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.