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Dáil Éireann díospóireacht -
Thursday, 18 Apr 2002

Vol. 552 No. 2

Communications Regulation Bill, 2002 [ Seanad ] : Second Stage.

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

I apologise that my officials have not arrived yet with the scripts but we thought this debate was to begin at 3.15 p.m. I am very pleased to be able to introduce the Communications Regulation Bill, 2002, to this House. I thank the Deputies, especially Deputy Jim Higgins and Deputy O'Shea – I am sure he does not know either that we are debating this now – for accommodating this important legislation following its successful passage through the Seanad. The main purposes of the Bill are to create a commission for communications regulation, to dissolve the Office of the Director of Telecommunications Regulation and transfer its functions to the commission, to strengthen the powers available to ensure that regulatory decisions are complied with and to provide for the improved management of public road openings for the purpose of laying telecommunications infrastructure.

Before going into the details of the Bill, I will give some background to the reasons for its introduction. The regulation of the communications sector involves a number of important tasks. A key role is to facilitate competition among operators but in a way that protects the public interest generally and also the interests of individual consumers. Another key role is to ensure that obligations imposed on operators in the public interest, such as universal service obligations, are complied with and that quality of service is assured. A further task is to manage and facilitate effective use of scarce and valuable resources, particularly the radio frequency spectrum. These tasks are important, not only because of the benefits they bring to consumers of communications services but also because of the wider importance of the communications sector to economic and social development as a whole. The communications sector has a major role in achieving the economic and social benefits that the information society will bring.

The electronic communications sector has been experiencing a period of unprecedented change. During the 1990s, developments in technology, the Internet and telecommunications services, together with market liberalisation, enhanced the importance of the sector for economic and social development. The realisation that the sector was an indispensable building block for the development of the information society meant that it became an issue of public policy as well as a commercial opportunity. We have seen substantial investment in the sector. More recently we have seen a downturn in this investment and confidence in the commercial health of the sector has been severely dented. Despite this, realising the vision of the information society is a goal that we must pursue in the economic and social interests of the State.

The electronic communications sector remains an important building block for the development of the information society. We need a communications sector which provides competitively-priced products and services to all consumers. This should be done in a way that enables the operators to obtain a reasonable return on their investment so that they can continue to invest in the sector. They must continue to find new ways of meeting the needs of consumers in a cost effective way. I referred earlier to the role regulation plays in facilitating competition. Where there is effective competition among operators the sector will become stronger. This means that a number of operators will be competing against each other to win customers and meet their needs and that customers will be able to switch from one operator to another when they find a lower price available or better quality on offer.

The regulatory framework has an important role to play in making this happen. For example, operators need to have low barriers to entry to the market. They need the ability to get the facilities they need at wholesale level and at a reasonable price to offer services at retail level. However, the reality can be different. It is a feature of the electronic communications sector that operators need to obtain facilities from their major competitor to compete against that competitor. It is from that area that many of the ongoing rows, charges and counter-charges, cases and legal arguments spring.

There is a natural tendency for the major competitor to protect its own competitive position. One of the key roles for regulation of the electronic communications sector is to ensure fair competition among the operators in these circumstances. One can understand how this rivalry could come about – the main player in the market has seen its infrastructure build up over the years and it can find it difficult, despite European directives and instruments, to share in a competitive way with other people who wish to use that infrastructure so that, in turn, customers can get a better deal.

Why do we still need such regulation over three years after the full liberalisation of the sector? There are still such substantial differences in market power between operators that competition could be inhibited if there were no regulatory framework in place. Some operators continue to be in a dominant market position. Abuse of that dominant position needs to be prevented. While competition law and the powers of the Competition Authority are there to address abuses of a dominant market position, these powers are normally only invoked after there has been a claim or evidence of an abuse. The regulatory framework that we have for the electronic communications sector complements competition law by preventing abuse from happening in the first place. This is a valuable tool in a sector such as communications where time is important. We all want to see the benefits of competition and the development of vibrant information society services sooner rather than later, and prevention rather than cure is the way to achieve that.

Another reason we still need specific regulation of the communications sector is to protect the interests of users. We have moved relatively quickly from a monopoly to full liberalisation and competition. In the monopoly era the counterpart to the exclusive privilege of providing telecommunications services was the obligation to meet the reasonable needs of all users in the country, wherever located, at an affordable price. A concern that may be expressed is that new operators may take customers from the former monopoly operator in low cost areas, leaving the former monopoly operator to supply customers in the high cost areas. A related concern is that in trying to address these threats the former monopoly operator could raise prices charged to vulnerable consumers who would not be able to find an alternative supplier at a lower price. However, it is the function of the regulatory framework to protect consumer interests in this area and this role continues, notwithstanding privatisation and liberalisation, and will continue.

The task of regulating the communications sector currently lies with the Director of Telecommunications Regulation. This post was created under the Telecommunications (Miscellaneous Provisions) Act, 1996. The functions of regulating the telecommunications sector and broadcasting transmission systems and managing the radio frequency spectrum were assigned to the Director of Telecommunications Regulation, Etain Doyle, and her office with effect from 30 June 1997. She has been there as long as I have been Minister and she may be there longer, depending on what the electorate says. The functions of the office now encompass three areas: regulation of the electronic communications sector, encompassing both telecommunications and broadcasting transmission systems; regulation of the postal sector; and management of the radio frequency spectrum. The nature of these tasks is changing and they are in many respects becoming more complex.

This is not to say that the past five years in which the director and her office have been carrying out her functions have not been challenging. I pay tribute to the director and her staff for their achievements in meeting the various challenges they have encountered over that period. Among the challenges they have faced were the need to put in place all the necessary measures to enable the successful implementation of the full liberalisation of the telecommunications sector from 1 December 1998, following my decision to bring forward the ending of the derogation on full liberalisation from 1 January 2000 to 1 December 1998. Among the necessary measures were a licensing framework for new operators and establishment of the rights and obligations governing interconnection between Eircom's telecommunications network and the facilities of other operators.

In addition, the director established new licensing frameworks governing the transmission of television programmes by cable, MMDS and deflector systems and, in September 2000, took over functions in relation to the postal sector, in particular the supervision of the universal service obligation of An Post, including quality of service and tariffs.

I will now turn to the reasons we are proposing changes to structure for the regulation of the communications sector. With a number of regulatory bodies having been established to oversee activity in the energy, aviation transport and telecommunications sectors, I initiated a public consultation process on the governance and accountability of these bodies. In the main, that arose on foot of the many debates we had, when the select committee dealt with the Estimates each year, about the fact that there appeared to be a lack of accountability in the operations of Etain Doyle's office. This was not of Ms Doyle's doing. It arose by virtue of the fact that under the 1996 Act she was not obliged to act in an accountable manner. Members will recall that there was somewhat of a fracas at the time and she very nobly agreed – she was under no obligation to do so – to appear before the relevant committee. Since then proper reporting mechanisms have been in place.

There was also frequent informal debates about how we shifted from a position where the Minister was responsible – the Dáil has ultimate responsibility – to one where the powers were transferred to the regulator. We wondered if we were replacing a democratic process with a non-elective way of doing things where no one would have responsibility. The debate on this matter was always interesting and, having discussed it with my colleagues in Europe, I do not believe that any country has resolved it in a completely harmonious fashion. It would probably not be possible to do so.

The one thing of which I was sure on entering office was that the independence of the regulator would need to be protected. There could, therefore, be no stepping over the line. I was determined that this would be the case in all three areas: communications, energy and aviation. I do not believe in interfering in the work of regulators and I have not done so. If I may say so, with a little immodesty, it is somewhat of a credit to me and to our democratic system that we have quickly got to grips with the regulatory system. However, there is a need to shape that system to ensure the duties and rights of the Oireachtas and those of the regulator are clearly laid down.

The consultation process to which I referred earlier resulted in the publication of a policy paper in March 2000 entitled Governance and Accountability in the Regulatory Process: Policy Proposals. The paper, which is in line with the Government's commitment to regulatory reform, contains policy proposals forming the basis of my policy on the regulatory framework for the economic sectors coming within my ambit. Among the issues which I considered, taking into account the comments received in the public consultation, are the composition of regulatory authorities, the terms and conditions governing their appointment, their period of office, decision-making processes and financial and functional accountability of regulatory authorities to the Oireachtas, the Minister and the public. The Bill provides for the implementation of proposals contained in the policy document to which I refer.

With regard to the composition of regulatory authorities, I considered the relative merits and drawbacks of an individual regulator and regulatory board and decided that, as a general rule, a regulatory authority should comprise three members. As stated in the governance and accountability policy document, many of the decisions to be made by a regulatory authority are significant, both for those involved in the regulated industries and for the economy as a whole. This is particularly the case in relation to the communications sector where there has been a substantial growth in the regulatory workload, and the nature of the tasks and rulings which have to be implemented have become increasingly complex and qualitative. The existing legislative framework for telecommunications, which is based on European law, was primarily designed to manage the transition from monopoly to competition and was, therefore, focused on the creation of a competitive market and the rights of new entrants.

The market is changing with ever-increasing speed in terms of market developments, in particular the convergence between telecommunications, broadcasting and IT sectors, evolution in technology and changes in user demand. The balancing of different interests, not only among industry players and between the industry and consumers but also between the short-term and long-term economic and social interests of the State, often requires that difficult judgment calls have to be made. A three-person commission would be in a better position to bear the burden of making such decisions than an individual. This is no reflection on the excellent and most competent performance of Etain Doyle as director. I again acknowledge her achievements in the post and I welcome the fact that the Bill will enable her to complete her second term of office, bringing the benefit of her experience to the commission.

In respect of accountability, the transfer of regulatory functions from Ministers to independent statutory bodies requires that there be clear accountability mechanisms, without compromising, in any way, their functional independence. In relation to the Director of Telecommunications Regulation, a number of provisions to ensure appropriate accountability are in place, either in the existing legislation or through practice. However, the Bill proposes to formally put in place appropriate accountability mechanisms without, as I have said, compromising the functional independence of the commission.

Apart from reforming the organisational structure for the regulation of communications, the Bill provides for the reform of the framework governing access to public roads for the construction of telecommunications networks. The growth of the electronic communications sector in recent years is one of the great success stories of the economy. However, if there has been a downside it has been that the laying of new electronic communications infrastructure has required an unprecedented volume of road openings. Everyone is familiar with this problem, which has put an added strain on traffic in towns and cities. The Bill seeks to ensure that there will be minimum disruption to the public and the environment in the build-out of electronic communications infrastructure.

Under the Bill, local authorities will be given increased powers to co-ordinate and control road openings by telecommunications companies. The new commission will be able to bring about agreements on the sharing of electronic communications infrastructure and impose conditions on sharing agreements. The sharing of electronic communications infrastructure will reduce the need for companies to continually open roads and lay their networks, and make it easier for both new and existing companies to install such infrastructure. This will I hope speed up the delivery of state-of-the-art electronic communications services which are essential for the development of the information society.

I am satisfied that the provisions of the Bill will create a sound economic and regulatory framework within which the commission will work. In framing the legislation and in line with the requirements for introducing new statutory measures, my Department carried out public consultation on the proposals and has had substantial discussions, meetings and seminars with relevant Departments, interested parties and the public.

The Bill is separated into five main parts. Part 1 contains standard provisions covering the Short Title, interpretations, the laying of orders and regulations before both Houses etc. Part 2 deals with the establishment of the commission for communications regulation. Part 3 details the enforcement provisions applicable to the new commission. Part 4 deals with transitional provisions arising from the transformation of the Office of the Director of Telecommunications Regulation into the commission. Part 5 deals with road works.

The objectives of the commission in carrying out its functions are set out in section 12. This is a new provision, setting out in legislation the key principles to guide the commission in its activities.

Section 13 is another important provision, enabling the Minister to issue policy directions to the commission. This provision extends the scope of an existing power in the 1996 Act in relation to the radio frequency spectrum to enable policy directions to be issued also in relation to the electronic communications sector and the postal sector. In order not to compromise the functional independence of the commission, this power to issue directions is limited to issues of policy and must not relate to individual undertakings or persons. The section specifies that a direction may relate to the methods by which licences to use the radio frequency spectrum may be allocated. In addition, the Minister must publish the proposed direction not less than three weeks in advance of its issue and consider representations received.

Sections 28 to 30 provide for the resources and revenues of the commission. The Minister may make advances to the commission and the commission may also borrow money subject to the consent of the Minister and the Minister for Finance. The main provision in relation to funding is the commission's power to impose a levy on the regulated entities, namely, electronic communications providers and providers of postal services. A new provision enables early refund to the Exchequer of surplus income where, for example, highly valuable licences have been awarded.

Part 3, sections 40 to 47, inclusive, deals with the enforcement powers of the new commission. The Bill contains two provisions in particular, which will substantially enhance the enforcement of regulatory decisions compared with the current position. One of these new provisions is based on provisions contained in the Company Law Enforcement Act, 2001, and provides for the imposition of a fine of €1,000 in cases where the commission has reasonable ground for believing that a person has committed an offence under the provisions of a European directive. Where the person fails to pay the fine, the commission may proceed with prosecuting the offence in the courts where, I presume, the fines will be much greater.

The other new enforcement measure is section 46 which provides for prosecution on indictment for breaches of licence conditions, with a maximum fine of €4 million or 10% of the operator's turnover, whichever is the greater. This represents a substantial increase in the maximum penalty for a breach of a licence condition, which currently amounts to €1,900.

I am confident these provisions, which have given rise to vocal complaints, represent a significantly enhanced enforcement mechanism which will enable the new commission to enforce its regulatory decisions in today's rapidly evolving communications sector.

Part 5, sections 53 to 61, inclusive, provide for the reform of the legislative framework governing the opening of public roads by telecommunications operators. In particular, section 54 provides that operators will be required to obtain the consent of local authorities which are responsible for roads in their areas, before opening public roads to lay telecommunications networks. I am satisfied the Bill will seek to ensure that road authorities will be able to properly control access to public highways by telecommunications operators, without unduly inhibiting the installation of telecommunications infrastructure.

In order to encourage greater sharing of facilities among operators and thereby avoid unnecessary disruption, section 58 enables the new commission to bring about agreements on the sharing of electronic communications infrastructure and to impose conditions in sharing agreements. Currently, the director may only intervene in sharing negotiations at the request of one of the parties. The Bill now enables network operators to inform the commission of any negotiations on infrastructure they enter into and empowers the commission to intervene if agreement is not reached.

In conclusion, the communications sector is an important contributor to our objective of being at the vanguard of the information society and electronic commerce. In order to ensure we have an efficient and effective communications sector we need to have a regulatory framework for the sector which will maximise effective competition in the shortest possible timeframe. The Bill will set out a clear accountability framework for the new body in relation to Government, the Oireachtas, industry and the public. The framework for consents by road authorities set out in the Bill should provide for clarity and fairness as well as a consistent approach.

I repeat what I said to Deputy O'Shea just before entering the Chamber. I am sure we will have a robust debate when we come to Committee Stage. It has not been my approach to curtail the debating time allocated to Bills, particularly with regard to the preparation and discussion of amendments. I am very conscious that, in the best interests of ensuring that this very necessary reform is passed, the Labour and Fine Gael Parties have made spokespersons available when the rest of the Chamber appears to be out on the highways and byways and I thank the Deputies present.

(Mayo): I have been pressing for the publication of the Communications Regulation Bill for a considerable period. I regret that the publication of the Bill, which is extremely important legislation, has been delayed until the dying days of this Administration. While I appreciate the Minister's statement, I reiterate the comments I made on the Order of Business that a Bill of this importance deserves far more deliberation than we can give it in this House and that it is wrong that we are expected to take Second Stage, Committee Stage, Report Stage and Fifth Stage in just a few hours.

Initially, when the schedule for this week was drafted, the Bill was to be debated all day because other people wished to contribute on it. However, as the Minister said, they are now tramping the high roads and by-roads on a different mission aimed at getting re-elected to the House in four or five weeks' time.

The heads of the Bill should have been published and the Joint Committee on Public Enterprise and Transport should have held hearings with the various interest groups involved in the communications industry in order to enable them to make observations and present a critical analysis regarding what the legislation should contain. The final draft of the Bill would then be better from the point of view of informed input by the various sectors of the communications industry and other interested parties, including consumer interests.

The heads of the Bill were published in 2001.

(Mayo): The Minister stated there was a public consultation process. I am not aware of how public, intensive or expansive that process was, but my fax is clogged with e-mails from various smaller interested parties who feel they were not consulted.

The Bill attempts to do three things, namely, create a commission for communications regulation, increase penalties for breach of certain offences and provide for the improved management of public road openings for the purpose of laying telecommunications infrastructure. This is not an earth shattering agenda and one could argue that the Minister has missed or is avoiding the opportunity to legislate on other issues of more immediate interest to the telecommunications sector. The Government is legislating to increase bureaucracy and make it more difficult for the Office of the Director of Telecommunications Regulation to get on with its job. The ODTR will get little new real power under this Bill other than minor changes in relation to enforcement. Instead of facilitating speedy decisions, the proposed new compliance rules are meek and meaningless.

The Government appears to have forgotten that European Union telecommunications Ministers have reached agreement on a new package of measures which will increase competition further. With Ireland ranked a poor 27th of 30 developed countries on key types of broadband access, there is nothing in this legislation to facilitate extending broadband throughout the country.

I have tabled amendments on many issues in order to strengthen the Bill. I am tempted to call on the Government to consider withdrawing it because it needs to be comprehensively reviewed. As I said previously, all the players involved in the telecommunications and postal services sector should have their views listened to and not ignored by the Minister and her Department. The Government preaches the merits of an inclusive approach but fails to put these principles into practice when important legislation is mooted.

In considering my comments, I ask the Minister to bear in mind the Government's recent consultation document, Towards Better Regulation. If our civil servants applied the principles and practices in this legislation, the Bill would never have made it to the Oireachtas in its present form. For example, the OECD noted in its report, Regulatory Reform In Ireland, that the justification for detailed sectoral regulatory intervention might diminish over time. Towards Better Regulation raises critical questions on page 52 about the ODTR and other regulators, for example, it is argued that strategic policy decisions need to be taken about handling customer complaints in regulated industries, about the accountability of regulators to the Oireachtas and about providing additional powers to the regulators. Why then is the Government championing the cause of better regulation, while the Minister for Public Enterprise is pressing ahead with a Bill obviously oblivious to the good counsel of the OECD which the Taoiseach and the Tánaiste have publicly supported?

And me. They have praised the Bill.

(Mayo): If the Minister supports Government policy, as she says she does, why has a regulatory impact analysis not been prepared on the Bill? If a regulatory analysis was carried out on the Bill, it would probably score two out of ten. Again referring to OECD best practice, we would have had a statement of the views of all interested parties to hand and the response of the Department to their representations. The Minister would have had to table a paper on the alternatives to the detailed prescriptive provisions in the Bill. We would also expect to have a report on how the legislation will be enforced and what problems may be anticipated in achieving compliance. If an RIA was prepared, we would also know the cost of implementing the legislation and the additional resources required by the Department, the DPP and the ODTR. Can the Minister set out the cost compliance burden of the legislation?

The OECD correctly identified weaknesses in Ireland's capacity to produce high quality legislation. The Government's report notes that these weaknesses include the fact that there is still a command and control attitude in relation to regulating behaviour. The Bill is clear evidence of bad legislation which defies the basic principles of better regulation allegedly supported by the Government. I would like the Minister to explain to the House how her Bill co-exists with Government policy and the OECD's recommendations for better regulation. I would have thought the Minister would have introduced amendments on Committee Stage and would have carried out radical surgery on the Bill. The Bill needs accident and emergency attention and it should not be left on the Government trolley. What is needed is a revitalised and relevant Bill, not one which is jaundiced and overly reliant on prescriptive medicine.

In the Seanad the Minister attached much emphasis to policy directives. She alluded to them again today. As the entire Government strategy on telecommunications and postal liberalisation derives from EU directives, can the Minister clarify what additional policy directives she has in mind? Unless the Minister can clarify her intentions, operators might be forgiven for assuming she will take decisions in an ad hoc manner.

The operators would be forgiven if they thought the Bill encouraged them to influence the ODTR by persuading the sponsoring Minister to issue appropriate guidance. Instead of facilitating market certainty the Bill seeks to provide a parallel regulatory regime which all concerned will no doubt seek to influence and circumvent. I am also puzzled by the fact the Minister can, in addition to the power to issue policy directives, block radio spectrum regulations made by the ODTR. Why is it necessary to have both the authority to consent to these regulations and to give policy directives on the same subject? If the Minister's aim is to speed up the making of licence schemes, she is doing the exact opposite. The Minister's successor in the Department should be encouraged to read "The Better Regulation Report" before policy directives are issued.

I would like to probe the Minister regarding her views on the draft EU directive which will further liberalise the internal market for postal services. How will this directive impact on An Post and what are the implications of the directive for the ODTR? The Bill needs to be amended in order that the objectives of the ODTR can be expanded. I propose an amendment to that effect in section 12 to promote competition in the postal sector. In the Seanad the Minister relied on the argument that An Post is responsible for the efficient running of the postal service. However, the track record of public utilities is not good in terms of efficiency. It is a key regulatory function to promote efficiency so that the public gets good services on time and at reasonable prices. The ODTR, for example, caused Eircom to sharpen its act on a range of issues. The public expects the same for An Post. We should remember that utility costs are input costs for all other businesses. It is critical for the well being of the economy and for jobs that utilities are run as efficiently as possible. The issue for the Government is whether the ODTR will have the same significant influence on the postal sector as it has on the telecommunications sector.

While the legislation has some potential to provide the ODTR with the necessary legal powers of enforcement to protect the rights of consumers and to provide the regulatory backdrop against which openness, accountability and competition can prevail within the telecommunications market, one of the main aspects of the Bill which undoubtedly causes concern is enforcement – in other words, the powers of the regulator to force the telecommunications operators to comply with the terms and conditions of their licence. Earlier versions of the Bill attempted to give the regulator some additional powers to compel companies to obey their licence obligations, which was a specific recommendation of the OECD in a report on Ireland published in April 2001. However, these powers have been considerably reduced in the Bill and unfortunately as a result only limited changes are made to the present regime. The Bill still relies on the ultimate threat of criminal enforcement. The ODTR can take cases and the maximum fine is enshrined in the Bill. More serious prosecutions can only be taken by the DPP. However, the DPP has indicated that the office has limited resources to take on a prosecution on behalf of the regulator. That means we face a real and imminent problem.

Limited resources have also been the experience of the Competition Authority. As a result, whether the maximum fine is defined as 10% of turnover, as in earlier drafts of the Bill, or the new fine in the Bill which is calculated in some cases at less than 10% of turnover for an operator like Eircom, the possibility of a high fine being enforced remains theoretical. One of the biggest problems in dealing with the big service providers is that of intransigence, obfuscation and delay. How often have we seen Eircom thwart the directions of the regulator by refusing point blank to accept her decisions and challenging her rulings in the courts? Because of delays in the preparation of cases, defending cases and the courts backlog, the challenge to the ODTR is not heard for several months. The result is that the status quo remains.

That is exactly what will happen with this Bill. It will still take months to prepare a case and a further considerable period of time to get the case before the courts for a definitive judgment. When one considers the additional time that will elapse before an appeal, it is obvious that the powers vested by the legislation are inadequate. There is also the possibility that it will be open to the culp able delaying operator to comply before the case reaches court. It would be better if the regulator was in a position to put the effort required by the court case into pursuing operators on an inch by inch basis, thereby achieving the same result in a faster time. The only other enforcement provision is the power to bring an operator before the court to comply with its licence. Unfortunately, that adds little to the regulator's current powers and, given the delays in litigation, it is not a practical solution to urgent issues.

This Bill pales into insignificance when one considers the situation in other countries. Those countries allow the regulator to impose fines, but there is no similar provision in this Bill. I understand that one of the reasons advanced for the failure to vest the power to impose fines in the regulator is because of possible constitutional doubts about the role of administrative bodies. However, there is a considerable body of legal opinion which states that there is no constitutional impediment to giving the regulator the power to fine, as this is required under EU law. I understand this legal advice was actually provided to the Minister's Department by the Telecommunications Users' Group last July. Other administrative bodies are allowed to request a payment as a condition for not proceeding with a prosecution.

This particular power is granted to bodies including the Director of Company Enforcement by section 109 of the Company Law Enforcement Act, 2001. These are very clear precedents which should enable the ODTR to impose fines. One must therefore ask what is the legal difficulty in vesting such a power in the regulator and why, therefore, it has been omitted from the Bill currently before the House.

I now turn to the issue of judicial review. The paper on governance and accountability in the regulatory process published by the Department of Public Enterprise recommends that cases against the regulator be taken by means of judicial review. The Supreme Court judgment in the Orange case also supports the approach of using judicial review in the context of specialist regulatory bodies. If this option were chosen, given the inevitable delay in bringing proceedings before the courts, it would put in place a relatively quick and well defined process which should apply to the ODTR in the measure we are now debating.

The Competition Bill, 2001, clause 23(4), shifts the burden of proof from the Competition Authority. Similar provisions such as these should have been enshrined in this Bill to give considerably more certainty to the regulator and to other parties so that important decisions relating to the awarding of licences could not be held up by frivolous, vexatious or tactical litigation. I am at a loss to know why it should be easier to sue the Office of the Regulator than to challenge bodies such as An Bord Pleanála or the Competition Authority. I would like the Minister to address this particular issue.

One imperative should be that the Communications Regulation Bill should clearly and categorically state that decisions of the regulator should stand until the court decides otherwise. While this provision does apply to some decisions such as those about licences, it does not apply to all issues. This is a further defect in the Bill.

I do not want to be entirely negative. The telecommunications industry has waited almost six years for this new legislation. There is certainly a need for greater transparency in our regulatory structure and the policy directions which guide regulatory implementation. The legislation is needed to pave the way for the transposition of the new electronic communications directives which were adopted by the European Council of Ministers just last month. I welcome, in particular, the establishment of a three-person commission. This is a more sensible structure to deal with diverse markets and regulatory issues in this sector and it removes the burden of responsibility from one individual.

Regarding infrastructure, the situation for operators regarding road openings is further clarified. However, the objective of ensuring technological neutrality has been removed from the final version of the Bill and I ask the Minister for Public Enterprise to outline the reason for such a removal. Surely, it is a fundamental objective of regulation in an era of convergence to ensure a level playing field. The EU package of electronic communications directives also reflects this approach.

I now turn to the issue of charges and the high cost of Internet access in this country. Consumers, both commercial and domestic, are at a huge disadvantage from the point of view of Internet access by comparison with their counterparts throughout the rest of the world. When it comes to Internet access, Ireland is the only country of which I am aware where access charges are levied by way of charges per minute. All other countries operate a flat rate monthly charge with unlimited access. The following costs for Internet access in other European countries put starkly into perspective just how disadvantaged consumers are in this country. The flat rate for the UK is €21 per month; in Spain it is €17 per month; in France it is €15 for 50 hours; in the Netherlands it is €119 per month on an ISDN line; and in Portugal it is €29 per month.

The Internet access charge per minute operated in this country is hugely prohibitive. The Minister and her Department have failed to prevail on Internet providers to introduce the same flat rate monthly charge that operates in every other jurisdiction. One must be fair to Esat which some time ago introduced a flat rate "Esat Surf No Limit" scheme, but the company had to abandon it because it had to pay Eircom for the service on a per minute basis. It was quite obvious that it was not viable in those circumstances.

The Minister's recent announcement in relation to the roll-out of broadband on a three-tier basis is welcome. However, because of the per minute charge and the failure to introduce a monthly flat rate charge it will be of very limited value to either domestic or small business customers. Broadband will be significantly faster from the point of view of downloading than the current downloading by ISDN. There is no broadband in this country at present except Eircom market broadband, but what Eircom is providing is ISDN which is only 130% faster than a home line. As a result, people will not surf the Internet because they simply cannot wait for up to 30 minutes to download at a rate of 15p per three minutes.

If one is setting up a business, for example, it costs approximately €3,000 to run an Internet advertisement. However, if one does not have a catchment of users staying on-line, one's business simply will not get going and one will not have a catchment of interested customers if the per minute charge remains in place. Therefore, business is at a huge disadvantage, small businesses are being stifled and huge opportunities are being lost to create new jobs. The cost to business of availing of broadband will be approximately €2,000 per month. How can any small business afford to pay €24,000 per annum just to avail of broadband?

Essentially, the Minister's proposal will be of significant advantage to large businesses but of little benefit to small businesses, the establishment of new small businesses and domestic consumers. The reason that fast downloading is so important is obvious. Websites and pages are getting larger and larger. Therefore, if we want to enable people to have more Internet access, they must be enabled to download quickly and not have to wait up to 30 minutes to find what they want on-screen.

The plans outlined by the Minister are also found wanting in that they will not bring broadband to local exchanges. The result is that it will not get out to the small consumer, which should be the ultimate objective, because the ordinary telephone lines do not have to be upgraded. Essentially, there will be a direct feed into large companies. It is a pity the Department has not prevailed on Eircom to connect to local exchanges. This cannot now be done because Eircom has been fully privatised and is, therefore, beyond the control of the Minister and her Department. A way must be found to make these fibres available to small users. There is huge employment potential if broadband is available to the small business sector. This is vital in every way. It is vital from the point of view of sustaining population, providing high levels of education and enabling high earners to live in remote areas. If people in remote areas of the west have access to broadband they can then have direct communication links with any part of the world.

I have an observation in relation to section 59 of the Bill which deals with the felling of trees. I have examined this section and there may be a constitutional issue in relation to the rights of private property owners. The ESB is a State util ity and has powers to enter private land but Eircom is no longer in public ownership and I doubt if a private company has the right of access to private property as proposed in this Bill. The provisions in sections 59 and 60 could be subject to legal challenge and could well be deemed unconstitutional. We will be a lot wiser when these sections are tested in another forum.

Tá áthas orm an seans a bheith agam labhairt sa díospóireacht ar an mBille tábhachtach seo, an Bille um Rialáil Cumarsáide, 2002. Tá sé ráite agam cheana go bhfuil mé toilteanach cabhrú leis an mBille seo a chur tríd an Dáil chomh tapaidh agus is féidir ach tá gnéithe áirithe den mBille ag déanamh buartha dom. Cuirfidh mé an bhuairt sin os comhair an Aire le linn na díospóireachta.

I welcome the opportunity to address the House on this important Bill. I am favourably disposed to facilitating its early passage. Nonetheless, there are aspects to the Bill which concern me and I ask the Minister to respond to these concerns.

The final objective of regulation is to provide fair and open competition so that the consumer can avail of the optimum range of services at the most competitive prices. The Minister's proposed amendment to delete section 35 appears to be at variance with the fundamentals of regulation. Section 35 deals with co-operation between the Commission for Communications Regulation and the Competition Authority. The section deals with three main areas. The Commission for Communications Regulation and the Competition Authority may, where either body considers it appropriate, defer to the other body in respect of consideration of any matter which is regulated by both the commission and the Competition Authority.

The Commission for Communications Regulation and the Competition Authority shall consult with the other body before taking any decision or action in relation to the communication network operations or any category thereof which may reasonably be regarded as involving action which the other body may also be entitled to take and shall take account of any opinion expressed by the other body on the matter. The Commission for Communications Regulation and the Competition Authority may share in confidence any information received by one of them from the other body for the purposes of this section and the other body shall, subject to any requirement of law, protect the confidentiality of that information.

The Forfás report entitled Broadband Investment in Ireland – Review of Progress and Key Policy Requirement states in its summary of key policy requirements that creating regulatory certainty is the key to attracting the required broadband investment from operators. It states that the passage of the Communications Regulation Bill in early 2002 is critical to this and should be amended to clarify the relationship between the proposed commission and the Competition Authority. It seems incredible that the Minister inserted such a section and now proposes to take it out, albeit that section 35 is still woolly and lacks clarity in regard to this vital relationship. Surely regulatory certainty requires more than one body deferring to the other when any matter is regulated by both? One body should consult with the other before taking any decision or action in relation to communications network operators or any category thereof which may reasonably be regarded as involving action which the other body may also be entitled to take and shall take account of any opinion expressed by the other body on the matter. This provision is not categorical and would lead to confusion.

The matter of sharing confidential information seems in this era of transparency and accountability to be a rather dubious proposal. While I understand that the section is to be deleted in favour of the provisions of the recent Competition Bill, does the Minister propose to leave this vital area unresolved with the undoubted adverse consequences to very necessary investment by broadband investors?

I look forward to hearing the Minister's assurances on this issue. This question is not just in relation to the commission and the Competition Authority, it can also arise in the area of broadcasting. The issue of where the responsibilities and rights of the Competition Authority end and the responsibilities and rights of the other body begin requires clarification. I find it extraordinary that this is being deleted from the Bill—

Because of the Competition Authority.

—and I believe that neither solution is the best one for the areas which exist on the margins and where there could be real conflict as to which agency is responsible.

The second issue raised in the Forfás report is the matter of creating regulatory certainty and increased fines for non-compliance or breach of licence conditions. It is very necessary that the regime of increased fines is such that will enable fines to be imposed quickly so that any competitive advantage to the perpetrator can be removed. Under the provisions of this Bill a summary offence under this Act, other than under section 54(2) which deals with the opening of public roads for the establishment of underground electronic communications infrastructure, may be prosecuted by the proposed Commission for Communications Regulation. It is my understanding that an offence on indictment must be referred to the DPP and the DPP has indicated that the office has very limited resources to take a prosecution on behalf of the regulator.

I understand this has also been the experience of the Competition Authority. Where the prosecution of an offence on indictment may not be dealt with for years, this is justice denied to compliant operators and, ultimately, consumers. It can result in compliant operators going to the wall, thereby contributing to excessively dominant positions in the marketplace. Has the Minister any proposals to ensure the prosecution of offences on indictment under the provisions of the Bill, when passed, can be expedited? If there are no such proposals, there is a huge deficit in regard to regulation certainty, which is so necessary to attract much needed investment.

One of today's newspapers reported that the Director of Telecommunications Regulation has drawn attention to this issue.

What is the issue in order that I can be clear?

An offence on indictment has to be referred to the DPP.

That is true in regard to any Department.

Yes, but we are dealing with a specific issue and justice can be denied to compliant operators if there is a long delay. I have been given information suggesting some files referred by the Competition Authority to the DPP's office can remain there for three or four years. I am concerned that it will take a long time before large operators come to court and fines are imposed. Their competitive advantage due to non-compliance would be a very serious factor to smaller compliant operators. There needs to be a mechanism whereby offences on indictment can be dealt with more rapidly. This legislation will be useless if there are long delays before cases get to court.

The third key element to regulation certainty according to the Forfás report is to empower the regulator to introduce a flat rate interconnection package to enable competitive flat rate Internet access. This issue is probably the most central from the consumer's point of view. The case of carers or persons with a disability in the home has been presented to me. The people concerned are tied to the home in many cases and consequently represent a group which can benefit greatly from spending much time on-line.

In the United Kingdom being on-line all the time can cost some €40 per month on a fixed charge. In this country a person wishing to be on-line all the time would need to pay in the region of €750. Obviously, this is intolerable in terms of the equal access of European citizens to be on-line all the time. This differential of 49 to one in the cost of being on-line all the time affects not only carers and persons with a disability, but also has to be an enormous factor in discouraging those who have yet to avail of Internet access. It contributes hugely to something that should be avoided at all costs, that is, the development of a division in society between the information rich and the information poor.

I quote from the Government's newly launched information society action plan: "inclusion to ensure that our development as an information society is inclusive and builds on the potential of ICTs to address issues of disadvantage and inclusion". By failing to provide for flat rate access to the Internet the Minister is, in effect, opting for a policy of non-inclusion. Deputy Higgins has tabled an amendment on Committee Stage in this regard and I have tabled one on Report Stage. The hopes and aspirations of all those who look to the day when competition in the Irish market will encourage telecoms operators to offer a flat rate service are not matched by the failure of the Minister to provide additional powers for the regulator to mandate operators to offer flat rate services. The Minister is flying in the face of the urgings of the State's own industrial policy agency, Forfás.

Competition is now quickly dropping away at the consumer and micro business end of the market. Last week BT announced it was planning to pull its Irish subsidiary, Esat, out of the consumer and small business markets. The question arises as to who will drive competition in order that Eircom will make flat rate offerings when Esat has left the marketplace. The Minister should consider the consequences of her action in this central and vital area for carers, the disabled in the home, those seeking second chance education on-line and many others. This is the continuation of a policy of exclusion rather than inclusion regarding the information society.

The Minister is quoted as saying the ODTR needed to be expanded because of the huge burden of work. I do not doubt that this is the case, but have some observations. Why has the Minister opted for the dissolution of the Office of the Director of Telecommunications Regulation? This office could have been expanded by supplying additional staff as necessary. Does it necessarily follow that three commissioners will operate more efficiently or effectively than one Director of Telecommunications Regulation? Either a director or three commissioners will delegate tasks but retain overall responsibility for carrying out statutory functions. Is there not an inherent danger that a group of three may prove to be more indecisive than one person in overall control? I favour the slimmer model at executive level. In spite what the Minister said, on what basis does she justify her confidence in the commissioner model?

The Minister spoke about convergence. The idea of convergence was more prevalent a few years ago, but has since receded somewhat. This refers to the convergence of broadband, the Internet and telephony. People talked about having one instrument that would serve as television set and telephone as well as providing Internet access. This brings me back to a problem similar to the lines of demarcation between the proposed Commission on Communications Regulation and the Competition Authority. Some of the responsibility for convergence rests with the Department of Public Enterprise, which has been delegated to the Director of Telecommunications Regulation. However, responsibility for broadcasting rests with the Department of Arts, Heritage, Gaeltacht and the Islands. We will not have a one-stop-shop approach to convergence.

Through the new commission, the Minister for Public Enterprise is moving ahead to deal with two aspects of convergence, the Internet and telephony. However, responsibility for the broadcasting aspect rests elsewhere. This is not effective or efficient. This is an issue to which both Ministers should address themselves to come up with a complete package. Responsibility for convergence should rest in one place.

I welcome the provision in the Bill regarding road openings. However, there are problems that cannot be dealt with by one Department. For instance, roads are opened up for the provision of gas supplies, electricity, water, sewerage and cable television, but an overall authority is required to deal with this problem comprehensively and in a co-ordinated way. In new housing estates, one duct should be provided through which a variety of cables can be inserted. While the present situation is unsatisfactory, a step forward has been taken by placing responsibility on telecommunications companies to seek the consent of local authorities. I compliment the Minister on that move.

On a point of information, I understand that other utilities will be using the legislation as a framework for their contacts with local authorities. I fully agree with the Deputy that this is the most bothersome part of providing new utilities. My Department, together with the Department of the Environment and Local Government, is laying out the provision of a single duct system. There has been agreement on that so it would not require legislation. It is a matter of consolidation. I apologise for interrupting but it was for information purposes.

I thank the Minister for that information and I am glad to see that progress is being made on that important issue. Another issue that has gone off the boil is that of third generation licences. It seems that the various telecommunications operators do not have the same enthusiasm for such licences as they did a couple of years ago. I am not sure where that matter stands at present and perhaps the Minister will provide us with some information when she replies.

The Minister previously published a Bill concerning shared infrastructure but the legislation was withdrawn. She is approaching the subject here in a somewhat different manner. I am not satisfied with what is contained in the Bill because while there will be consultations between both companies, the commission may intervene if agreement is not reached. Intervention is all very well but it does not allow for direction to be given by the commission and there is no indication that the commission may arbitrate. Consultation has not resulted in much happening during the time it has gone on. There is a need to strengthen this provision.

We all come across cases in our constituencies where, for instance, an application may be made for a new mast. The argument may be made that if such facilities were shared there would be no need for a second mast. There is an indisputable case, in terms of prudence and good sense, for one mast to be shared by two operators. If the operator who owns the mast is being obstructive and unhelpful to a properly licensed operator who has a valid case for extending the service, there should be some means of concluding the matter. It is an area of great aggravation, not alone for telecommunications companies but also for the public. I would like to see something more definite included in the Bill concerning this point, if it is possible to do so.

The postal service and the radio network are among the areas that now rest within the ambit of the Director of Telecommunications Regulation. I wish to begin with the telephony sector. When the office of the ODTR was established, the State was still an operator in the telecommunications sector, but privatisation took place under the Minister's stewardship. The State is neither an operator nor a regulator in that area now. Given the strategic importance of the telecommunications network, not just economically but also socially, is there not a case for keeping that part of the regulation within the State framework? The State is no longer an operator so there is no conflict of interest.

Yes, I see the point.

The operation of this important area should be more answerable to the Oireachtas than will be the case under the provisions of the Bill when enacted. That point struck me as the debate continued and I would like to hear the Minister's observations on it when she sums up.

The postal sector was drawn to my attention by one of my colleagues, Deputy Stagg, who tabled a parliamentary question on the licensing of couriers to ensure the safety of their mail. I was surprised by the Minister's reply which effectively said that this type of activity is not subject to the national regulatory authority. I am talking about courier services in the State. The liberalisation of that sector, including weight limits, means that the regulation of postal services will diminish in the context of the commission's establishment. For all that, however, this issue needs to be addressed. European agreements are in place to ensure competition within the context of a regulated body, such as An Post in this case. However, Deputy Stagg tabled the original question about the safety of mail, of which we should all take cognisance.

The most important issue I have raised in this debate is the introduction of a flat rate for Internet access and the arguments in favour of it are irrefutable. I have expressed concerns about the conflicting, rich and poor aspects of the information society that are developing in society. Those matters are of grave concern to the Labour Party and I am sure they are also of concern to the Minister. When I worked as a teacher I can remember seeing how articulate and literate children were who came from homes where books, magazine and newspapers were available. In the interim, there has been an expansion in the volume of audio, video, Internet and other IT material available in public libraries whose links with schools have been of great benefit to children. To a large extent, however, this represents a replacement of the reading activities that went on in the past.

Yes, it does.

If children do not have access to reading material in the home they will be at a disadvantage. One of the positive aspects of digital terrestrial broadcasting is that it would enable RTE to provide limited access to the Internet. That is part of a solution, but digital terrestrial television is now on the back burner and I fear it will be a long time before there is any development in that regard. My point is that if children are disadvantaged in this way from the very beginning, they will not make up the lost ground when they get older. I have already alluded to the second chance education aspect. Many are now upskilling through various courses, but there is still a particular role which the Internet fulfils. It allows people to add to their knowledge and access a great deal of material without having to purchase books. This can supplement and enrich the courses being provided and give people the opportunity of making good the loss which occurred earlier in their lives.

Everybody will acknowledge the valuable role of carers, many of whom have little or no financial provision made for them. A person looking after a disabled person or a senior citizen will have opportunities at various times of day or night to avail of the Internet. Those in that situation should be helped in every way possible as should disabled people or others who would benefit. Those suffering from a particular illness should have the opportunity to go on-line and, perhaps, receive relevant information on their illness. I am disappointed there is no provision to allow for the provision of flat rate access and, even at this late stage, ask the Minister to consider changing the Bill in that regard.

I thank Deputies O'Shea and Jim Higgins for their interesting contributions to the debate on the Bill. Deputy Higgins asked how many responded to the public consultation process. There were some 220 respondents. I was very pleased with the response. There were several meetings with representative bodies, including IBEC, the Internet consumers' group and various others. I had about 25 meetings in all. There was also a seminar jointly organised by IBEC and my Department involving many of the key players. There was a huge consultative process.

The Taoiseach, the Tánaiste and I met representatives of the OECD about one year ago. They reflected on my policy document of the year 2000 mentioned in their report and public statements at the time as being thoughtful and refreshing. They used some of it in the context of what they were putting forward.

Deputy O'Shea referred to the matter of responsibility for convergence which is provided for in section 12(6) of the Bill. The licensing of couriers and the safety of mail entrusted to them is not really a matter for the Bill. Licences are issued by the Department of Enterprise, Trade and Employment. While it is an issue, it is not one which comes within the responsibility of my Department.

Both Deputy Higgins and Deputy O'Shea referred to an apparently widespread impression of delays in the office of the DPP, who says he has limited resources. Any crime which is indictable is referred to him. Breaches of a serious nature should be indictable. Most firms wish to conduct their business in a proper manner and avoid any breach of the law.

Deputy Higgins referred to the regulatory impact of the Bill. I have already mentioned the consultations we had with the OECD, whose recommendations are being implemented through the Bill. With regard to delays in bringing prosecutions, the Bill represents a substantial improvement on the current situation.

The reason for the deletion of section 35 is that the Competition Authority Bill, which also included this provision, was enacted last week and it would not be appropriate to have it duplicated in this Bill. However, the provision for co-operation will remain.

On the issue of the lopping of trees and access to land, the Attorney General has approved the Bill and not raised any constitutional issues in that regard. As Deputies are aware, any Act can be challenged.

With regard to the reference to Ireland's strengths, the OECD referred to our emphasis on market openness, awareness of the need for continuing regulatory reform, responsiveness and flexibility, transparency of regulatory decision making and extensive use of public consultation. It picked these out as our strengths in the regulatory regime. It was in that context it praised our 2000 document on which the Bill is based. I share the concern expressed by Deputies that there would be inequity in Ireland in terms of Internet accessibility, which would lead to what has been termed a "digital divide", which is a catch phrase that has developed, especially in the United States.

This is the new learning. Young people are wonderful with Internet access. They have no fears and inhibitions and accept that they should, as a matter of right, be able to use the Internet and get information. Schools have an excellent array of educational aids in the information technology area. Huge sums of money have been made available, some of it sponsored by companies and the Exchequer.

The same considerations apply to second chance education covering those who, for one reason or another, were unable to avail of a structured and formal education. They are able to be masters of the world. Knowledge is power and armed with information and knowledge, people are the equal of others. The old barriers of class and education can be quickly put to one side if people have the potential to use information technology, which is easily learnt, and then grow with it and gain and access information from all over the world. I constantly meet people whose lives have been hugely enriched by this revolution.

The House will be aware of the CÁIT initiative. Approximately £4 million has been allocated under it last year and this year. Grants totalling between approximately €60,000 and €150,000 were allocated to groups throughout the country last year and again this year. They cover access to women's groups, early school leavers, those in areas of disadvantage and handicapped people. I met a carer's group that submitted an application. The Leas-Ceann Comhairle is aware of a very positive group that applied in his constituency. An outside body assesses submissions. These groups have spread knowledge of the Internet and the means by which it can be used.

The CÁIT initiative has been very successful. It reminds me of the community employment projects, with which I was involved when I was a Minister of State with responsibility for labour affairs. They also reached out and did good for the community. Like the home school liaison scheme introduced in 1990, the initiative has had a huge effect on education.

I hope we can reach a compromise that will help in the provision of broadband facilities. We cannot compel people to provide them at a flat rate but I have in mind a compromise proposal which, I hope, will incorporate elements of what is being suggested by the Deputies on the other side of the House. They could form part of an amendment on Report Stage.

Question put and agreed to.
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