Lobby group criticises Group Broadband Schemes

8 Mar 2004

A sceptical internet lobby group, Ireland Offline, has attacked Communications Minister Dermot Ahern’s €25m Group Broadband Scheme, labelling it as an attempt to force local communities into deals with profit-oriented internet service providers. It also warned that experiences in the UK with such rural schemes prove not to be financially viable.

Ireland Offline warned that communities would be better served by creating not-for-profit co-operatives rather than going with broadband service providers that would shut down if the venture proved financially unviable.

Yesterday Ahern unveiled a €25m investment programme to deliver broadband to small rural towns across Ireland over the next three years. The programme, aimed at bridging a potential urban/rural digital divide, will be run along the lines of the Group Water Scheme with the Government paying for 55pc of the cost of bringing broadband to towns of less than 1,500 people.

The first call for proposals from would-be applicants will be made today (Monday 8 March). Additional calls will be made every six months. Modelled on the Group Water Scheme, the €25m programme will empower local communities to draw up and implement their own broadband plans in partnership with broadband service providers utilising a range of access technologies including copper, fibre, wireless and satellite.

However, Christian Cooke, chairman of Ireland Offline, said that the Group Water Scheme set up in the 1960s to bring piped drinking water to rural areas resulted in supporting only 10pc of all Irish households.

Ireland Offline pointed out that in the UK, the commercial provision of broadband in rural areas has proven not to be financially viable. Low population and wide dispersal lead to lower margins than can be supported by a profit-oriented enterprise. As a result, a number of companies providing rural broadband access in the UK, all supported by State funding, have gone out of business over the last year.

The lobby group pointed to non-profit co-operatives providing affordable access to rural communities such as the Knockmore Community network launched last month.

“Rural communities have no intention of being left behind in broadband infrastructural development, as was the case with water supply, electrification and telecommunications”, the lobby group stated. “However the initiative in its current form ignores the fact that many of these areas most in need of funding are not economically viable for a profit-oriented entity to roll out services in, in terms of maintenance and ongoing costs (bearing in mind that the group broadband scheme funding only applies to set up costs).

“The only business model that has been shown to have been effective in rural communities elsewhere is for non-profit community-owned and -run networks to be set up, which are not reliant on generating revenue but whose focus is to provide a service to the community,” said Cooke.

“Rural communities, given the small margins they expect to deal with, should neither be expected to shoulder the additional burden of consultation in setting up and running cooperative networks, should this be the role of the BISP (broadband internet service provider), as this would negatively impact the sustainability of the initiative. This would be compounded by the reluctance of the community to engage the consultants further when issues arise for fear of incurring further expense,” Cooke said.

He went on: “In short, in its current form the group broadband scheme initiative bears no resemblance to the group water schemes, to rural broadband provision and every resemblance to the packaging of subsidized local monopolistic franchises, monopolistic because no competitor could go head-to-head with a subsidized service. It is therefore better to think of them as not so much like group water schemes as ‘group coca-cola schemes’.”

For this reason, Cooke said, unless provision can be made for the ability of community-run, community-owned non-profit networks to apply for and receive funding under the initiative, it is inappropriate for the Minister to refer to this initiative as addressing the broadband needs of rural communities.

By John Kennedy