Jersey: Legislative Framework Lodged For Independent Competition Regulator

Press Release

16 November 2000

A draft law which, if approved, will establish the Island’s first-ever independent competition regulator is lodged today by the Industries Committee.

To be called the Jersey Competition Regulatory Authority (JCRA), its initial role will be to licence and regulate telecommunications and postal services in the Island but the aim is that eventually it will also regulate other public utilities (such as the Jersey Electricity Company), encourage competition and investigate monopolies.

‘The decision to establish the JCRA as an independent regulatory body emerged from the fresh consideration given earlier this year by the Industries Committee, together with Policy & Resources and Finance & Economics, to the proposals for the incorporations of Jersey Post and Jersey Telecoms,’ explained committee president Deputy Maurice Dubras.

‘The need has been identified for a clearly independent regulator who will be able to look after these sectors with clear legal duties to secure the provision of services and to promote the interests of customers, where possible through competition.’

The committee’s decision took on a wider dimension in September when the States approved the anti-inflation strategy and asked the Industries Committee to bring forward the necessary legislative framework for a competition policy for the Island. Accordingly the aim is that the JCRA, once established, should gradually develop into a fully-fledged competition authority with the power to act in both the public and private sectors.

‘It was made absolutely clear during that debate that it is very important to carry the attack on inflation into the marketplace,’ added Deputy Dubras. ‘There is a lack of competition in many product markets, not least the public utilities, and the discipline of competition will force firms to seek out efficiencies rather than simply raise prices.

‘Where there are apparently natural monopolies, such as perhaps in some public utility areas, an independent regulator will act as a proxy for competition through statutory regulation with the specific purpose of promoting customer interests.’

It is envisaged that the JCRA will ultimately be self-funding, covering its costs through the income received from licence fees. Until that self-sufficiency is achieved, and to meet the inevitable start-up costs, funding – estimated at £200,000 for recruitment and start-up and for 2001 – will be borne by the Industries Committee.

However, although ‘sponsored’ by that committee, the JCRA will be completely and deliberately independent from the States in its licensing and regulatory roles.

This is particularly important in such sectors as telecommunications and postal services where regulation, in meeting the needs of users and consumers, may run counter to the interests of the States as the major shareholder of a service provider.

The Industries Committee plan to have the JCRA up and running during the first quarter of 2001, and then to return to the House with a framework for competition policy by the end of the year. Staffing requirements will be considered under the Regulation of Undertakings Law but, because of its independence, any staff will not count against civil service numbers.

‘Staffing needs for the time being will be fairly small,’ said Deputy Dubras, ‘but this is a new function and it must be resourced appropriately.

‘It will take time, not only to establish a competition policy and get it to take root in the Island’s markets but also to develop lasting structural changes in the labour market and effective independent regulation of the utilities, but the rewards will be great for the overall efficiency of the Island’s markets.’

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