Where next for broadband policy?

An Irish government report was issued today that made for pretty depressing reading when it comes to progress in broadband rollout in Ireland. Why is this important to us here? Increasingly, all of our businesses are depending on having access to low-cost high-speed internet access and more importantly that our customers have this access. When people have access to decent broadband they do more online and stay online longer.

Internet speeds in Ireland, while they have increased slightly, are still “substantially below the fasts speeds available to customers in other OECD countries” according to the report. Furthermore, “businesses in many other countries can also procure significantly faster services for the prices charged in Ireland”.

The fastest home broadband in the country of just 20 mb/s will only become available to 35% this year with the rollout of UPC cable services. However the cost of this service is the same as the average cost of a 50 mb/s service across the OECD countries.

We are “3-5 years behind our competitor countries” in terms of the rollout of infrastructure that is capable of supporting our needs into the futures.

The criticism is very clear. We have a poor service at rip-off prices.

So what’s to be done?

The report suggests that regulation governing Eircom should be relaxed to incentivise them to invest further in infrastructure. Currently they are limited to earning a mere 10% return on investment. Would it not be reasonable to  increase this to 12-13% on the basis of a more extensive rollout of a high bandwidth network?

The report also recommends that regulation which limits co-investment by a number of operators in infrastructure be “lightened or removed”. So currently, if  BT and Vodafone seek to come together to jointly build a single infrastructure which both can use in the future, the regulation currently in place is not conducive. There are obvious economies of scale in allowing competitors work together to invest in better service.

Since more and more broadband is being accessed via mobile and wireless spectrum there is a clear call that with the switch-off on analogue TV planned for 2012, that the released spectrum be made available to broadband services as a priority. Worryingly, there is a clear indication in the report that the government doesn’t actually believe the 2012 deadline will be met.

A final recommendation made in the report is that the State should take an even greater role in infrastructure development. It cites the success of the rollout of MAN’s in certain regional towns where the speed of access provided by the new competitors exceeds that of Eircom. Ironically the government which sold its broadband infrastructure with Eircom six years ago is now seeking to build a brand new infrastructure based on other State assets such as the electricity network.

Perhaps it is time for the government to step in and relieve the ineffective incumbent of their responsibilities and take back control of such a critical national asset.

6 thoughts on “Where next for broadband policy?

  1. Hi Bernie. With a debt in the order of €4 billion, Eircom might actually be happy to be relieved of their responsibility in return for some much needed cash.

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  2. When will it dawn on most people in the republic of ireland that the reason your broadband rollout is so stunted has nothing to do with ‘incentivising eircom’ and all the rest of the flanneling nonsense so beloved of the conservative political classes in this country.

    It’s to do with control of the media in a potentially politically unstable country, north and south.

    Wake up!

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  3. I also agree that building this infrastructure needs to be the responsibility of the state.

    Unfortunately capitalism has not proven to work very well when it comes to the build-out of telecommunications infrastructure.(The tax payer ends up paying twice when its private companies who wish to operate cough..cough..ATM’s….cough..infrastructure)

    If you look at Telecom Eireann which was formed in 1983 to convert the old analog telecoms infrastructure which was in a dire state to digital you can see as clear as day how much more effective it was before it was privatized.

    Took them 7 years to bring our fixed line infrastructure from one of the worst in the world to one of the most advanced.
    And that timespan includes the time spent building mobile infrastructure(eircell).

    Its too late for Eircom, the government shoudn’t touch it with a ten foot pole. The copper assets are costly to maintain(the private companies that where in charge since have not maintained them properly) and essentially useless in terms of progressing the effectiveness of our infrastructure(reaching the limits of copper).

    The government need to focus and do what Australia has recently decided to do. Tell the private companies which are asking the government for handouts to fuck off. Build it themselves rather than putting 2.5billion into the TIF(union for corporations like oracle, eircom etc) cookie jar of competing technologies(some of which are archaic).
    I mean they say they don’t have enough money to build it but oracle(one of TIF’s members is one of the top companies in the world in terms of annual profit last time I checked). And thats ignoring 02, vodafone etc who always boast massive profits yearly from outrageous charges(line rental on wireless anyone?).

    They need to invest in fibre, use the exemplar network as a base and work their way out across the entire country(not just densely populated areas). Fibre does not expand and contract with heat etc and flooding has no affect on it.
    Its one of the cheapest infrastructures to maintain and would be far less costly than Telecom Eireann was.

    They could operate the infrastructure on an open access basis and gain returns from companies leasing access(This keeps the costs down as you are in charge of infrastructure not selling a service to citizens).
    This way the money that the government invest in broadband could be made back at some point rather than just handing out tax money to private entities.

    They should build a line from Ireland to the states which they could also gain a return on from as other countries in the eu would be paying for usage(normal) while giving citizens and companies in Ireland an advantage of low bandwidth costs(maybe no bandwidth cost) which is important for businesses like youtube for example.
    This would essentially be a “real” smart economy as it would give more businesses incentives to set up shop in Ireland and thus create jobs.
    It would also lower the barrier to entry for Irish startups in this area which is just as important.

    As for wireless technologies, well that needs to be looked at “after” fibre is rolled out adequately. The effectiveness of any wireless technology is directly linked to the quality of fibre back bone. If fibre is available to the extent that dsl is today then the wireless should be deployed in a two pronged approach, taking advantage of the RTENL transmitters which are currently used today with a mesh spanning across peoples fixed line fibre connections.
    Maybe then we will be able to claim 99.9% geographic coverage rather than population coverage and maybe then we will be able to boast the fastest wireless wide area network in the world.

    Another reason to tell TIF to fuck off is that they are against net neutrality, they would prefer you pay to view a blog because building infrastructure to cope with rising demand is not profitable enough for them.
    If we keep in the direction we are going then you can expect organisations like TIF to dramatically change the face of the internet due to greed and an inability to do their god damn jobs properly.

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