Vol. 639 No. 3
1 Deputy Simon Coveney asked the Minister for Communications, Energy and Natural Resources if he will introduce a regulation requiring all mobile telephone masts to open for use for all network operators in order to improve coverage and reduce duplication of masts; and if he will make a statement on the matter. [23168/07]
The regulation of telecommunications operators, including regulatory issues surrounding access by operators to other operators' networks, including infrastructure, is the responsibility of the Commission for Communications Regulation, ComReg, in accordance with the requirements of the Communications Regulation Act 2002 and the regulations which transpose the EU regulatory framework for electronic communications.
The building of physical infrastructure for the purpose of providing electronic communications services is a matter for commercial decision by the service providers. In a fully liberalised market, network operators cannot be statutorily required to open their infrastructure for use by other service providers unless they are found by ComReg to hold significant market power. No mobile telephone operators have been found to hold such power in Ireland. However, the European Communities (Electronic Communications Networks and Services) (Access) Regulations 2003, provide operators with a right to negotiate interconnection with another operator for the purpose of providing publicly available electronic communications services and also oblige requested operators to negotiate interconnection requests.
These regulations also make it a function of ComReg to encourage and, where appropriate, ensure adequate access, interconnection and interoperability of services in accordance with the regulations in the interest of efficiency, competition and benefits to end users.
This is the first opportunity I have had to wish the Minister well in his new brief. I am glad to see him in this particular Ministry because its handling by Fianna Fáil in the past five years has amounted to a succession of missed opportunities.
The Minister ought to be aware, if he is not, that Eircom has recently sold its mast network to Threefold Project Management. Given the fact that Threefold Project Management owns and manages masts for Eircom, NTL, O2 and Meteor, is it not now approaching the significant market share to justify ComReg requiring that all masts be open to all competitors to use, in the interests of consumer protection and coverage? If a Vodafone user drives between Cork and Dublin his or her telephone will cut out on at least a dozen occasions. I suspect the same problem exists with other operators and the reason is the fact that we do not have shared networks. I am sure the Minister supports the principle of ensuring Eircom's line network is unbundled and open for competition to use in the provision of services such as broadband and we should ensure the mast network around the country is treated no differently.
It is not true to say the Minister and the Government do not have the power to intervene because a telecommunications Act in the Netherlands in 2004 has done just that. If they decide not to go down the legislative route they have the power to issue a directive to ComReg to ensure it insists on the opening up of all masts to all operators, in the interests of consumers.
I thank Deputy Coveney for his kind words and I look forward to working with him and other Members opposite in my time in this Ministry. I hope it will lead to a beneficial exercise in policy regulation for all the people of this country.
The Deputy made the assertion that we do not have shared use but my understanding is that we do. It may well be facilitated further by the sale of the Eircom mast network. I understand some 60% of the mast network is shared at present and that figure is increasing. Those areas where it is not on the increase are mainly rural locations where there may be competitive issues concerning access but, on the whole, sharing of masts is occurring. There are regulatory powers and I encourage ComReg to use them wherever possible.
The Deputy is correct to say it is crucial we not only have access to masts but good coverage. ComReg is fully empowered to enforce licensing agreements by which mobile telephone companies must abide to ensure good coverage. If there are black spots which are in breach of the licensing conditions, ComReg has the power to act.
I agree with the Deputy that the policy we want to follow is one that brings about shared and more open access, both in respect of fixed line and mobile networks. Another step in the right direction is that, after a significant delay, we are now seeing a mobile virtual network operator, in the shape of Tesco working in conjunction with O2. Tesco operates on the O2 network to provide a separate retail service to customers. I take the Deputy's point on the need to generate open access and that is occurring in terms of the masts and the network.
2 Deputy Liz McManus asked the Minister for Communications, Energy and Natural Resources the reason he has significantly reduced the grants available to homeowners for renewable heating systems under the proposed phase 2 of the greener homes scheme; the number of applicants who obtained grants under phase 1 of the scheme; the number of applicants on the waiting list for grants; the amount in total he proposes to be allocated for phase 2 of the greener homes scheme; the location where the money is being diverted from to pay for it; when this scheme will be implemented; the reason there will be a significant time lapse between phase 1 and phase 2 of the grant schemes; and if he will make a statement on the matter. [23254/07]
The objective of the greener homes scheme is to stimulate consumer investment in renewable heating solutions and to develop the market for renewable energy technologies, thereby reducing CO2 emissions in the domestic sector.
Over 16,000 grants were approved under phase 1, which ran from April 2006 to August 2007. There is no waiting list. Some 6,600 of these applicants have completed installations and have received grant payments. A further 1,800 payment requests are being processed by Sustainable Energy Ireland. Over 8,000 applicants have received grant approval but have not yet requested grant payment.
Since the scheme was launched there has been a dramatic increase in renewable technology suppliers and a tenfold expansion in the number of renewable energy products available on the market. This clearly demonstrates the very significant level of market development since the scheme was first launched.
The first phase of the scheme has achieved all of its objectives speedily and within the overall budget. Consequently, the grant levels are being reduced for some technologies where it is clear that the market has reached a level of maturity to allow it to continue at a lower rate of support.
Other grant levels remain unchanged. Phase 1 of the greener homes scheme was concluded on Monday, 3 September. There was a pause of 28 days ahead of phase 2 being opened on 1 October. The pause of 28 days was required to allow space to process the remaining applications from phase 1 and to put in place all relevant administrative procedures, structures and details of the phase 2 scheme.
The objective in greener homes phase 2 is to consolidate the market, underpinning it with quality standards and training and providing for a long-term future that is not grant-dependent. The aim is to ensure that the market for these products, services and fuels continues to develop strongly, allowing suppliers and installers to consolidate their market offerings ahead of an unsubsidised market. It will also bridge the gap between the ending of phase 1 and the introduction of new building regulations which will further stimulate market uptake.
The new building regulations announced recently by my colleague, the Minister for the Environment, Heritage and Local Government, Deputy John Gormley, will mandate the use of renewable heating systems in all new buildings which will provide a fundamental boost to these technologies.
The time for answering the question has expired.
I wish the Minister well. He will find there will be times when he gets more support on this side of the House than the Government side.
The Minister has made a bad start. The greener homes grant scheme, which the Minister described on 11 October 2006 as a drop in the ocean, has run into the sand because the money has run out. He now proposes a much lower grant scheme for what is a relatively costly business for many people, namely, changing to renewable energy products from traditional sources. It is very hard to understand how the Minister can justify slashing grants as he is doing and I ask him to comment. How much money has been allocated for phase 2 and where is it coming from?
I thank Deputy McManus. I look forward to working with her and to getting support from all sides of the House in the important work we have to do.
I have indicated to the Deputy that we will require a Supplementary Estimate for a transfer budget in my Department because the committees, where such work would normally be carried out, have not yet been established. I understand we may have to do it in the Dáil sometime next week. We will then have a chance for a further debate on the details of the revised scheme and the reasons for any changes.
That is not good enough. I ask the Minister not to flimflam me. I asked him how much money would be allocated for this scheme. It all depends on money. The scheme that was in place ran into the sand because it did not have enough money. How much money will be allocated for this one?
I have said a Supplementary Estimate is being prepared and will be brought before the Dáil next week. It will set out in exact detail how much money will be needed.
Is this supposed to represent transparency and accountability?
Yes. We will be accountable——
The scheme collapsed in August. The Minister is not willing to tell the House——
We will——
Does the Minister want to have a press conference outside the House? Is that why he is not giving us the details?
No, I intend to bring a Supplementary Estimate to the Dáil, which is the appropriate forum for this matter to be discussed, next week.
The Minister knows how much this will cost. He knows how much money will be allocated, but he will not tell the Dáil now.
I can give the Deputy the rough amount now. There will be additional expenditure of between €15 million and €17 million this year. We will wait until the actual Supplementary Estimate for the exact figures.
Where is that coming from?
It will come internally from within the Department. I would prefer to wait for the proper occasion — next week's debate on the Supplementary Estimate — before I make a decision on the matter. We could have a debate on the Supplementary Estimate now, but we would not have time for any of the other Priority Questions.
There is no need for a debate. I want the Minister to answer my questions.
I am trying to answer them. Given that the solar energy grant, for example, is being maintained at the exact same level, I do not accept the Deputy's contention that we are slashing the scheme. Many of the heating grant levels are staying the exact same. Reductions are being made in other areas because market technology has reached a certain maturity. I am sure the Deputy supports other schemes within the budgetary context which also need funding. As Minister, the prudent thing for me to do is to allocate my budget appropriately.
The Deputy referred to my comments about the scheme in October last year, when I said the green homes scheme was "a drop in the ocean". She may have noted that I also said, if I recall correctly, that the then Minister should do exactly what I am doing now, which is to move to a regulatory approach where all new buildings will be required to have these heating systems. I asked the then Minister to do this, but I did not get an answer. That is what we are actually starting to do now. The purpose of the grants is to try to undo the damage caused by 100 years of an oil and gas-fired industry supply chain by moving towards a renewables-fired supply chain. We need to oblige people to use it.
We will return to this one.
3 Deputy Simon Coveney asked the Minister for Communications, Energy and Natural Resources the way he will facilitate the opening of a fully competitive market in the postal delivery sector and in particular the way he will deal with financially supporting the public service obligation that currently exists for An Post in the context of open competition; and if he will make a statement on the matter. [23169/07]
The European Commission published a proposal for the third postal directive last year. It proposed that the postal sectors across the European Union should be fully opened to competition. The proposal has been debated at the European Parliament and European Council. Political agreement was reached at Council level on 1 October last that the deadline for the full opening of the market would be 1 January 2011 for most EU countries, including Ireland. As Ireland has fully implemented the first two European directives, the liberalisation of our postal sector has commenced. The reserved area, the part of the market confined to An Post, has been gradually reduced since 2000. To date, Ireland has adopted a light-handed and pro-competition approach to regulating the postal market, thereby maximising the number of postal operators entering the market. In the light of the benefits that competition brings, there is no reason to suggest Ireland should depart from such an approach.
I do not doubt that liberalisation and the complete removal of the legal barrier to entry will encourage new entrants into the postal market. Other sectors which have liberalised as a result of developments at EU level such as the telecommunications market have resulted in greater consumer choice and reduced prices. I anticipate that the liberalisation of the postal market will have similarly positive effects for Irish consumers.
Issues that will be important for Ireland in the context of a fully liberalised market will include the protection of the universal service and the continued viability of An Post in the face of open competition. The draft directive proposes that the existing levels of universal service be maintained, which means that there will be one clearance and one delivery to every address in Ireland no less than five days a week. If it can be established that meeting the universal service obligation constitutes a net cost, the draft directive sets out a number of options from which member states may choose, including the establishment of a compensation fund, the procurement of the universal service by a member state, the provision of compensation from public funds or the requirement that the universal service provider bear the full cost of the obligation from its resources. No decision has been made on how the cost, if any, of the obligation will be met in the absence of the reserved area. Many international studies suggest that meeting the obligation may not entail a net cost.
Additional information not given on the floor of the House.
To inform Government in its decisions on options relating to the USO and other matters, I intend, before the directive is transposed, to conduct a public consultation seeking the views of all stakeholders in these and other matters arising from the directive.
With all due respect, if the Minister were on this side of the House, he would describe that answer as waffle. Rather than answering the question, he gave the facts that everybody knows — for example, that competition will be good for the market. He said we needed to consider a number of options, but I want to know which option he favours. Competition will be not be a problem in busy cities and urban areas. An Post accepts it will have to compete with companies coming into Ireland to cherry-pick profitable areas within the postal sector. The problem is how we will pay for the universal service obligation. How can we ensure people in places like the Beara Peninsula, Connemara and north-west Donegal receive the same level of postal service as people living in Dublin 4? The reality is that we cannot expect An Post to compete on a head-to-head basis with companies in competitive areas while having to cross-subsidise loss-making in those parts of the country where the universal service obligation is more difficult to fulfil. How will we pay for it? Will we impose a levy on new entrants into the market? Will the State carry the cost by means of taxpayers' money?
If I have time, I would like to put a question back to the Deputy.
The protocol is that Ministers answer questions.
I will answer it with a question. How is Deputy Coveney so certain that a cost will be applied? Contrary to the absolute assertion that compensation will certainly be required, the international experience in countries where liberalisation has already taken place such as Sweden, Finland and the United Kingdom is that there has been no need for a compensation scheme because a discernible cost has not been applied.
On a point of information——
There is no such thing as a point of information, but the Deputy may ask a question.
Will the Minister give way?
The Minister asked a question.
It seems somewhat warped that the Minister has started to ask the Opposition spokespersons questions. Intense lobbying is taking place in the United Kingdom for what is called zonal pricing, for the very reason I have outlined. Certain interests are trying to make the case that the further a postal company has to carry a letter, the more it should be allowed to charge the customer. We are trying to avoid the introduction of such a philosophy as part of our universal service obligation. The United Kingdom is not a particularly good example.
I will not object to any support measures we may need to put in place. However, there should not be an absolute and blanket assumption that such measures will be needed. It is important to consider the reality of the experience in other countries as we make our decision. It would not be appropriate for me to announce today the type of support price or mechanism we should put in place. This proposed directive was cleared by the European Council last week. We will have to respect any changes to the proposed directive which may be made by the European Parliament when it is referred to that forum. When the final outcome of the deliberations in Brussels is known, we will ask the public and the various bodies interested in this sector for their views. The Government position that will be outlined at that point will be based on detailed analysis of the support systems which might have to be put in place, if it is actually necessary in the light of international experience to do so.
The European Parliament——
As a former Member of the European Parliament, I would expect that the Deputy would recognise that as a valid approach.
I certainly do. The European Parliament will certainly not prescribe how the Government should implement competition in the Irish postal market. It will agree the overall directive and possibly amend the manner in which it will be framed, in the interests of promoting competition across the European Union. The Government will decide how we will put it in place in the Irish market.
Absolutely. I am saying, in response to your first accusation, that I had to make——
I ask the Minister and Deputy Coveney to address their remarks through the Chair rather than to each other.
The Deputy opposite claimed that I should have made a decision today about what we will do. He rightly pointed out that the European Parliament may amend the actual directive. I will wait until that happens before I come to a decision on what I will do.
4 Deputy Simon Coveney asked the Minister for Communications, Energy and Natural Resources his views on an east-west electricity inter-connector between Ireland and Britain will be built; the person who will pay for same; the capacity it should have; the acceptable timeframe for the project to commence and be finished; and if he will make a statement on the matter. [23170/07]
The Government is giving high priority to the development of the east-west electricity interconnector between Ireland and Britain. The White Paper on energy policy and the programme for Government underline this commitment which will contribute to security of supply and competitiveness. Greater interconnection between member states is a key priority for the European Union if it is to ensure the Internal Market will work effectively. Work on the east-west electricity interconnector project is progressing well.
Following a 2006 Government decision, the Commission for Energy Regulation is arranging the design of a competition to secure the construction of a 500 MW interconnector at the earliest possible date before 2012. The Government has also decided that the interconnector will, as a national strategic asset, remain in public ownership and be owned by EirGrid. The Government also decided that as a national strategic asset the interconnector will remain in public ownership and will be owned by EirGrid.
EirGrid is progressing work on route selection and technical specification of the interconnector and has recently announced that Woodland in County Meath is the most favoured connection point on the Irish side. Work is also advancing with the relevant authorities on finalising the connection point on the west coast of Britain. EirGrid, overseen by the CER, is also finalising the competition structure, documentation and related contractual arrangements.
To oversee and ensure delivery of the interconnector to schedule, a high level co-ordination group has been established under the chairmanship of the CER and comprising representatives of EirGrid and my Department.
The Planning and Development (Strategic Infrastructure) Act 2006, which provides for a streamlined planning process for strategic infrastructure developments, includes special provisions designed to expedite the planning process for electricity interconnector projects.
To underpin the interconnector development process, new arrangements have been made in respect of the construction and governance under licence of interconnector operators by the CER in the Energy (Miscellaneous Provisions) Act 2006.
In particular, the Act provides that the CER may, with ministerial consent, secure the construction of an interconnector. Such consent will be contingent on final Government approval. As regards funding, the CER and EirGrid are working to determine the most cost-effective and efficient solution. Funding proposals will be part of the submission seeking Government approval for the CER to proceed with securing the construction of the interconnector.
Is it not the case that the ESB offered to build this interconnector and then hand it over to EirGrid? Why did the Government turn down that offer?
I remind the Deputy that it was the previous Government which made that decision; I only arrived in June. The decision was part of a general development to ensure the separation of EirGrid as a fully separately owned asset company which would develop this transmission asset. The Government has put its confidence in EirGrid and in my experience to date, that confidence has been well justified. EirGrid is proving to be a highly effective, highly capable operator showing that it can deliver projects of this scale.
I wish to inform the Deputy that EirGrid recently secured Woodland in County Meath as a connection point for the interconnector on the Irish transmission side. In the last few weeks EirGrid has received a connection offer on the British side for Deeside in Wales. PB Power and Anderson PS technical advisors have been commissioned to start work on the design and planning in Britain. My assessment of the project and of EirGrid's capability shows they are fully able to deliver these types of assets. I believe it will be completed in time and the Government's original decision will be seen to be well placed.
To clarify the position, the taxpayer will pay for it and it will be handed over to EirGrid who will own it on behalf of the State. It will be linked up with the network which EirGrid controls and will own separately from the ESB when the Minister decides to introduce legislation to make this happen. Is this correct?
Is the Minister satisfied — because I am not — that 500 MW is big enough? People in the industry tell me that if the cable is being laid, there is a question as to why it is being limited to 500 MW instead of 1,000 MW.
I am informed there is no benefit in going to 1,000 MW in terms of the construction costs. It is more debatable whether it makes sense in terms of energy. The analysis carried out by the Department showed that a phased introduction to interconnection was a better way of doing it. Care must be taken to develop our own market systems here by encouraging generation and not to undermine this by introducing a large supply on an interconnection basis which might undermine some of the renewable development projects here. It will be a measured approach which allows us to proceed further and gain experience in new technology such as long distance sea cable interconnection. This will provide information on further opportunities such as further interconnection into the UK or possibly into France or into grids which run in a north-south direction along the Irish Sea.
To answer the Deputy's question, it is proposed that the transmission network will be managed and owned by EirGrid and that includes the interconnector in this case.
I thank the Minister for the clarification. Does the Minister mean there is no cost saving to building a 1,000 MW interconnector at that stage as opposed to a 500 MW? Will it be as cost effective to upgrade in the future? Is this cost being factored in by the Minister?
The point made by the Minister is also the point I wish to make. We are endeavouring to introduce competition into the Irish market by connecting to the British grid. Is it not the case that electricity in Britain has consistently been 15% and 20% cheaper than in Ireland over the past five years for households and businesses? The purpose of the interconnector is not just to provide more capacity and security and perhaps the opportunity to export green energy, but it is primarily about piping in competition into the Irish electricity market place and to allow businesses and households have cheaper bills.
I am informed from the consultants' reports that there is no cost loss to the State by choosing this option and it may well be more cost effective.
With regard to the difference in electricity prices on either side of the Irish Sea, the Government is concerned about the cost of electricity but it underlines that we must be careful to deliver those renewable electricity sources which will be more cost competitive in the long run. Fossil fuels will become more scarce and therefore more expensive. We must take care not to undermine that development in the manner in which we develop the grid.
It will keep costs high so renewables are competitive.
The time has expired for this question.
We need to introduce renewables to keep the costs down.
I remind Members that the same rules apply to Ministers.
5 Deputy Simon Coveney asked the Minister for Communications, Energy and Natural Resources the strategy he supports for an efficient and speedy roll out of broadband to all parts of the country; the timeframe that this can be achieved in; the way the Government will support the process; and if he will make a statement on the matter. [23171/07]
The provision of telecommunications services, including broadband, is a matter for the private sector. Broadband service providers operate in a fully liberalised market regulated, where appropriate, by the independent Commission for Communications Regulation, ComReg.
Nevertheless, the widespread provision of broadband services is a major priority for the Government. In this context, the primary role of the Government is to formulate regulatory and infrastructure policies to facilitate the provision of high quality telecommunications services, by competing private sector service providers.
Broadband penetration has increased significantly in recent years. Penetration levels have increased to 698,000 subscribers which, by OECD measures, is the equivalent of 16.48% of the population. This compares to less than 1% in 2002.
As a result, Ireland has improved its position internationally and Government action through provision of an optimal regulatory regime and targeted infrastructural investment will continue to support this performance. In the latter context, the State has undertaken initiatives to address the gaps in broadband coverage. These include providing grant aid under the recently concluded group broadband scheme and investment in metropolitan area networks, known as MANs.
There are still some parts of the country where the private sector will be unable to justify the commercial provision of broadband services. Accordingly, the procurement process for a national broadband scheme is under way. The national broadband scheme will provide broadband services to areas that are currently unserved and will ensure that all reasonable requests for broadband in unserved areas are met.
The first phase of the procurement process, the pre-qualification questionnaire phase, is now complete and four candidates have pre-qualified. As my Department indicated on 2 September 2007, the four candidates in alphabetical order are: BT Communications Ireland Limited consortium; Eircom Limited; Hutchinson 3G Ireland Limited and IFA-Motorola consortium.
The next phase of the procurement process involves inviting candidates to participate in a competitive dialogue process. My Department is anticipating that the national broadband strategy contract will be awarded in the second quarter of 2008, with roll out of the services due to begin as soon as possible thereafter. This timeline is subject to negotiations with candidates during the competitive dialogue phase of the procurement process.
The broadband product to be provided under the national broadband scheme will be broadly equivalent to the tariffs and products typically available on the Irish market. The most appropriate mechanism to achieve this aim will be decided during the competitive dialogue process.
I thank the Minister for his reply. It is helpful to know which groups are in the running for the national broadband scheme. I wish to make a reality check for anyone listening to this debate. Ireland is still a long way behind all its direct competitors and many of its European neighbours in terms of broadband connectivity. A total of 7.8% of the population of County Leitrim have broadband and the total in County Cavan is 9.1%. I contest the Minister's figures of 16% which he outlined. Independent estimates would put the figure closer to 12% or 13%.
With regard to the Supplementary Estimate of €16.2 million which was mentioned earlier and which we will debate next week, a total of €10 million of that sum has been diverted from information and communications technology programmes. What is losing out? Will it be broadband roll-out or group broadband schemes? If so, is the Minister transferring money from IT development and broadband roll-out to the greener homes scheme?
The figures are OECD figures, which are used most commonly, although many people would criticise them as not providing an accurate picture. However, there are various distortions with whatever statistics one uses. In general, we must aim to be at the top of the international league, regardless of the measures, and we should not concentrate only on narrow percentages. We should aim to have as widespread availability as possible.
The group broadband schemes, numbering approximately 120, were set up to provide local community-based services, often through small local providers. The thinking in the Department was that this did not provide a proper, comprehensive or efficient response to the problem of connectivity in rural isolated areas. That is the reason for the advancement towards a new scheme, the national broadband scheme. It is far more comprehensive and covers all the areas that would not otherwise have coverage. It is a more effective and innovative scheme which I believe will be successful. It involves a competitive bidding process which, hopefully, as we go through that process will allow us to raise the level of service in terms of the speed of broadband and technical capabilities, while reducing the costs.
With regard to the funding, there was a re-allocation within the Department. There is a multi-annual funding scheme available to the Department for metropolitan area networks, which are a long-term investment and the correct investment for the future in terms of putting fibre in the ground.
The Minister must conclude. The time for this question has expired but I will allow a final supplementary question.
Will the Minister confirm that he is abandoning the group broadband scheme because he believes it is not working? The reason it has not worked is that there is only matching funding and the community must find half the funding. It is being abandoned in favour of a national broadband scheme that will happen at some stage in the future and the money is being diverted to a different sector in the Department. People who aspired to get funding to bring broadband to their communities can forget it because the €10 million earmarked for that will now go to the greener homes scheme.
Deputy Coveney is incorrect. The Government is following through on financing the group broadband scheme. All grant applications are set out——
Where is the €10 million coming from?
We will deal with that in the debate next week on the Supplementary Estimate.
I am asking the question now.
I was in the process of answering.
The Minister knows the answer but he is not giving it to us.
It is coming from the multi-annual programme in the telecommunications area, particularly from the MANs and other development. The funds were not fixed on any year, which allows us flexibility in terms of payment. That allowed us to transfer funds.
