Govt ‘prepared to intervene’ on broadband

13 May 2005

The Minister for Communications, Marine and Natural Resources, Noel Dempsey TD, has warned the Irish telecoms industry that the Government will intervene if broadband coverage is not improved, particularly in rural areas.

Speaking at the National Broadband Conference in Galway this morning, he said the Government was ready to take action where it felt the market was failing to provide the necessary competition.

“I want to make it clear to industry that I am prepared to intervene in the broadband market where market failure is impacting on key strategic Government objectives such as balanced regional development, participation in the information economy and improved international competitiveness,” he said.

“The challenge for the industry is to build on this Fianna Fáil-led Government’s contribution to the metropolitan area networks [MANs], the Group Broadband Scheme and schools programmes.

“However, where market forces or private investment are unable, or unwilling, to meet broader economic and social requirements, I will intervene on an operator-neutral basis in the market to promote competition and choice for the Irish consumer.”

He continued: “Currently there are certain bottlenecks in this market, which are making cheap broadband in the regions unsustainable. This undermines the prospects for employment growth in regional and rural Ireland. This is a strategic weakness for Ireland that we ignore at our peril. If the market does not deliver, I will have no alternative but to examine all available options to resolve this difficulty.”

Despite the threat to the telecoms industry implicit in the minister’s remarks, David McRedmond, commercial director of Eircom, who had been at the conference, reacted positively to the speech. “It came across as quite a balanced view,” he remarked. “He was saying that good progress had been made but more needs to be done. He’s saying what the industry is saying: we need to go on and get the job done. We need to complete the job of getting 100pc availability of broadband. It’s happening in Northern Ireland and Scotland and we need it to happen here.”

McRedmond said he interpreted the “operator neutral” comments of the minister to mean the Government would be prepared to put out to tender a contract to build additional infrastructure in remote areas, in the same way it had built the MANs.

McRedmond felt the best way to address the broadband deficit in rural regions would be to broadband enable those 10pc of exchanges that Eircom had not been able to for reasons of commercial unviability. He felt that the Group Broadband Scheme (GBS), which was attempting to do this by aggregating demand, was only a “piecemeal” approach. “Why not roll up all that [GBS] money into a big tender to do the last 10pc? If the Government gave us money [to do that] we’d meet it part of the way. But we’re not looking for a load of government money to make this happen. It’s simply so you can get the job done.”

He added: “Even in a year’s time, 10pc of the population will still live in places where they can’t get broadband because there’s no economic case for broadband enabling those exchanges. In Northern Ireland and Scotland the government has given money to BT to enable those exchanges.”

By Brian Skelly