Communications
I am aware that the development of a world class telecommunications sector is important to the continuing economic and social prosperity of our country.
This Government’s policy focus is on increasing competition for the benefit of the consumer. We do this by ensuring that the regulator, ComReg, is able to regulate the telecommunications market effectively and by supplementing the investment of the private sector by ensuring that telecoms infrastructure is put into areas where it is not economically viable for private companies to roll out infrastructure.
The roll out of broadband infrastructure and services is a key component for moving Ireland to the forefront of knowledge-based economies in the world.
The government’s initiatives to supplement private sector activity over the last ten years include:
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grant aiding backbone networks such as ESBT;
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ensuring Ireland has world class international connectivity;
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building Metropolitan Area Networks in over 120 cities and towns; and
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making broadband provision for small communities.
The fruits of private sector initiative and Government intervention are now ripening. In the last year we have seen a huge leap forward in availability and take up of broadband.
There were more than 515,000 broadband subscribers in Ireland at the end of 2006. I recently issued a bold challenge to the telecoms industry to reach 700,000 by the end of this year. This will see another major improvement in Ireland’s broadband position. I am confident that this target will be reached.
Increased competition and more effective regulation has not only brought new broadband products to the market but it has made broadband much more affordable in Ireland. Higher bandwidth, at lower prices, is now a feature of the market.
However, we recognise that there are still pockets of the country where broadband availability remains poor.
The National Broadband Scheme, which I recently announced, will target the 10% or so of the country that is still not served by the growing market for broadband services.
I am sure that there will be much interest from the private sector broadband providers when the tendering process for this scheme is announced by my Department in the coming weeks.
I also believe that the migration to and development of Next Generation Networks (NGNs) will provide the necessary platform for the telecommunications sector going forward.
The migration to Next Generation Networks is being considered by Service Providers and will generate many issues with wide implications for regulation, competition, investment and service delivery that need to be addressed.
I am keen to see all stakeholders - the industry, the Regulator and the Government working together to ensure that Irish businesses and consumers have choice and that competitive products are being offered.
To help achieve the progression to Next Generation Networks (NGNs) I recently announced my intention to establish a National Advisory Forum which will report on next best steps on migration to NGNs by the end of the year. Details concerning the Forum, including its membership are being finalised.
Local Loop Unbundling (LLU)
The ongoing difficulties in unbundling the local loop remains a frustration for all who want to see fair and open competition on a level playing field, leading to a greater choice for consumers.
While there has been some progress in this are, as Minister, I’d like to see much more progress on this. Delays in unbundling create serous economic and operational problems for operators and militates against customers being able to benefit from the innovation, choice and prices available in other markets such as the UK.
A speedy resolution of the discussions on LLU would give everyone confidence that real and significant progress is possible in the immediate future.
I am confident that the regulator can bring about progress in this area, particularly in light of the new competition law powers, the greater enforcement powers, and the more efficient prosecuting procedures provided for ComReg in the new Communications Regulation (Amendment) Act, should these be necessary.
Structural Separation
Any proposal by eircom to separate its retail and wholesale arms, as was mooted when Babcock & Brown were buying into eircom, would primarily be a matter for the company themselves, subject to compliance with any regulatory requirements which would be a matter for ComReg to determine.
Neither I as Minister for Communications, nor my Department would have a role in this regard.
As Minister for Communications however, I have a keen interest in any market change that would result in increased competition, more choice, and lowers prices for consumers.
Communications Regulation (Amendment) Act, 2007
The primary purpose of this legislation is to increase the enforcement powers of the Commission for Communications Regulation (ComReg) so that it can better achieve one of its primary functions, which is the promotion of competition, thereby leading to better and more competitively priced telecommunications services for consumers.
The Act provides for Competition law powers for ComReg, similar to the Competition Authority, in the telecoms sector, which will allow them to investigate and take action in issues such as abuse of dominance.
It is envisaged that these competition powers, in addition to the provisions for both civil and criminal remedies, will give ComReg a strong suite of enforcement powers to enforce regulatory decisions and to support the development of competition in the market.
In this regard, the Act provides that penalties for non-compliance with the regulatory framework will now be of the magnitude of up to €5m or 10% of turnover. Such penalties are necessary to incentivise compliance in an industry where total revenues for the fixed, mobile and broadcasting markets stand at an estimated €4.3 billion per annum. Compliant operators have nothing to fear from these increased sanctions.
I believe that the provisions in this Act are a timely enhancement of the regulator’s powers. This legislation gives ComReg a stronger suite of enforcement powers than any other sectoral regulator. ComReg will now have 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.
I intend to commence the Act at the earliest possible date and I am confident that the provisions in the Bill will result in significant improvements in the competitiveness of the sector to the benefit of all consumers.
Roaming Charges
Since coming to office I have highlighted the issue of roaming charges.
Following pressure from myself, my Northern Ireland counterpart and the Regulators, the Irish mobile phone sector introduced special roaming tariffs to address the high costs of roaming on the island.
Removing barriers to communications on the island is good for citizens and business.
Similarly at EU level, we have strongly supported the Commissions decision to bring forward a Regulation on roaming charges.
This regulation is under negotiation at the moment. Much progress has been made and I look forward to a successful conclusion to these negotiations.
Energy Market
Now I would like to focus my following remarks on the energy market;
Energy Policy is now centre stage, not just in Ireland, but in Europe and globally. This is as it should be because energy policy is so fundamental to our economic development and social wellbeing.
Because energy policy is at the forefront of our development as an economy and as a society, Government policy must demonstrate the ambition to envisage a different energy future and the commitment to take the actions necessary to achieve it.
The White Paper
Challenging ambition is the keynote of the Energy White Paper “Delivering a Sustainable Energy Future for Ireland”. The Paper is strongly focussed on the needs of the business and enterprise community, by ensuring that our energy sector performs as well as possible to underpin future competitiveness.
The key issues you have emphasised of interest to business are:
- Competitiveness of energy supply
- Availability of energy and
- Linkages between energy use and the environment
Those areas are mirrored in the three energy policy pillars in the White Paper, which lists three principles or pillars:
- Security of Supply,
- Sustainability and
- Competitiveness
The White Paper is strongly action oriented, setting out strategic goals for each pillar and identifying a full set of actions and targets to achieve them. The actions are practical time-barred policy initiatives with firm timelines.
I would like to provide you with a flavour of the key actions in these areas of interest to you.
Security of Supply
Security of supply will be underpinned by the new electricity interconnection North-South and East-West and the establishment of the Single Electricity Market - as well as initiatives with the UK and in Europe to enhance the gas trading and supply market.
We all applaud the historic moves in the North last month and look forward to a devolved power-sharing Government in Northern Ireland on 8 May. I look forward to deepening and enhancing our cooperation on energy matters.
That cooperation is moving ahead steadily under the All-Island Energy Market Development Framework. Delivery of the Single Electricity market later this year will be a significant achievement and reflects the political commitment North and South to the all-island development of our energy sector.
In addition, the White Paper contains a range of measures to ensure that there is adequate electricity generation to 2010 and beyond. One is to provide for immediate additional supply if needed and the building of new flexible plant within the next 12-18 months.
These measures, in addition to ensuring security of supply, also contribute to reducing costs and improving competitiveness.
Competitiveness
Competitiveness of energy costs and the best possible conditions for competition and customer choice are key concerns. The White Paper sets out actions to enhance competition, choice and competitiveness.
High global energy costs are now a fact of life with the inevitable impact on prices. Here in Ireland, our scale, our fuel mix and the structural constraints of the market intensify these effects.
This reinforces the need to tackle domestic costs to the greatest extent possible. It also increases the importance of getting the structure of the market right, so that competition actually gets us lower prices over the medium to longer term.
We are making the necessary and proportionate degree of structural change in the energy sector. I say proportionate because some have said that it does not go far enough, while others have declared their resistance.
There is a whole package of reforms on the competitiveness side involving:
- Ruling out privatisation of the transmission and distribution networks.
- The distribution network run on a risk related return, with the benefits to be passed on in full to electricity customers.
- The transfer of the transmission assets to EirGrid
- The establishment of the landbank to facilitate more players becoming in involved in power generation
- The CER/ESB Asset Strategy Agreement, which is designed to reduce ESB market share
Discussion to date has been on the single issue of transferring the transmission assets to EirGrid), which is the norm in Europe. This has confined the overall debate to a single issue, instead of the package as a whole. This transfer of these assets – from one semi state company to another – is a central part of our strategy to create competition.
It will deliver efficiencies and significantly reduce EirGrid overheads and the amount of heavy regulation on both EirGrid and ESB. But above all it will deliver confidence to all market players that the system is run in a non-discriminatory way. It will underpin the efficient operation of the all-island electricity market and enable the more efficient and timely integration of renewable energy onto the grid system.
The establishment of a landbank of power generation sites, in conjunction with the CER/ESB Asset Strategy Agreement, which is designed to reduce ESB market share, will also improve the investment potential of the Irish market.
The structural changes set out in the White Paper will transform the landscape of the Irish electricity market and improve its attractiveness for new and existing players.
These actions leave no doubt about the Government’s commitment to ensuring a level playing field, exerting downward pressure on energy costs and providing a transparent and competitive energy market. The clear intent behind these positive reforms is to ensure the best possible deal for consumers, in terms of a secure supply at all times from a transparent vibrant market.
Sustainability
In respect of sustainability of our energy sector, the White Paper expands on the National BioEnergy Action Plan. It commits to ambitious targets for the development of renewable energy and substantial improvement in our levels of energy efficiency.
Achieving these ambitious targets requires a positive and innovative response from the industry. It also requires the ambition to make substantial and significant energy efficiency savings across all sectors of the economy.
Energy efficiency has the potential to be a force for increased competitiveness in the business and enterprise sector. Sustainable Energy Ireland has been active with the business community on this issue for some time and continued work, including the roll out of the new energy Management Standard has the potential to give companies here control over their energy use, benefiting their competitiveness and profitability.
Linking energy and the environment is not new. What is new is the heightened profile in media and policy debate about the interactions between climate change and energy use.
The Spring European Council resulted in an explicit endorsement by European Heads of Government of ambitious strategies for energy and climate change. They sent a powerful signal that Europe is leading, by taking actions to deliver a sustainable energy future for European citizens. These actions will see Europe lead the world in reducing greenhouse gas emissions.
Ireland supported the EU’s ambitious targets, in relation to emissions, renewables and biofuels. Our domestic energy and climate change policies reflect this new reality. But all of us - Government, business and consumers – have to understand that this means profound change.
The future however is not just about delivering on environmental goals for their own sake. The sustainability agenda is good for energy policy too.
Using more renewables in Ireland, in order to achieve emissions reductions, means greater diversity of energy sources and less reliance on imported fuels.
Therefore, we also achieve greater security of supply. Energy efficiency programmes result in less energy being used, again to achieve emissions reductions, but this means less spent on energy and therefore competitiveness gains.
Right across the spectrum of energy policy challenges, the actions in the White Paper will deliver positive results for Ireland in terms of a sustainable energy future. This will benefit the enterprise community and ordinary consumers alike, as well as future generations.
Getting there is a collective national enterprise. This involves Government leading, but everyone else is involved, the energy industry, business and wider stakeholders. We all have a role to play in delivering for consumers and Ireland Inc. Only a sustained commitment by all of us will deliver a sustainable energy future for the next generation
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