I move: "That the Bill be now read a Second Time."
I am pleased to present the Communications Regulation (Amendment) Bill 2007 for the consideration of the House. This Bill is important. Not only will it provide a framework for critical services such as an emergency call answering service, but when enacted, it will greatly strengthen the powers of ComReg, the communications regulator, to enable greater competition in the electronic communications market.
The Commission for Communications Regulation, or ComReg, as it is more commonly known, was established in 1996 as the then Office of the Director of Telecoms Regulation. We have come a long way since then. The market was fully liberalised in 1999 and the communications landscape has been completely overhauled and transformed in the past decade. We now have more than 300 private operators in the communications arena and a mobile phone penetration rate of 100%. Consumers now have choices in terms of products and services that would have been undreamt of previously. Communications are an integral part of our daily lives. They drive businesses forward, open new and strengthen existing networks, and negate many of the disadvantages of being an island nation. They are a strategically important part of our economy.
Creating an open and competitive market is a key challenge. The current regulatory framework is based on competition law principles and aims to ensure fair competition between service providers, some of whom dominate for historical structural reasons. However, the evidence to date does not show the market to be moving towards a fully competitive state. ComReg's market analyses have found significant market power in both the fixed and mobile markets.
Regulatory remedies are key to realising the benefits of a competitive market and the Bill aims to enhance ComReg's powers in this regard. The Bill confers on ComReg competition law powers similar to that of the Competition Authority, so that it can investigate and prosecute restrictive agreements and practices, but only in regard to the communications sector. These powers are similar to the powers of the UK regulatory authority in regard to the telecoms sector and which have proven very effective in opening up the broadband market in the UK. Strong powers to prosecute specific anti-competitive behaviour are needed to encourage compliance among market players, especially the larger players.
The communications sector is a fast paced and exciting one. Terms such as broadband, texting, convergence, and Internet hotspots are now ubiquitous. Whether we like it or not, texting has even introduced its own form of language. One term, however, with which we are all too familiar is that of local loop unbundling, LLU. Local loop unbundling is a key requirement to stimulate more competition in Ireland's broadband market and to increase broadband take-up. It has been legally mandated since 2000 but has been difficult to implement in practice, despite the regulatory steps taken by ComReg. Latest figures for LLU in Ireland remain low. Approximately 20,000 lines were unbundled by the end of 2006. This is not good enough.
Delays in unbundling create serious economic and operational problems for other operators, and militate against customers being able to benefit from the innovation, choice and prices available in other markets such as the UK, France, etc. LLU has worked in other countries. One can ask what is so different here. There have been calls from many quarters, even from the Opposition, to give ComReg enhanced powers, so as "to give the regulator teeth" and "to unleash the watchdog". Competitiveness in the communications sector is a significant factor in determining national competitiveness and it is essential that we get the regulatory balance right. The proposals in the Bill were drafted in consultation with ComReg and there has been full consultation with the key players in the market. The Bill is a measured and proportionate step towards this goal.
While the primary purpose of the Bill is to strengthen ComReg's enforcement powers so that it can better achieve its function of promoting competition, and confers on ComReg competition law powers similar to the Competition Authority, the Bill also provides for information gathering powers, the establishment of an emergency call handling service and the regulation by ComReg of the ".ie" Internet domain name.
I will highlight the main provisions of the Bill for the House. The legislation is divided into four parts. Part 1 contains standard preliminary provisions. Part 2 contains the main provisions giving additional functions and enforcement powers to ComReg. Part 3 amends the Electronic Commerce Act to provide for the regulation by ComReg of the ".ie" domain name. Part 4 of the Bill amends the Competition Act to give ComReg powers under that Act to investigate and prosecute offences such as abuse of dominance.
Part 2 of the Bill amends the Communications Regulation Act, hereafter referred to as the principal Act, to confer some additional functions on ComReg. It will monitor the operation of the emergency call answering service that is to be established in lieu of the service currently provided and paid for by Eircom. It is proposed that the provision of the new service will be tendered for and funded by a per call fee to be determined by ComReg and paid by public access telecommunications providers who forward emergency calls to the centre. It is also proposed that ComReg will monitor the quality of the service and report annually to me, as the Minister with responsibility for communications, on its operation.
ComReg may collect and disseminate information from undertakings for the purpose of contributing to an open and competitive market and for statistical purposes. Information is key to effective regulation. ComReg's current information gathering powers were not expressly designed for general statistical purposes. The Bill now expressly gives ComReg powers in this regard. Deficiencies or delays associated with the provision of information to ComReg have a direct effect on its ability to share information with other organisations, such as the European Commission or the OECD. ComReg is mindful of the burden that data collection imposes on operators and has sought to assist operators by specifying particular data requirements that do not apply to them. ComReg's function to carry out investigations as a result of complaints from undertakings and consumers is being broadened to include the ability to carry out investigations on its own initiative. This will increase ComReg's effectiveness as the regulator of the industry.
Section 6 of the Bill provides that I, as Minister, can obtain information from ComReg and undertakings that will assist me in formulating policies and plans to deal with any network security issues that may arise. This is important because of the growing reliance we place on the telecommunications networks as individuals and as a society. It is vital that, in order to formulate policies regarding the security of the networks, I have the most relevant information possible at my disposal. ComReg is also granted certain information gathering powers to be exercised in the pursuance of its functions.
Section 7 provides protection for whistleblowers who disclose appropriate information to ComReg. This is line with Government policy to provide such protection in new legislation and should encourage employees of undertakings to expose and report wrongdoing they reasonably believe to be occurring. Protection for operators is also provided for by creating an offence of knowingly providing incorrect information.
In the interests of transparency, section 9 of the Bill requires ComReg to publish annual plans and associated budgets relating to the principal work items it proposes to undertake in the following year. These will complement the existing financial information in its annual report and the strategies outlined in its strategy statement and will be of interest not just to the industry who funds these strategies, but also to a wider audience. It is reasonable that companies in the communications and postal sector that fund ComReg's activities should have more information as to how the levies paid to ComReg are spent.
The Bill inserts a new part in the principal Act that will allow ComReg to require persons to appear before it to give evidence or produce a document that relates to a matter concerning the performance or exercise of any of its functions or objectives. This is based on a similar provision in the Competition Act that empowers the Competition Authority to require witnesses to attend before it and is in addition to ComReg's authorised officers powers, thereby substantially increasing the effectiveness of ComReg's investigatory powers, which is important in the context of proper enforcement. This provision allows ComReg to put the onus on an operator to give evidence or produce documents, rather than ComReg having to search for them, and like the Competition Act, protections and privileges are built into this section for anyone required to attend before ComReg.
Section 13 of the Bill creates a new offence for overcharging consumers. I do not suggest there is widespread overcharging in the market but it is appropriate, given ComReg's overarching regulatory remit in the communications sector, to remedy any absence of power in this area. This provision is essentially about consumer protection.
Section 14 of the Bill is the cornerstone of enhancing ComReg's enforcement powers. In addition to the principal Act, the current regulatory regime derives from the directives transposed in 2003 under the European Communities Act 1972. Summary proceedings are provided for, with a maximum fine of €3,000 and the option of civil proceedings for non-compliance with obligations under that regime. There are no indictable offences as these are prohibited under the 1972 Act. However, enforcement is a key part of effective regulation and appropriate remedies and sanctions are vital to secure regulatory compliance. Penalties for summary offences may be of little consequence to operators in such a high value industry and have little deterrent effect. Section 14 of the Bill provides an enabling mechanism whereby the Minister with responsibility for communications can, by regulation, provide for offences under those regulations to be tried on indictment, with penalties of up to €4 million or 10% of turnover, whichever is greater. Penalties of this magnitude are necessary in an industry where total revenues for the fixed, mobile and broadcasting markets stand at an estimated €4 billion per annum.
In a fast changing, dynamic industry such as the electronic communications sector, it is important to be able to legislate in a timely and effective manner. For example, the current EU framework, which comprised five directives and was only transposed in 2003, is already under review and the EU Commission will propose changes to it later this year. Any proposed changes will need to be implemented speedily if competition in the market is to be strengthened and maintained.
I am confident that this provision for making regulations with the possibility of indictable proceedings, limited to the communications sector, is a progressive step and will help improve the regulatory framework in Ireland. Any regulations made under the principal Act, as amended by this Bill, will be laid before each House of the Oireachtas and be subject to scrutiny and annulment within 21 days.
Section 14 also provides for some enhancements for prosecution procedures under this Act. These provisions relate to the admissibility of expert evidence, the provision of documents to juries, presumption as to the authenticity of certain documents, and statements within documents. They are based on similar provisions in competition law and will prove useful because legal proceedings in this sector can be technical and specialised.
Section 15 of the Bill will allow ComReg to ensure access for operators to physical infrastructure by extending ComReg's remit here to cover situations where the physical infrastructure owner, such as a property developer, is not bound by general authorisation conditions. Ensuring access to physical infrastructure is an important element of the communications framework because much of the infrastructure in this sector is not easily replicable for reasons of scale, investment, and natural monopoly. ComReg will now be able to enforce access against owners of physical infrastructure, such as property developers, by seeking a court order. This will help ensure more choice for consumers, particularly in new property developments, where exclusive contracts restrict consumers' choice.
Section 16 of the Bill inserts a new Part 6 into the principal Act that provides for me as the Minister to enter into a contract with an undertaking for the provision of an emergency call answering service. This section also provides for ComReg to regulate the price the undertaking shall charge for the handling of emergency calls. It also provides for a payment regime where the undertaking shall charge the operator who forwards emergency calls on a per call basis.
Part 3 of the Bill amends the Electronic Commerce Act 2000 to provide for the regulation of the .ie domain by ComReg. It provides for the powers given to me as Minister, pursuant to the Electronic Commerce Act, to be transferred to ComReg. This part also provides ComReg with powers to designate an interim authority and to have access to the registry files to ensure that the functioning of the .ie Internet domain name is secure at all times.
The European regulatory framework for communications is based on competition law principles. Following discussion with my colleague, the Minister for Enterprise, Trade and Employment, I am introducing in this Bill provisions to give ComReg powers similar to those of the Competition Authority so that it can investigate and prosecute restrictive agreements and practices, but only in respect of the communications sector.
The Competition Authority is charged with enforcing competition law in the whole of the economy, not just the telecommunications area. Giving ComReg similar powers enables it to prioritise competition investigations in the communications industry, which is where its expertise lies. Provision is made for a co-operation agreement between both bodies so that there is no duplication of resources, and so that expertise and experience can be shared.
The communications sector is of major importance to the economy and therefore, it is important that abuse of dominance issues are adequately addressed. The promotion of competition in the sector will enhance the attractiveness of the sector for investors, and provide more choice for consumers.
The Bill provides for increased penalties for obligations that already exist under the EU regulatory framework of 2003 and provisions to facilitate more effective prosecutions by ComReg. Compliant operators have nothing to fear. Aside from compliance with the new information gathering powers for both the Minister and ComReg, emergency call handling fees and the obligation not to overcharge, there are no new obligations for operators in the Bill.
The Government's communications regulation policy is to create a legislative framework, in line with the EU regulatory framework, that provides for the development of strategic and competitive communications networks and services. This Bill is a timely enhancement of the regulator's powers. It will give ComReg the necessary tools to ensure the development of competition in the market and will provide the regulatory certainty that will encourage new investment by existing operators and entice new entrants into the market.
Over the coming period, we will look to the regulator to deliver on its commitments and to the operators to deliver on their obligations. I will propose several amendments on Committee Stage, but these should not substantially alter the nature of the Bill. I look forward to hearing the views of the Members of this House on the Bill and their assistance in facilitating its early passage into law. I commend the Bill to the House.