The High Court decision this week against the award of the third mobile phone licence to Meteor is an earthquake in our relatively new world of independent regulation.
It is a very pertinent background to the public consultation that the Minister for Public Enterprise, Ms O'Rourke, has begun on the whole system of regulation in her area. One of the questions she has invited views on is "whether the regulatory authority in each sector should comprise one individual Regulator or a Regulatory Board".
There is no single model in the Republic, but the practice so far has been mainly to use a collective regulator. For example, the Competition Authority has five members and the Independent Radio Television Commission is, by definition, a collective body. There are three Revenue Commissoners. The Central Bank, the largest regulator in the State, has collective responsibility through its board. In the extensive analysis of the single regulatory authority for financial services, no one has suggested that the authority should reside in one person.
As against those examples, the Director of Consumer Affairs is a position to be held by one person and, like the Telecommunications Regulator, the mere office of the Director of Consumer Affairs cannot carry out any statutory functions. The Data Protection Commissioner is a one-person role too, as is the Ombudsman. One could argue that ministerial legal responsibility sets the precedent for a sole person discharging significant responsibilities.
In Britain, the utility regulators are mostly individuals rather than groups. The Director of Public Prosecutions is an individual, but exercises a function very different from regulation of commerce.
The new Commission on Electricity Regulation allows for the appointment of up to three commissioners, although only one has been appointed so far. This permits Ms O'Rourke and her successors to choose between a single person regulator and a collective group.
The arguments favour a collective body. To require by law a sole person to make decisions of major economic importance runs greater risks than using collective wisdom. Each office holder has to rely on expert advisers, but an individual regulator has to make the final decision on his or her own, and is held responsible as such.
Two heads are better than one. A well-functioning collective body will minimise the risk of error. A sole judge in the High Court makes the court's ruling; at the highest level, in the Supreme Court, there are five judges.
It is the norm in business, where a board takes major decisions, even though there is a managing director. It is the norm in government, where the cabinet takes the big decisions together, notwithstanding ministerial responsibility in each department. It is the norm in trade unions and in all types of associations. It is culturally more commonplace in our democracy at every level to elect committees rather than a single powerful individual.
The accountability of a regulator is not enhanced by it being a single individual rather than a collective body. Accountability depends on reporting procedures, the openness of decision methods and the ability to remove a person from office, ultimately.
One of the critical points in the McDowell Committee report on the Single Regulator was the Government's current inability to remove the Governor of the Central Bank from office, due to the rules for the euro (a legal situation which the Bank contends can be changed).
The Director of Telecommunications Regulation can be removed from office during appointment for incapacity due to ill-health or stated misbehaviour, grounds akin to those applying to judges. By contrast, the Director of Consumer Affairs can be removed by the Minister at any time with the only requirement being to let the Oireachtas know the reasons why.
Whatever the grounds for removal from office, if a sole regulator is designed to be accountable, a collective body can equally be. There would be no diminution of accountability of the Commission on Electricity Regulation if two further commissioners were appointed. A commitment to consumer protection can be as deeply rooted by culture and leadership, as much as relying on one person's disposition. There are bound to be problems for the individual regulator, too. One may be committed to manage in a collegiate way, but the legal requirement to be solely responsible for decisions could work against this generally favoured management style.
Decisions, regulations and communications can be seen as overly-personalised, which is problematic, not least for the regulator, when there are bound to be winners and losers from particular outcomes. Fundamentally, it becomes difficult to separate the function from the person. The superficial attraction of having one person on whom to pin responsibility does not outweigh these problems.
Oliver O'Connor is managing editor, Fintel Publications Ltd
