I apologise on behalf of our chairperson, Etain Doyle, who is indisposed today and is unable to attend. However, Ms Isolde Goggin and myself, the two other commissioners, are here to represent the commission. I am accompanied by Mr. Eric Tomkins, the manager for consumer management, who is the expert in the area of universal service obligation. We have brought a reasonable team and we are delighted to be here for an exchange of views on this issue.
I thank the Chairman, again, for the invitation to set out in some detail how the provision of telecommunications service throughout the country is and will continue to be guaranteed through the principle of universal service and, in particular, its impact on rural areas. The commission would like to stress that, despite what may have been in the press, we see the existing procedures continuing as they are and, if anything, being enhanced rather than curtailed.
I will provide the joint committee with a brief outline of ComReg's role in the area of universal service provision and give some background on the current universal service obligations, which were placed on Eircom, the designated provider, originally in 1999. I will then address ComReg's specific proposals for updating the universal service regime, as set out in our recent public consultation. These proposals arise mainly as a result of the recent adoption of the EU's new directive on universal service and users' rights and the subsequent publication by the Department of Communications, Marine and Natural Resources of the draft transposing regulations. There has been some recent comments in the newspapers on this issue. Therefore, it is topical to try to address it here.
The obligation to supply telephone and other universal services will continue in the future irrespective of who is the designated provider. ComReg's current review of the existing regime has been triggered by EU developments in this area, which seek to enhance the existing European universal service framework. ComReg's role is to ensure these enhancements are incorporated into the Irish regime. In certain cases this will involve the consent of the Minister for Communications, Marine and Natural Resources.
It is useful to start by explaining universal service, its objectives and ComReg's role in this area. People's ability to get access to a basic set of telecommunications service is important for full social and economic inclusion. That is why in Ireland and other countries the concept of universal service exists. The specific objectives of the telecommunication universal service regime is to ensure every person can reasonably expect to receive a basic set of services, such as a telephone line and a telephone book, irrespective of geographic location and at an affordable price. One of the specific objectives of ComReg, as set out in the Communications Regulation Act 2002, is to promote the interests of users, in particular to ensure all users have access to a universal service. In practice, this means we are responsible for deciding on the scope of the services which form part of the universal service obligation and for deciding which operator or operators should be responsible for meeting these obligations. As I mentioned earlier, in certain instances this requires the consent of the Minister for Communications, Marine and Natural Resources. Our role in this area is carried out in light of specific responsibilities set out in other national legislation and I will touch on these later.
I will give a brief background to the current universal service obligation, regime. The framework governing the existing USO regime principally stems from the Voice Telephony and Universal Service Regulations 1999 (SI 71 of 1999). These regulations required the then director to designate one or more fixed telecommunications operators to guarantee the provision of a minimum set of services and to designate the geographic area or areas of the State in which the universal service obligation applies along with the services to which the designation refers.
In May 1999, following a public consultation process Eircom, then Telecom Éireann, was designated by the ODTR as a universal service provider required to fulfil the following obligations: to ensure that any request is met, in so far as the fixed operator considers it reasonable, for connection to the fixed public telephone network; to ensure that one or more subscriber directories - telephone books - are available to users; to keep a record of all subscribers in the State, including those with fixed, mobile and personal numbers and to provide public pay telephones in sufficient numbers, taking into account the population density in the geographic area or areas, to satisfy all reasonable needs for such services throughout such area or areas.
In summary, the services to be provided as part of the USO include a basic telephone connection, the phone book, a directory inquiry service and the provision of public pay phones. Eircom is obliged to supply these services to all areas of the State. ComReg has, as required, established a further specific regime to ensure the quality standards for the services mentioned are maintained, to the ultimate benefit of the consumer.
Current development involves the introduction of new legislation governing USO. ComReg's current review of the universal service framework has been driven by this new legislation. A new EU framework was adopted by the Council of the European Union on 14 February 2002 for the provision of electronic communications throughout the internal market. The new framework consists of a package of five directives which reflect technological and economic changes and which attempt to further harmonise the regulation of electronic communications. Of particular relevance to today's discussion is the Directive on Universal Service and End Users Rights.
All EU member states are now obliged to adopt national legislation implementing the directives by 24 July 2003 except for the data protection directive. In December 2002 the Department of Communications, Marine and Natural Resources issued its consultation on draft legislation which seeks to transpose the universal service directive. The regulations, many of which apply to operators other than the universal service provider, deal with measures concerning the provision of universal service and the protection of end users.
Following from this ComReg initiated a consultation process in December 2002 which outlined the updated universal service obligations and made a number of proposals as to how to implement these. We have received a number of responses to the consultation which are currently being considered. The principal aim behind our consultation process is to address the question of how ComReg should decide, in practical terms, to implement the measures set out in the regulations which are designed to ensure the provision of a minimum set of services throughout the country.
The responses we have received are being assessed and these will help focus the issues and ultimately provide greater clarity for consumers regarding universal service provision and the designated provider's role in this regard. It is also worth noting that in February 2003 a further consultation was issued by ComReg which deals with other aspects of the regulations concerning obligations which may be applied to all operators in the interests of protecting end users. Issues such as complaint handling procedures and the publication of quality of service information were addressed in this consultation.
I will now provide some more specific details on what the measures proposed in our consultation on universal service will mean for Irish consumers, including those who live in rural areas.
What is a universal service? We are striving to ensure we cover all the elements. The underlying principle of universal service is particularly relevant to persons who by virtue of their location in Ireland may not receive a service were it to be provided under normal commercial conditions. The universal service framework is designed to protect such users, including those on low incomes, and to ensure they have access to essential services.
As I stated earlier, in Ireland, the concept of universal service provides that every person can reasonably expect to receive a basic set of telecommunications services no matter where they live, at an affordable price. These basic services include telephone access at a fixed location, the provision of directory inquiry services and a phone book and the provision of public pay phones. ComReg has made these proposals to deal with the implementation of the obligations set out under the new framework. I will now go briefly through a number of these.
A fundamental issue for those living in rural areas is the ability to get a telephone line. In essence, the universal service operator is required to provide consumers with a telephone line and access to calling services. From time to time, ComReg receives complaints regarding the provision of telephone lines. However, in the main, these are ultimately resolved with the operator concerned.
Currently, the USO operator, Eircom, in providing a telephone line is responsible for deciding on the reasonableness of a request from a consumer for a telephone connection. In the majority of cases, the universal service provider should not have any significant difficulty in providing network connections throughout the country. However, in some remote areas the provider may not have a network presence and the cost of building out the network to meet these obligations may not be "reasonable" in light of the standard installation charge, currently €129.99, that applies to new connections. As a consequence, any attempt to describe the concept of reasonableness in relation to the supply of standard services cannot be absolute and must be dealt with on a case by case basis.
Under the draft legislation, ComReg can, with the consent of the Minister for Communications, Marine and Natural Resources, specify requirements to be complied with by the USO provider in meeting its obligations to provide access to the telephone network. In particular this could include the reasonableness of requests for connection to the network and for access to universal services and the capability of the line to allow functional Internet access, having regard to prevailing technologies used by the majority of subscribers and to technological feasibility. Unlike the existing regime, in future ComReg will be in a position to specify requirements regarding the reasonableness of a request for a telephone line. In such circumstances the USO provider would be required to deliver a telephone line.
In dealing with this aspect ComReg has made proposals which are designed to increase the level of transparency for consumers in their dealings with the universal service provider, thereby allowing them to directly enforce their rights when seeking to obtain a telephone line. Such proposals include the publication of clear requirements governing the universal service provider's obligation to meet all "reasonable" requests for access. These may include, among other things, the terms and conditions upon which a connection to the network and access to services will be provided, situations where ComReg can require the provision of a line and a basis upon which a determination regarding the reasonableness of a request for access can be made.
ComReg has also proposed that these requirements should be captured in a wider policy statement to be published by the USO provider, and approved by ComReg, which would govern how it will deliver services under the USO. Again, the benefit of this approach is that it clearly sets out the circumstances under which a telephone line must be provided. Should disputes arise regarding the provision of a line the USO operator is obliged to notify the customer of his or her right to pursue the matter further through the dispute resolution procedures established by ComReg.
ComReg has made other proposals to deal with the functional Internet access requirements. Given the growth in dial-up Internet access in recent years, the speed of data transmission over networks has become of increasing importance to users, particularly where it involves access to e-commerce or e-government services. One measure proposed by ComReg is to require that the telephone connection is capable of adequately supporting the transmission of data. In addition, it is proposed that the universal service provider, USP, publish a statement setting out the factors which can reasonably affect the performance of its network and thus the data rate available to the end user.
I must stress that once designated, the new universal service provider will be required to meet its obligations in the light of the requirements specified by ComReg in the provision of telephone access. There is no question of the abandonment of obligations. Regardless of which operator or operators are designated as the universal service provider, the obligation to provide a universal service is a legislative requirement.
The existing universal service operator, Eircom, must ensure public payphones are provided in sufficient numbers to satisfy all reasonable needs for such services. In the past two years Eircom has embarked on a payphone rationalisation programme designed to reduce the number of uneconomic payphone kiosks. As a general rule, the rationalisation effort has focused on multiple site payphones. A single site payphone presence has been maintained at most sites. During this time it has become clear that demand for public payphones has decreased, mainly as fixed and mobile phone penetration rates have increased. As of the second quarter of 2002, Eircom's payphone numbers stand at 6,685. There are probably at least another 3,000 in other hands.
Nonetheless, payphones continue to provide a key service for many people living in rural areas and have an important social function. In a changing market, it is important, therefore, that the future regulatory framework for public payphones continues to balance the needs of consumers with those of public payphone providers. For this reason, ComReg has brought forward proposals on a number of new measures and controls to ensure the number and coverage of public payphones are carefully maintained and monitored.
In line with the new framework, ComReg has proposed that the public payphone USP should provide an annual published statement on its payphone strategy which would outline, for example, the number of payphones by county and their location in each county and the operator's payphone rationalisation plans. This is related to the issue of clarity and transparency in the ongoing developments. In addition, if the operator plans any changes to its public payphone strategy, it should provide sufficient notification of this to ComReg. This would allow for a period of consultation with ComReg and other interested parties, if necessary. The consultation also includes a proposal to establish a ratio or quota system of payphone provision which would ensure the requirement to provide a total number of payphones was not met just through the provision of payphones in high revenue locations.
ComReg has also proposed more formalised processes for the USP to publish a notice where it intends to remove or resite a payphone and allow a period for local communities to make representations to the provider concerned. This process could also set out the specific instances where the consent of ComReg would be required and whether single site USO public payphones would be subject only to the guidelines. We will seek to develop these guidelines in the coming months which may involve further consultation.
Under the existing obligation, the USO must ensure provision of the telephone book and a directory inquiry service, all of which are supported by the operation of the national directory database, the list of all subscriber numbers in the State for those users who have not refused inclusion in the directory. The obligations under the new framework are largely the same, although ComReg has sought views on a proposal to provide the directory in CD format, a service which may prove beneficial to business users. Specific measures have been proposed to ensure disabled users can avail of universal services equivalent to that enjoyed by other users. To name but a few, these include text relay services or amplifier phones for the hearing impaired, and Braille billing for users with restricted vision.
For the basic set of services I have outlined, ComReg has proposed that Eircom continue in its capacity as the universal service provider, having regard to its market share, the ubiquity of its network and its considerable experience in providing the directory and payphone services. The consultation did include, however, an invitation to other operators to put themselves forward to become Ireland's designated universal service provider for all or part of the basic set of services. A further important point to note is that ComReg has proposed that the universal service obligations should be applied to the whole geographic area of the State.
In the area of control of expenditure for consumers, ComReg has also proposed a number of measures to ensure subscribers can monitor and control expenditure and avoid unwarranted disconnection from the network. These measures include a minimum level of itemised billing free of charge, selective call barring and the phased payment of connection fees. Such measures would be of benefit to all users, particularly vulnerable consumers.
Eircom, the designated USO, has requested funding towards the cost of its existing USO. ComReg is reviewing whether the costs associated with the existing universal service obligation justify the activation of a funding mechanism. ComReg is awaiting further information from the incumbent USO operator prior to making a final determination. It also intends to shortly carry out a separate consultation on the matter of costing and financing of universal service obligations in the light of the provisions contained in the new framework. A universal service provider may receive compensation for the net cost of meeting the universal service obligations where, on the basis of a net cost calculation, ComReg determines that the provider is subject to an unfair burden. If appropriate, compensation will be funded by a sharing mechanism administered by ComReg or an independent body.
As members are aware, ComReg's preliminary consultation on the future universal service framework closed in February. All responses, including those received from industry, consumer representative groups, special interest groups and consumers, will be considered by ComReg in reaching a decision on the framework. We expect to issue our decision in May 2003, although further consultation may be appropriate, if necessary.
I thank the Chairman and members of the committee for their time and attention. I have not been able to mention everything we are doing in the area but I think my presentation has been quite extensive. We have tried to outline the salient parts of what we are trying to do in this area. I hope I have dealt with all the issues of current importance. We will be happy to answer any further questions. I emphasise once again that there is no question of abandoning universal service obligations which are a legislative requirement. Regardless of which operator or operators are designated as the USO provider, this must ensure every person throughout the country can be reasonably provided with essential services such as a telephone line.
