asked the Minister for Communications in respect of each application to increase a charge for telephone services under section 90 (2) of the 1983 Telecommunications Act or previous similar enactment, the scientific, social and accounting basis upon which Telecom Éireann calculated the scales of telephone charges; whether in respect of each such application the company supplied him with information regarding any cross-subsidisation by business or domestic users, by international or local callers, or by any other category and, if so, the nature of the information; and the way in which the present scale of charges in each category compares with those in each other EC country.

Tariff principles for telecommunications services have developed historically out of a complex trade-off between commercial considerations and universal service goals rather than in response to articulated scientific, social and accounting bases.

Two applications for increases in charges have been considered since the passing of the 1983 Act and these were evaluated against the requirement placed by the Act on the company to keep its charges for services at the minimum rate consistent with meeting approved financial targets and to ensure that the revenue of the company is sufficient to meet all charges properly chargeable to revenue account, generate a reasonable proportion of capital needs, remunerate capital and repay borrowings.

So far as cross-subsidisation is concerned, the legislation setting up Bord Telecom Éireann acknowledges, in granting its exclusive privilege for providing telecommunications messages within the State, that a viable national telecommunications system involves subsidisation of some loss-making services by profit-making services. It is clear, therefore, that any uniform structure of telecommunications charges must involve complex systems of cross subsidisation.

Because of the variation and complexity of pricing structures, and leaving aside altogether currency exchange considerations and problems of purchasing power parities, a comparison of telephone charges between different countries is seldom straightforward. However I propose to circulate in the Official Report a tabular statement showing a comparison of telephone charges in the various EC countries.

Comparison of Telephone Charges in EC Countries

*Rental charges vary according to the number of customers available at the local call rate or the geographical location of the customer.

Will the Minister circulate details of the cross-subsidisation of the different categories of user in the present tariff structure? Will he indicate if this cross-subsidisation has the effect that provincial callers are charged a larger sum than they might otherwise be charged if the calls were priced on commercial grounds and does the same apply in the case of international calls?

In general terms, under the present structure the more frequent users subsidise the lower users, business customers subsidise the residential customers, areas with high telephone density subsidise the low density areas, call charges subsidise rental and connection charges, short local calls subsidise long local calls and international charges subsidise national charges. That is roughly the way the system works.