No one shouted start: broadband and Ireland’s rural economy

3 May 2016

The furor around the delay in starting the National Broadband Plan rollout indicates just how high the stakes are for Ireland's rural economy

Reaction to the delay to the National Broadband Plan rollout is a sure sign that it cannot happen soon enough for rural Ireland, writes John Kennedy

Around 48 years ago, a journalist called John Healy, author of the Backbencher political column in The Irish Times, published a seminal work entitled ‘No One Shouted Stop (The Death of an Irish Town)’, which centred on the economic decline of his home town of Charlestown, Co Mayo.

The book documented the struggle of life in a town land blighted by emigration and poverty and a reliance on the regular cheque home from overseas.

Almost five decades later and many towns in rural Ireland are possibly emerging from an eerily similar traumatic period that began with the property and banking collapse of 2008/9, that saw the spectre of emigration return and, now, lots of empty windows occupy spaces on main streets where businesses used to thrive.

‘The importance of the National Broadband Plan economically and socially is just as fundamental as rural electrification of the country was in the 20th century’

Despite this, thankfully, Ireland has come a long way from the privations of Healy’s time and I have many reasons to expect the best is yet to come for the rural economy of Ireland. It’s almost eight years since the recession began and Ireland has re-emerged as one of Europe’s fastest-growing economies. If you believe the headlines, people are returning at a rate of 1,000 a week and every month new jobs are being created in 21st-century industries from tech to fintech and pharma.

While you may argue that rural Ireland has yet to see the benefit of this, my argument is, why not?

The future may be all about cities, but Ireland, its land and its people have something unique and a thriving rural economy is vital to the future of life on the island.

A key component to that future is connectivity – not just transport – but digital connections to the world, and Ireland is smack bang in the centre of the global digital economy.

Think about the fibre networks coming ashore in Mayo in the west of Ireland, the €850m Apple data centre in the so-called low-lying fields of Athenry as Pete St. John wrote it, a Facebook data centre in Meath, and the island’s location as the last landfall connecting Europe with north America.

Ireland is no longer on the edge, but at the very heart of the digital revolution.

Broadband is not an economic silver bullet, but it helps

Having spent much of the period between 2001 and 2012 lamenting any clear and decisive action by the successive Irish governments on broadband connectivity, I was thrilled when a process started while Pat Rabbitte was Minister for Communications and carried through by his successor Alex White.

The National Broadband Plan, budgeted at between €280m and €500m with EU support, is a bold one and aims to traverse 100,000km of road, 96pc of the country’s landmass and connect 1.8m people in 750,000 postal addresses to a minimum of 30Mbps download and 6Mbps upload speeds.

The plan – described as an intervention – aimed to address the anomaly whereby a digital divide was created in rural locations because telecoms operators had decided it made no commercial sense to serve them.

The importance of the National Broadband Plan economically and socially is just as fundamental as rural electrification of the country was in the 20th century.

It is more ambitious than most other European countries’ plans, is future-proofed to ensure that it will constantly be developed and modernised and 1.8m people were hoping it would be completed by 2020.

And then the bombshell last week: the plan would be delayed because officials needed time to properly assess applications and it could be 2022 by the time the project is finally completed.

Anyone who lives in the countryside – as I do – knows even more keenly how digitally-centric our lives have become. It enables you to work from home, if you want to work at Apple or Amazon you need to have high-speed connectivity at home, and key services ranging from e-commerce to motor tax to online banking depend on it.

And yet, there are very few of us who live in the country who do not have relatives who have to make their way to nearby hotels or libraries just to get Wi-Fi and do things like submit projects to university or apply for jobs. I’m fortunate in that my nearest telecoms exchange is a few hundred yards from my house, but many others are not so lucky.

Some say that people only want broadband for services like Facebook, YouTube or Netflix. Well, even so, with the demise of retail chains such as Xtra-Vision, Ireland now has precious few video rental stores. Do families with young children have to buy a copy of every DVD they wish to watch until they get connected? And what about kids who have to do homework projects? Do they have to use encyclopaedias in the local library while other classmates can do all of this at home?

A core reason for getting this right is businesses in rural locations – Irish firms are behind in the e-commerce revolution.

Broadband connectivity may not be a silver bullet for the problems of businesses – that’s up to them to solve individually – but the ability to establish businesses in rural locations from hospitality to manufacturing and trade digitally means more jobs remaining and people spending on goods in the local shops, restaurants or pubs.

In recent weeks, we reported on how UK digital marketing firm SLM is to bring 125 jobs to Gweedore in Donegal. If we judge this by the metric of the impact of multinationals, one job could eventually lead to three more in the local economy.

Not only this, but we also reported on how drone-maker DJI is going to be using the Donegal mountains to test the effectiveness of rescue drones.

Broadband may not be a panacea for the rural economy’s challenges, but it gives people a fighting chance to trade with the world.

A fibre network could be a jewel in the crown of Irish infrastructure

First of all, perspective. This is a postponement, not a cancellation of the plan. The tendering process for the National Broadband Plan began before Christmas 2015.

Up to 10 telecoms companies have expressed an interest, including Eir and SIRO, a joint venture between ESB and Vodafone. Other players include French company Axione, Gigabit Fibre and Enet.

The original plan had been to begin procurement by the middle of 2016 and bring broadband to 85pc of premises by 2018 and 100pc by 2020.

It is understood that a delay in receiving applications and the scale of work involved in reviewing them means the pre-procurement process will be drawn out longer and procurement won’t begin to 2017.

Having observed firsthand the ambition and commitment of key officials driving the National Broadband Plan, including the Department of Communications’ Catherine Licken, the reality is that Ireland has only one shot to get this right.

Their caution is understandable and should be appreciated if we want to avoid a litany of court battles and tribunals in the future.

At the heart of the issue will be the overall ownership of the National Broadband Plan network after 25 years.

Think about it – this will be a formidable and valuable asset that affects 96pc of the country and 40pc of its population. The contract may go to one or possibly two overall bidders and factoring in the overall ownership of the network after 25 years is no easy decision. Will it be an asset owned by the State and the people of Ireland in 25 years time or a private enterprise or enterprises?

Last week, on RTE Radio 1, Communications Minister Alex White endeavoured to calm concerns by pointing out that the delay was probably going to be just six months. If this is correct, this will mean that 85pc of businesses and homes in broadband-deprived areas will have high-speed broadband by early 2019 rather than mid-2018. “You can appreciate the remaining 15pc will take a little longer because they are more complex in remote areas and so on,” White said on the radio.

He was speaking on the radio after a meeting with concerned rural independent TDs. Among those TDs was Michael Fitzmaurice, who described the meeting with officials as open and frank.

Fitzmaurice grasped the fact that the devil will be in the detail of the final contracts that will be rewarded, with milestones to be met and stipulations to be honoured.

“I have worked on sewerage pipelines and similar projects and if you put enough bodies on the ground you can actually deliver ahead of schedule, there’s no doubt about that in my mind. I hope everyone is of the same opinion. It needs to be driven, for too long we’ve had different announcements and we need to make sure the pressure is kept up and an eye watching what is going on,” Fitzmaurice said.

While the National Broadband Plan has been deliberated upon, incumbent operator Eir has advanced its own plans for high-speed broadband as it realised it was getting faster and more efficient at rolling out fibre. By the end of this year, the operator aims to reach 1.7m homes with high-speed broadband and 1.9m not long after – or 80pc of premises in Ireland, according to CEO Richard Moat.

Included in Eir’s plan is efforts to address 300,000 homes out of the 750,000 with high-speed broadband and 100,000 of these will have 1Gbps fibre-to-the-home connectivity.

While on one level this may complicate the work of the planners at the Department of Communications in terms of acquiring EU state aid if a chunk of the intervention area is already being addressed, it may also be an unexpected benefit of the stimulus plan having being drawn up in the first place.

Another possibility is that Eir is likely to be seeking to become a public company again with an IPO in the next two years and Moat, a businessman to his core, knows just how valuable an asset a nationwide fibre network will be in that context.

If broadband is going to be central to the rural economy of Ireland, then let’s take heart from the fact that at least the wheels are in motion.

Unlike a decade ago, things are happening. And, ironically, it may be the case that a reverse digital divide may take hold where homes in rural area have faster speeds than their counterparts in towns and cities.

The wheels are turning. All we need is just a little patience.

Rural scene with rainbow image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years