Ireland's poor reputation concerning its lack of high-speed internet connections is not an obscure technology issue. It is of fundamental import to economic and social development, and is vital for the Government's oft-mentioned but rarely explained desire to create a true 'knowledge-based economy'. It is arguably as important today as electrification was at the beginning of the last century.
The good news is that broadband availability has improved over the past year -- admittedly from a poor base -- and per capita penetration across the Republic almost doubled to 12.5 subscriptions per hundred inhabitants in 2006. The latest OECD rankings of 30 developed economies show Ireland had the fifth-fastest broadband growth rate last year, but we still languish in 23rd place in terms of comparative penetration.
Up until relatively recently, Government (and Eircom) spokespersons would trot out the evasion that poor broadband penetration was a demand issue: Ireland's educated populace just wasn't interested in solid connections to the global information superhighway, and sure half of them don't even have a computer in the house to begin with...
Wrong. Demand is stimulated by supply and price. If the product is not available, and the price is too high anyway -- in this case because of an uncompetitive marketplace -- it doesn't take an economist to calculate that the product (broadband packages) isn't exactly going to fly off the shelves. Consumers favour commodities that are available and affordable.
In terms of driving PC penetration, the Government launched the Home Computing Initiative in April. This sensible idea means employers can give a subsidised home computer to staff for a few euro knocked off their monthly wage packet, and AIB Corporate has already volunteered to offer firms the necessary financial service. However, there is still no sign of tax breaks for investing in domestic or business information technology (IT), as is the deal among several of our European neighbours.
High-speed broadband allows workers to be productive at home. It removes cars from the roads, assists the development of cottage industries, and facilitates cheaper communications, such as internet telephony. It is the silk that connects us to the web.
Depending on who you talk to, between 10 and 25 percent of the population cannot get any access to broadband, particularly in rural areas, where it is most needed. Our rocky, waterlogged and mountainous topography militates against the economic viability of providing cheap and profitable wired or wireless broadband.
Minister for Communications Noel Dempsey recently scrapped the four-year-old Group Broadband Scheme (GBS) designed to bridge the rural digital divide. He said only 120 lay communities made it through the rigorous, bureaucratic, technical, legal and planning hurdles necessary to qualify for grants handed out after the expensive and complex hardware required to build a local broadband service was purchased. That's around 7,000 subscribers out of a potential total of 450,000. As Dempsey rightly pointed out to ENN, at this rate it would have taken 10 or 20 years until the whole country was covered.
"After two rounds of [the GBS] I decided this was not the way to do it. That's why we've gone the route we've gone: national broadband scheme; national tender identifying all of the areas where we haven't got broadband currently; and saying [to private operators] provide it... and what's it going to cost us?"
Dempsey said his decision wasn't unanimously supported by his advisors, and officials seconded to the department from county councils to guide communities through the labyrinthine GBS told ENN the scheme was "unceremoniously dumped without notice" just when applications were reaching critical mass.
Eircom, the state telecommunications infrastructure legacy owner which charges the highest line rentals in Europe, is currently broadband-enabling the 419 rural exchanges it formerly said were economically unviable. Its timescale is two years. It is understood Eircom's new boss, Piere Danon, thinks it could be done in around 14 months, and reputedly blames institutional inertia within the Irish telco for impediment and delay.
Eircom's frustrated competitors are worried by its new dynamism. The Australian-owned telco recently announced it is investing EUR30 million to build a Next Generation Network (NGN), although probably just in urban areas. This fibre-based network (as opposed to copper) will be powered by suitcase-sized digital switches. Local Loop Unbundling, whereby Eircom's competitors can insert their own broadband equipment into Eircom's exchanges, will become a red herring and squillions may have been wasted.
The next logical step would be for Eircom to sell off the properties it no longer needs for old-fashioned phone exchanges and support installations, netting its employee share ownership scheme and Aussie investors bucketloads of Celtic Tiger property market cash.
Market regulation is therefore necessary. The Government's communications bill, designed among other things to reinforce ComReg, is currently before the Oireachtas. Brussels will no doubt be observing its passage, and impact.
If enhanced regulation doesn't work, the State will have to step in to furnish us with the ubiquitous broadband infrastructure the private sector either can't, or won't, provide. It might do this by connecting the communications assets of semi-states with the publicly funded Metropolitan Area Networks (MANs), and force Eircom to split its retail and wholesale divisions a la BT in Britain. We'll have to wait and see.
Never mind roads and rails, sanitation, security, health, energy and education, the next government now has technology infrastructure to deal with too.
Autor(en)/Author(s): Maxim Kelly
Quelle/Source: ElectricNews, 04.05.2007
