Independence from Government vital if regulators to serve public

In Ireland, as in many other countries, it has been found desirable and necessary to set up specialist, independent bodies to…

In Ireland, as in many other countries, it has been found desirable and necessary to set up specialist, independent bodies to implement the massive changes needed to liberalise markets, at one remove from the political system.

In Ireland, the first utility regulator - the telecommunications regulator (the ODTR) - was rapidly followed by the electricity regulator, and an aviation regulator is to be next.

So how are regulators such as ourselves answerable to the public they serve? What are we doing? Market regulators have what might be described as a subversive job to do, in the sense of upsetting the status quo in key markets and preventing any new status quo cementing itself in place.

The ODTR mission is to facilitate the quick development of a leading-edge, effectively competitive telecommunications market that provides the best in terms of price, choice and quality to endusers.

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Regulators need to establish longterm programmes that cannot be upset by a sudden change of political direction, and take on entrenched interests and make unpopular, specialised decisions.

Real independence is essential to enabling regulators to fulfil their mandates.

To illustrate this point let us consider the vexed issue of MMDS and deflector-licensing. Over the years several ministers sought to deal with this issue, and it seemed to be intractable.

With the distribution of subscribers in key marginal constituencies, the political system found it very difficult to handle. In fact there are relatively few deflector subscribers (some 25,000 in all).

We have now resolved the matter for, as regulator, the ODTR is responsible to the electorate in a different way from that of politicians. We can take decisions in the public interest unencumbered by a marginal-voting situation in the Dail.

The Minister for Public Enterprise, Mary O'Rourke, did a great service towards resolving the problem by simply recognising that responsibility had transferred to the ODTR and respecting its independence, thereby ensuring that we could get to grips with and sort out the issues.

Regulators must act independently, within the framework of powers and responsibilities granted by the elected Oireachtas and the Government in relation to EU measures.

We can act only within our legal mandate and need to look to the Oireachtas or to the EU to extend it, for example, to provide for full copper unbundling of the local loop. Meaningful independence requires that the relationship between regulator and Government and Oireachtas be governed by clearly defined delegation of powers in law.

It is essential that the regulators act properly within their mandate. How can this be achieved in the necessary absence of general policy direction and the right to remove from office?

We are very conscious of our legal obligations and review all our decisions carefully in the light of the powers available. We have taken steps to ensure that decisions are soundly based.

We have recruited a multi-skilled, specialist professional staff and have set up a consultation process, which has been used extensively to elicit views.

The office has developed a user focus among its staff and consultants to ensure that it avoids industry capture, the easiest failing of a regulator faced with very powerful interests.

The ODTR is required by law to explain its activities each year in a report for the Minister and the Oireachtas, and to have the accounts audited by the State's Comptroller and Auditor General, which are also provided to the Oireachtas. These are supplemented by my attendance at relevant Oireachtas committees on a number of occasions each year.

All public organisations, including the ODTR, are accountable to the courts. This is particularly relevant for a telecoms regulator, for this industry is ready and willing to take proceedings where it feels aggrieved.

To date, nine High Court writs issued against the ODTR have been concluded. The ODTR lost only one case at High Court level, but that decision has been unanimously overturned in the Supreme Court.

This shows that the ODTR is clearly acting in a way that has not met with the approval of various interests, but is acting within its remit.

So where does this leave the ordinary citizen? Looking in my postbag, consumer complaints focus mainly on failures by operators to meet consumer expectations in terms of availability, quality or prices of services.

Broadcasting transmission attracts more complaints than telephony, possibly because many telephone complaints fall within the remit of the small claims court.

Substantial price reductions have been made already, for even the threat of competition is sufficient to start price reductions.

In a new market, operators first compete on price, and as prices become very competitive, they must make ever more serious efforts to compete on quality.

Quality improvement requires sustained, fundamental commitment within an organisation.

We are considering ways of ensuring that operators take responsibility for providing service to all their customers and find solutions for those they have failed in some way. They cannot pass off dissatisfied customers as someone else's problem.

Regulators' decisions are about bottlenecks, about opening them up to benefit the consumer, and about designating who benefits/pays for doing so. There are always some unhappy major interests if the regulator is doing his/her job well.

Regulators need to have statutory protection to ensure that they do make the difficult decisions and can roll out a programme over the necessary number of years. They must work within the law, but they must be robustly and unquestionably independent.

Independence of regulators may be highly desirable from the perspective of ministers who are otherwise likely to be asked to intervene in bottleneck-opening or related disputes on one side or the other.

If they have the power to intervene, they are likely to have to become heavily involved: if they intervene they will be automatically seen as helping one side, or if they do not, they will be seen as helping the other.

The key test is whether regulators serve the public interest effectively, whether the systems actually work.

Taking our own case at the ODTR, we still have much to do, but as telecommunications charges fall, as new services come on line and as Irish people are becoming accustomed to real choice in phone services, I leave it to you and other consumers to make this judgment.

Etain Doyle is director of telecommunications regulation; this article was written on July 20th