Regulators not there to champion consumers

Anyone struggling through Dublin airport last weekend - or any other busy weekend this summer - is unlikely to have warm feelings for Mr Bill Prasifka, the aviation regulator.

If - as expected - he confirms today that he is to allow Aer Rianta to increase its charges it will be the latest example of a Government appointed independent regulator allowing an increase in prices without consumers first seeing a tangible improvement in services.

Similar increases in electricity and cable television services are also in prospect, thanks to the actions of Mr Prasifka's counterparts in the power and telecommunications sectors. It is not a very satisfactory state of affairs and hardly the scenario that was envisioned when the regulators were established, starting with the telecommunications regulator in 1997.

Today's announcement from Mr Prasifka follows a preliminary decision in June to allow Aer Rianta to increase its charges in Cork by 94 per cent, in Shannon by 37 per cent and in Dublin by 9 per cent. Mr Prasifka is expected to confirm these increases, although he may rebalance the charges to favour the regional airports following a direction from the Government.

The price increases are linked to improvements in services by Aer Rianta but for the time being using the main terminal in Dublin Airport will remain an experience akin to running a paratroop assault course. It will just make your airline ticket more expensive.

Over at the Office of the Director of Telecommunications Regulation, Ms Etain Doyle has also flexed her muscles recently. Last week Ms Doyle indicated that she was minded to approve a price increase by NTL, the former Cablelink, which has a monopoly over cable television services in Dublin, Limerick and Galway. The company wants to introduce a standard charge of £136 (€173) for all its customers which will mean an average increase of 34 per cent for its 370,000 customers. The company has sought the increase despite failing to meet targets agreed with the regulator for upgrading its network to carry digital signals. NTL has also pulled back on its commitment to offer telephone services and is now saying that if it gets the increase it might be able to offer the digital service that was promised to 110,000 subscribers in March.

Ms Doyle had already indicated that she will look favourably on a similar application from Chorus, NTL's competitor - which operates cable television in Cork and outside Dublin. Chorus wants to increase prices for its 250,000 customers by 29 per cent and has also held out the carrot of finally rolling out a delayed digital network if it gets its increase.

It also emerged last week that the electricity regulator, Mr Tom Reeves, is going to allow the ESB increase its prices from October, some three months earlier than had been expected. The increase is understood to be in the region of 8 per cent which would boost the average annual household bill from £330 to £356. In fairness to the ESB there is not much it can do to improve its product, but it still represents a failure of the regulatory process that the regulator has failed to deliver the competition which in turn - the economic text books tell us - should have delivered lower prices.

The deregulation of the electricity market has been something of a failure to date with many of the first wave of new entrants pulling out, most recently ePower which departed the scene earlier this month. It was preceded by Scottish Power, BP and CRH. One of the departing players, Mr Leslie Buckley of ePower, was do disenchanted he called on Mr Reeves to resign.

The argument now being put forward by those in favour of the hike in the price of electricity is that the increase is needed to make it profitable for the private players to enter the market. Quite how this is in the consumers' interest is not immediately apparent.

The reality is that it is seldom, if ever, in consumers' interest for prices to rise. But it is also the fact that despite what people may think, industry regulators are not there to champion the rights of consumers. The role of the regulators is - to paraphrase the policy document Governance and Accountability in the Regulatory Process which was published last year by the Department of Public Enterprise - not to enforce competition law or uphold consumer rights. The Competition Authority and the Director of Consumer Affairs are responsible for these areas.

The job of the regulator - as outlined in the policy document - is to "facilitate market entry, ensure fair market conditions and customer protection and ensure that all users have access to a basis level of services at reasonable prices". Whether the recent action of the three regulators fit the above description is an arguable point, but all three can make a strong case that they do.

There is one area in which the regulators have been a runaway success as far as the Government is concerned. Their establishment has put some daylight between the Government and unpopular increases in the price of basic services. If the regulators had not been established the Government would have had to directly sanction the price increases that are being put through by the regulators.

Being associated with an increase in the price of anything is not something Ministers like. Not only are they politically unpopular they tend to feed directly into the Consumer Price Index.

It is no coincidence that it has taken the establishment of an "independent regulator" for the ESB to get its first price increase since 1993. By the same token CI╔ - which awaits the creation of the promised transport regulator - has been told to forget about Government-sanctioned fare increases this side of the next election.

jmcmanus@irish-times.ie