this case in a very clear way and the Minister of State now acknowledges that, something he did not do during the debate on the Irish Aviation Authority Bill.
The way to deal with this difficulty, which has been recognised and, I think solved in every other country, is to set up a regulatory office which is independent of the Department. The problem cannot be dealt with simply by dividing in two the Department or the section of it dealing with communications. I would prefer to see something along the lines of the OFTEL office in Britain or what has been done in a number of the continental countries in Europe. Nevertheless, the proposal now referred to by the Minister of State is at least a major advance on the situation where, up to very recently, we were told that change could not be contemplated in this respect.
At the end of his speech last week Deputy Noonan referred to an article on telecommunications in the European Community which appeared in the Financial Times on 11 October last. He may not have had the opportunity to develop this point in detail at that time. I am sure the Minister of State has read the article, and I would recommend any Member of the House interested in this issue to read it. The European scenario is very far removed from what is taken for granted here and from much of what has been represented by some of the speeches made by members of the Government. It would be an eye opener to some people to realise what goes on in the real world. One should not assume that the real world is what goes on behind the rather high walls we tend to build around Ireland for our protection or the protection of our semi-State companies. The real world is represented in this article. Interestingly, much of the article deals with Telecom Éireann — the author recognises the crossroads at which Telecom Éireann, in particular, stands and points out the direction in which it will have to move. The article states:
Few Telecom Éireann executives believe that the status quo is viable, even in the medium term. Overseas operators offering businesses call-back and lease line facilities are fast eroding Telecom Éireann's international revenue. To staunch the flow a recent radical rebalancing of tariffs has reduced Telecom Éireann's international crisis sharply, while increasing local charges. But that is only a palliative. Interest charges on 1980's investment are consuming half of Telecom Éireann's operating profit and if margins continue to fall Telecom Éireann's investment plans will suffer and so will the profits which the Government creams off.
The article includes three charts which set out where different countries stand in relation to European telecommunications. Eleven of the countries are members of the Community. I suppose Luxembourg is excluded because it is too small and is not representative. Rather interestingly, Turkey is substituted for Luxembourg to make up the twelfth country. Ireland is shown as having the smallest number of exchange lines and the lowest revenue of the 12 countries. One cannot make any point about this because we also have the smallest population and, unfortunately, a very low level of economic activity. Therefore, that placing is to be expected.
The third chart relates to productivity. All countries are potentially on an equal footing when it comes to productivity. Unfortunately, Ireland is at the bottom of the scale so far as productivity in telecommunications is concerned: it is substantially the worst of the 12 countries surveyed. The next worst after Ireland are Turkey and Portugal. This is a matter which should concern us. Clearly we have problems.
I spoke in this House on a Private Members' Motion which I put down on behalf of my party on 18 May last when the increases in the local charges were first announced by the Minister and Telecom Éireann. I drew attention in particular to the strong view likely to be taken by the European Commission and, if necessary, the European Court about what was being done, which seemed, in European terms, to be of very doubtful legality. That appears to remain the position and the Commission is not enamoured of what has been put before it. It is particularly disturbed that even at this stage no justification in terms of costs has been given for the action that was taken and which came into effect on 1 September. That is unforgiveable and the legal challenges which are likely to take place as a result of what has happened are just as likely to be successful as I believed them to be when I was speaking on this subject last May. I am not aware of anything that has changed the position.
It is very unfortunate that any advances we seem to make in this field, as indeed in so many other fields, are made only because they are forced on us by the rule of law from Brussels. Our Ministers and Departments frequently spend much time and energy arguing against the general rule of the European Community being introduced into Ireland. We have seen many examples of that in the broader social field. Many advances have been made in social legislation and in social welfare legislation that would never have taken place here had they not been forced on us by the European Community. The limited changes and advances that we have seen in relation to the telecommunications industry — and we lag way behind most of the Community in accepting the principles of competition, openness and transparency — have been made because Europe has forced them on us.
It is a cause of great regret that even though the main Directives on the provision of service do not become compulsory and come into effect until June 1998, Ireland saw fit, with some of the other weaker peripheral states, to seek and to obtain a derogation until 30 June 2003. I was delighted to hear the Minister of State say tonight that that did not necessarily mean we would avail of that derogation. That at least represents a healthier approach. We obtained derogations in the past which we did not use and I remember on such occasions announcing at the earliest possible moment that we would not be availing of them. The Minister or the Minister of State should announce now that we will not use this derogation because if Telecom Éireann, which is wholly owned by the Irish taxpayer, holds the view that it has another ten years in which to operate as a monopoly, without any competition, except around the margins and in some limited areas, no progress will be made in this area. We must impress on Telecom Éireann that it should disregard the artificial protections which were negotiated for it, go out into the market place and operate in a way which is fully in accordance with the spirit of competition now being laid down by the European Union and, in particular, by Commissioner Van Miert.
This has been a useful debate and I am grateful to Deputy Noonan for bringing forward this Bill, which we will be happy to support. I presume it will be voted down in the normal way by the largest and most unthinking majority that this House has ever seen. Nonetheless, if some of the contributions that have been made in the debate help to advance, to some degree, the thinking in this important area, it will have been worthwhile.
I wish to share my time with Deputy Michael Kitt.
That is satisfactory.
Politics is an imperfect science. There are no infallible politicians or parties and even Deputy O'Malley would not claim to be infallible. I have great respect from my colleague from Limerick East but I also have a long memory. He recited tonight some of the things he got right in his life and, naturally, he omitted some of the things he got wrong.
I remember the Deputy on one occasion speaking passionately about nuclear energy, contending that it was a magic panacea for Ireland's ills. He put this view forward locally and nationally and no one could tell him he was wrong. He was headstrong and held this view for many years. Many people told him that he was making a fool of himself but nonetheless he continued to make a fool of himself around the country. Eventually, he recanted, went back on his word and took the opposite view.
In regard to family planning, Deputy O'Malley was totally opposed to it and said it was a licence to fornicate. Subsequently, he changed his mind on this matter. The Deputy is not infallible. He has no right to get into his pulpit and deliver homilies in this House about the action he took in regard to various matters when he was in power. The Deputy's word has some weight in this House because of his record, and I admire him for that, but like the rest of us he has also been wrong on occasions and if I had time I would refer to the Deputy's record in Limerick East. However, I am not here to denounce Deputy O'Malley, I am here to contribute on another subject.
Does the Deputy ever make a speech without referring to me?
The Deputy is not slow to throw punches at me when I am not in the House.
The Deputy probably likes the subject matter.
I usually only criticise the Deputy when he is here to reply to me. I would not go behind his back and say something that I would not say here. I will always speak my mind in this House.
I am disappointed also with my other collegue from Limerick East. We seem to take opposite sides in many debates although I have much respect for him also. However, this Bill reeks of opportunism. It is being put forward by Deputy Noonan as a panacea for the difficulties in the telecommunications industry. Deputy O'Malley touched upon some of the volatility and competition that exists in this area. We are a small country with a scattered population giving a service to people in remote areas of our cities and towns.
This Bill has flaws, the major one being that it is an opportunistic attempt by the Deputy's party to play a relevant role in our society. Fine Gael is seeking to have some relevance in our society at present but this Bill is no favourable advertisement for the party. If the Deputy's party wishes to do good work in our society it should not adopt this "flash in the pan" approach. It should help to find solutions to our problems rather than engage in the gimmicks and stunts that we have seen in this House.
The approach in this Bill is too simple. The problems in this country cannot be cured by a Private Members' Bill. Privatisation is not a magic wand to deal with the ills in our society or in Telecom Éireann. The problem is much more complex than that and Deputy Noonan is well aware of this. I have no objection to the company becoming more efficient and more competitive but the problems of Telecom Éireann will not be resolved by this Bill. We must not rush in with simple solutions to complex problems.
In regard to the European dimension to which Deputy O'Malley referred, Commissioner Van Miert was not much in evidence at the time of the débâcle in the Irish Sugar Company; he was silent when many people made large amounts of money from insider trading, using confidential, private, privileged information to enrich themselves. I did not hear one word from Commissioner Van Miert on that occasion. If we are to have a balanced attitude to the problems——
What responsibilities had he for the Irish situation?
——of Telecom Éireann——
He is the Commissioner for Competition.
Surely this is optional competition, that a number of people enriched themselves at the expense of the Irish public? The Commissioner was silent then, as Deputy O'Malley knows very well when he chose to quote him within the context of Telecom Éireann. I should have liked to have heard of him when we were speaking in this House about the milking of public money——
He was not the Competition Commissioner then.
That is a very convenient answer. Let us have more co-operation in Europe which I would value. Indeed I should like to see that Commissioner take a leaf out of the Telecommunications workers' book, co-operating with other European trade unions to achieve more efficiency. I have been impressed by their attitude in this regard. Let us have more infrastructure, proper planning——
Will Deputy Kemmy move the adjournment of the debate?