Ireland must confront broadband woes

31 Oct 2002

“Inadequate broadband infrastructure is eroding Ireland’s competitive position and impeding the development of a knowledge-based economy.” Had that been a motion at last week’s annual conference of IBEC’s Telecommunications and Internet Federation in Dublin, it would have been a one-sided debate because consensus was the order of the day.

Speaker after speaker extolled the virtues of a robust telecommunications infrastructure and widespread, cheap broadband internet access. Countless examples were given of how Ireland would be sucked down the economic plughole or relegated to the league of OECD (the Organisation for Economic Co-operation and Development) dunces unless it got its broadband act together.

Setting the tone was IDA chief executive Sean Dorgan (pictured) – the Alan Greenspan of Irish industrial policy – who outlined his blueprint for economic survival. This involves moving from a low-cost production-based to a high-value knowledge-based economy. “We are operating in a different competitive environment – we are competing against the advanced countries of the world, not the developing ones,” he said.

Endorsing the national spatial strategy, which aims to devolve industrial development from the capital to regional growth centres, he said that countrywide high-tech clusters in niches, such as, digital media and communications management software, would define the economic landscape of tomorrow. Enabling this vision, however, would require a superior telecoms infrastructure than we currently possess. Without world-class connectivity and physical infrastructure, without lower costs for internal telecoms traffic and without more choice of telecoms providers, investors would either stay away or pack up their bags and locate elsewhere, he warned.

William Burgess, chairman of IBM Ireland and the National Competitiveness Council (NCC), was even more blunt. Referring to the recent OECD report in which Ireland was ranked 15th out of 16 countries in terms of access to broadband, Burgess predicted dire consequences if Ireland didn’t rectify its broadband deficit. Unsurprisingly, the NCC, a body set up to advise the Government on competitiveness issues, had identified competition in the telecoms market, or lack thereof, as one of the key issues to be addressed. Burgess called for action on a number of fronts, including more competition to drive down ISDN costs, a review of DSL wholesale prices by the Office of the Director of Telecommunications Regulation (ODTR) and the transposition of the EU regulatory framework to Irish law so as to give greater enforcement powers and fine-levying ability to the ODTR.

On a more strategic level, Burgess called for stronger Government leadership than had been in evidence of late and the creation of an e-ministry as a single point of responsibility within the Government for these matters. “There are two Government ministers at this conference,” he said referring to fellow speakers Ministers Mary Hanafin and Dermot Ahern, “surely that tells us something”.

The conference had been downbeat to that point but would the telecoms operators Eircom and Esat BT pull a rabbit out of the hat and offer hope for the future? In the current depressed climate, the theme of Philip Nolan’s conference address, ‘Towards a healthy telecoms sector’, seemed about as realistic as Osama Bin Laden heading to Florida on his holidays. The Eircom CEO said that the “flight of capital” from the telecoms sector was the biggest challenge it faced and would be a major drag on the ability of any telecom to invest in new services and infrastructure.

Echoing his rival’s analysis, Esat BT’s CEO Bill Murphy said ‘build it and they will come’ used to be the war cry of the sector, but not anymore. Cash-strapped operators are talking a new language. “As a telecom, we are saying to people, ‘where do you want broadband?’ and if enough of them come together in a community to make it economically viable, we will do it,” Murphy said. This strategy worked well in Cornwall in the UK where local communities, government and BT had all worked together to get the broadband service and the same could work in Ireland too, Murphy argued.

What Ireland’s main fixed-line operators were saying boiled down to one thing: we can only roll out broadband networks where it is profitable for us to do so, and at the moment, there are not too many places outside the main urban centres where this is the case. So, Mr Government, it’s over to you to make it happen.

This did not chime at all well with the views expressed earlier in the conference by Mary Hanafin TD, Government chief whip with special responsibility for the information society. She noted the Government had already spent €200m on bringing broadband to various regions, adding: “We are playing our part; the private sector needs to play its part.”

If there was a suggestion of an impasse between the Government and industry on the provision of broadband, the closing speaker Dermot Ahern TD, Minister for Communications, wasn’t listening. Determined to end the event on a high note, the Minister announced a new policy directive recommending the introduction of flat-rate always-on internet access and promising that the Commission of Communications Regulations – the long-awaited successor to the ODTR – would be convened “very, very shortly”.