Critics find flaws in regional strategy

25 Mar 2004

While progress on the broadband rollout has been welcomed, there has been some criticism. Lobbying organisation Ireland Offline has been critical of the way in which the Group Data Scheme has been set up. Chairman Christian Cooke says experience in the UK showed that providing broadband service in rural areas was not economically viable and did not provide the level of return on investment to make it a commercial proposition. As a result, he said, a number of companies providing rural broadband access in the UK have gone out of business, despite receiving government funding.

According to Cooke, the only viable model for rural broadband is to allow communities to go it alone using not-for-profit structures without being required to partner with a broadband internet service provider. Otherwise, he says, there is a real risk that commercial providers will cherry pick only those communities capable of providing a revenue stream.

“In its current form, the Group Broadband Scheme bears no resemblance to the Group Water Schemes, to rural broadband provision,” says Cooke, “and every resemblance to the packaging of subsidised local monopolistic franchises, monopolistic because no competitor could go head-to-head with a subsidised service.”

The recently switched on Cork metropolitan area network (MAN) also came in for criticism in a report prepared for Cork City Council by PA Consulting, which used it as a model to assess potential problems for other MANs around the country. The report benchmarked Cork against five European cities: Aarhus (Denmark), Aberdeen (Scotland), Bilbao (Spain), Montpellier (France) and Tampere (Finland). While Cork compared favourably, one of the main criticisms in the report was the cost of linking the MANs to the national backhaul.

The report claimed that Esat BT and Eircom were charging very high rates for backhaul connectivity and that the third, and most recent, operator ESB Telecom (ESBT) was setting its prices so as to undercut Esat BT and Eircom by a fixed margin.

Since the preparation of the report, however, the Communications Department has announced that Esat BT is to cut its backhaul rates substantially.

The report welcomed the creation of a carrier-neutral internet protocol point of presence (PoP) saying that it would provide a facility where all service providers could locate without any one service provider having control of the facility. Service providers would also be saved the cost and duplication of effort of building their own individual facilities. “In addition, a scalable independent data centre should be created at the carrier-neutral location to offer data services to local businesses and ISPs [internet service providers],” the report reads. “In this respect, it could facilitate companies that would require back up/disaster recovery for their own data rooms. Moreover, if a number of ISPs were co-located at this facility it would enable businesses with large data traffic to interconnect with a number of ISPs. The data centre could start off on a reasonably small scale and then grow as data services requirements grow.”

The report also called for the creation of multiple rather than single points of contact between the MANs and the national networks. “[A] single point of access from national networks to the Cork City MAN represents a single point of failure,” reads the report. “Therefore, consideration must be given to the provision of back-up facilities for the carrier neutral IP PoP to ensure resilience. In addition, the Cork City MAN will effectively be competing with Eircom’s and Esat BT’s city networks and therefore it must offer its customers (other service providers) flexibility in terms of where they wish to interconnect with national (and therefore international) networks.”

As for the managed services entity (MSE), if it is to compete successfully with the incumbent operators and attract more service providers to the market it must achieve a level of excellence. Failure to do so, reads the report, would have a deleterious impact on the confidence of potential customers and would reduce the chances of success of the MANs and thus the State’s return on investment.

“It is critical that the MSE guarantees the highest levels of service quality, affordable pricing options and flexibility if it is to become a credible alternative in the Cork telecommunications market and gain the necessary return on investment. In addition, a cohesive marketing programme will be an important aspect of attracting traffic to the Cork City MAN. Moreover, the MSE must work in partnership with its customers to provide them with the necessary support to compete effectively with the dominant service providers,” the report concludes.

By David Stewart