Designing independent & accountable regulatory authorities for high quality regulation

1. 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

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

3. 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

4. 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

5. 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

6. 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

7. 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

8. 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

9. Energy • Commission for Electricity Regulation • Commission for Energy Regulation (CER) • Electricity • Gas • All island energy market

10. 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

11. 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

12. 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?

13. 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

14. 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

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

16. 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

17. Contacts Brendan.Tuohy@dcmnr.ie www.dcmnr.ie