Plenary, 21 Nov 2001

Meeting date: Wednesday, November 21, 2001

Official Report 354KB pdf

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Atlantic Telecom

We now move to the emergency question that the Presiding Officer accepted this morning.

To ask the Scottish Executive what discussions it has held with Her Majesty's Government concerning the impact on Scottish businesses of the receivership of the telecommunications company, Atlantic Telecom.

I have been and remain in contact with the Office of Telecommunications, the Department of Trade and Industry and British Telecommunications to discuss potential solutions to this serious situation. As a result of my suggestions to Oftel and the DTI, Oftel has agreed to press BT to add further information to its general message directing callers to directory inquiries and to encourage directory inquiries services to be updated as quickly as possible.

I shall allow a limited number of supplementary questions.

The minister will be aware that many domestic users and Scottish businesses, many in my constituency, are due to have their telephones cut off this Sunday. That will have a devastating effect on business because many businesses rely heavily on their telephone number being known. I was therefore pleased to hear the minister's answer this afternoon and I ask that representations continue to be made to Oftel and the DTI to ensure that this never happens again. What can the minister say to reassure us that it will not happen again?

Earlier today, I met the Scottish Chambers of Commerce and the business representatives of the campaign to stop the closure of Atlantic Telecom to hear their concerns and I plan to meet the receivers, PricewaterhouseCoopers, tomorrow to discuss the various options. There is a growing appreciation in the industry that we need to have long-term arrangements to deal with the circumstance in which an operator goes under, similar to the Association of British Travel Agents scheme that operates in the travel industry and with which members will be familiar. We will make representations for the setting up of longer-term insurance arrangements to ensure that the situation does not arise again. However, that does not preclude action in this case.

I remind members that regulation is a reserved matter whereas the impact of the situation is a devolved matter and I ask them to frame their questions accordingly.

I wish to declare an interest as the Aberdeen and Dundee offices of the North-East Scotland SNP MSPs have Atlantic Telecom systems.

Obviously, the effects of the Atlantic Telecom collapse on customers and staff in Scotland have been nothing short of disastrous. Is the minister aware that any telephone number that was issued by Atlantic Telecom will close down this weekend, even if the customer has already transferred to another provider? Does the minister agree that telephone numbers that were assigned to Atlantic Telecom were accepted by customers on the basis that they were transferable? Will she press the DTI, Oftel and the telecommunications industry to honour that promise?

That matter is under discussion at the moment. BT has made it clear that enabling people to maintain their current telephone numbers would be a complex exercise, would cost in excess of £1 million and would take 40 to 50 days to complete. Public subsidy to BT on that scale would almost certainly break European state aids criteria. There are other forms of public subsidy that might be able to help businesses that have been affected, but the difficulty is that bankruptcy and insolvency legislation lays down incredibly strict rules about the money that comes in during the period of administration having to benefit the creditors.

There is a longer-term issue about the portability of telephone numbers, which Oftel should deal with, and a short-term issue about finding a way in which to give aid to the affected businesses within the tight regulations that we find ourselves bound by.

Atlantic Telecom went into administration on 12 October. I would like the minister to inform the chamber when her department first had discussions with the administrators about the potential problem. Why has BT been singled out as providing the only possible prospect of rescue? It might be appropriate to consider a consortium of rescuers. Surely there is scope for the negotiation of some acceptable interim custodial arrangement to enable the provision of an essential service to continue.

I hope to pursue two issues with the administrator tomorrow. Other operators have said that they could provide a call-forwarding service. I instructed my officials to talk to the companies that have written in the past 24 hours. I have also asked that the receiver explore whether those other operators could also provide a care-and-maintenance service for an interim period that might allow the numbers to be retained. That exercise is being carried out by my department, the DTI and the administrators. I hope to know more after tomorrow's meeting.

The moment that the issue was brought to my attention, I immediately instructed my officials to write to the DTI and, through it, to Oftel. I am not aware of when the first discussions took place between the administrators and the officials but I would be happy to write to the member with that information.

As the minister knows, Atlantic Telecom was headquartered in Aberdeen. Not only does its liquidation affect 1,000 businesses in the north-east in the way that Pauline McNeill detailed, but there have been about 900 direct job losses throughout the United Kingdom, many of them in Aberdeen.

Please ask a question.

The loss of Atlantic Telecom has been particularly disappointing for Aberdeen in its move to diversify its economy.

Ask a question, please.

I am just coming to my question. Will the minister assure me that she will support local initiatives that are aimed at broadening the economic base of Aberdeen in the light of the loss of Atlantic Telecom?

In the newspapers there have been some wildly inaccurate figures for knock-on job losses. We are determined to do everything that we can to ensure that knock-on job losses do not occur as a result of the situation. That is why important meetings are taking place today and tomorrow to try to ensure that a call-forwarding mechanism or care-and-maintenance arrangements are possible.

On direct job losses, the Scottish Executive's partnership action for continuing employment rapid response arrangements will be available to those who have lost their jobs directly through the liquidation of Atlantic Telecom.