Designing independent & accountable regulatory authorities for high quality regulation Regulation of the Irish energy and communciations sectors: some current issues Brendan Tuohy Department of Communications, Marine & Natural Resources

Presentation Overview of liberalisation of communications and energy markets Independent regulation –Regulatory structures –Accountability –Appeals Concluding comments

Market liberalisation Why? –Government realisation that it was the correct policy choice –EU policy required it –Competition increases choice, reduces costs, increases efficiencies, fosters innovation, enhances competitiveness –Possible resistance from the staff, unions and management

The evolving role of Government Original Government roles –Shareholder responsibility –Detailed regulation –Regulatory policy –Sectoral development Original mindset –State company as a cash cow or implementer of Government economic and social policy

Changed roles of Government Sectoral development Regulatory policy Changing shareholder responsibility Independent regulatory authority –Relationship of the independent regulatory authority to Government and Parliament –Democratic accountability – eg policy directions –Relationship to other regulators and Competition Authority

Communications Office of the Director of Telecommunications Regulation-1 person Commission for Regulation (Comreg) – 3 persons –Communications –Postal –Internet issues –Spectrum and broadcasting but not content Appeals Panel

Experience of communications regulation More investment, reduced prices, greater choice, more innovation Market problems in the sector generally with reduced capital spending, retrenchment, collapse of some companies Difficulties getting real competition and investment on the ground – eg LLU, mobile market Limitations of the market model – eg international connectivity, broadband investment in advance of demand, use of shared infrastructure, mobile

Current Government position Difficulties with the advanced provision of infrastructure so Government is involved in providing metropolitan area networks (open access) and group broadband schemes Use of regulatory regime to encourage rapid broadband roll-out in advance of demand Broadband to schools initiative

Energy Commission for Electricity Regulation Commission for Energy Regulation (CER) –Electricity –Gas –All island energy market

Experience of energy regulation Balancing the different rquirements – security of supply, upgrading of networks, return on capital Increased eletricity prices Renewable energy Perceived dominance in the market and market prices

Government’s current view Networks are critical infrastructure in an economy and must be developed and maintained so that efficient services can be available to support economic and social development No proposals to divest of infrastructure eg network and wires

Regulatory structures How many regulators? –Comreg –CER –Aviation regulator –Others – Financial (IFSRA), Commission for Taxi Regulation –No regulator for ports, Broadcasting Commission Regulating Better –Necessity principle – general competition law or sectoral specfic? –One or many regulators?

Regulatory structures – cont. Governance and accountability of the regulatory process (2000) –Industry level regulation –Sectoral regulation –Overall utility regulator Enterprise Strategy Report (2004) –Proliferation, costs, lifespan, membership –Multi-sectoral regulator proposed

Accountability Accountable to whom and for what? Relationship with Minister and Parliament Public accountability Costs borne by the industry and audited by the Comptroller and Auditor General Role of the law courts Subject to Freedom of Information legislation

Appeals Clarity on process and decision making incl. consultation Appeal to courts for judicial review –Expert panels of judges Special appeals panels

Conclusions Market liberalisation is good for economic development but there are serious limitations to markets Networks are critical in economies and their regulation may require to be reconsidered Effective independent regulation is critical –Need to address the accountability, linkages to Government policies and democratic deficit issues EU approach to pan European operations may not always suit small countries

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