The pragmatist

25 Jun 2003

On a recent tour of EU accession countries, Dermot Ahern TD met representatives from a former Eastern Bloc state who must have felt they were in a time warp. The minister was explaining to them how his Government was funding the bulk of a €65m communications project. “They were somewhat surprised that the free market wasn’t working,” says Ahern, smiling at the notion of having to argue the case for state-owned initiatives with former communists.

Closer to home, finding such an incredulous reaction to one of the many twists and turns that has characterised the deregulation of the telecoms market would be hard. We’ve grown accustomed to bizarre games of cat and mouse, played out under the banner of free market competition.

It was no surprise when the Government took the decision to pick up the cheque for an ambitious scheme to build fibre optic rings around 19 regional towns. There was, after all, little choice when the telcos let it be known that they couldn’t make a business case for such a brave commitment to the regions.

For the Government and its much-hyped mission to turn the country into a European hub for e-commerce, it was a must-do project if its ambitions were to have any credibility. Of course, these decisions were made long before Ahern took the job as Minister for Communications, Marine and Natural Resources.

First elected in 1987, Ahern was busy being Minister for Social, Community and Family Affairs when the blueprint was drafted for Ireland’s emergence as a high-tech hub. This was at the start of the new millennium, a time of plenty when technology and the internet offered the teasing promise of a new economy where a country such as Ireland, with all its multinational IT connections, could flourish.

By the time Ahern was given the communications portfolio in June last year, it was looking more like a poisoned chalice. The tech sector had crashed, dotcom turned to dotbomb and the first wave of telcos that appeared in the aftermath of deregulation had either gone under or gone home. He was appointed at the same time that Mary Hanafin TD became Minister for the Information Society, their combined roles coming as close as we’re likely to get to somebody taking responsibility for nurturing the nation’s high-tech credentials.

“At the start of the Government there was some confusion in the media about my role and Mary Hanafin’s,” recalls the minister. “My role was in relation to policy generally and infrastructure. Mary Hanafin is there to co-ordinate the whole issue of e-government.”

Demarcation of responsibility is paramount with Minister Ahern and permeates almost everything he says. It has to be that way because his weighty portfolio includes marine and natural resources as well as the legislative nooks and crannies of communication. He’s just as likely to be in the news for protecting Ireland’s fishing rights or ensuring we can all watch the national football team on national TV as he is for tussles with telcos.

Is it, perhaps, too broad a brief, bearing in mind the importance of communications infrastructure to the national economy?

“I’ve broad shoulders,” he says. “When you look at the record since this Government took over, in this ministry there has been a fairly dramatic change in the pace of development.”

And no, he doesn’t see the case for appointing a senior minister as eMinister in charge of both his and Hanafin’s current duties. He argues that the combined roles have been working very effectively.

Few would deny that he has got things done. A pragmatist, it is rare to hear him wander into the more esoteric debates about technology and Ireland Inc. Phrases about the famous ‘e-commerce hub’ seem to have largely been expunged from government sound bites, replaced by a new back-to-basics realism. In public speeches, Ahern may occasionally allude to such concepts as the ‘knowledge economy’ and ‘the value chain’, but face to face the impression is of a man who is only interested in finishing one job before moving on to the next.

Currently on his agenda is the ongoing work around the 19-town project. Most of the metropolitan area networks (MANs) are now under way and the next stage is the appointment of a Managed Service Entity (MSE) to run the scheme on a national basis. It will be its job to sell the dark fibre and connectivity to the telcos and service providers who in turn will be expected to sell it on to local business and homes. It’s a national plan, but Ahern is keen to stress the importance of local ownership of the project

“Ultimately, the infrastructure will be owned by local authorities in conjunction with the MSE. When this fibre goes into the ground it will be up to the authorities and various players involved to manage it and sell it and make sure it’s lit up,” he says.

Some observers see this as a disaster waiting to happen. Local authorities have been the subject of much frustration for the likes of Meteor and O2, which have battled against bureaucratic planning rules as they tried to roll out networks.

“Critics said at the start that this wasn’t the way to go and that local authorities might not have the capability of responding to us,” acknowledges Ahern. “It has not been a problem. It probably helps that they’re dealing with a state organisation!”

The scheme is based on a similar model in Sweden and conforms to Ahern’s belief that decentralisation is an imperative.

“Personally, I’m against centralisation. I believe people at local level can make decisions to suit themselves. I have examples in a number of aspects of my own department. Can officials in Dublin deal with foreshore licences?” he says, referring to part of his marine responsibilities. “My view is that people sitting in Dublin cannot decide on a piece of foreshore in Galway or Kerry or wherever. Local people and local authorities know best.”

Where he sees a role for centralisation is in keeping service delivery consistent and ensuring good deals from bulk buying.

“You could say the MSE is centralising it, but that’s with a view to having equality across the country. It will also help to drive down costs. With the telcos market not being in great nick, prices are very keen and we have come well within budget,” he adds.

This is good news because the 19-town initiative is just the first phase in a €200m strategy, part of the National Development Plan that aims to build fibre rings around 48 towns. Ahern talks enthusiastically about the need to move on to the next phase, which he is adamant will go ahead, though the speed and extent will be dependent on how the first phase goes.

There is no denying that Ahern has grasped the nettle and set about realising a difficult plan that came with the job. Rumours were rife that at the end of last year he had to revisit the strategy that was put in place before he became minister, to plug some glaring gaps. He plays down the suggestion that mistakes were made at the planning stage, that there was a lack of consultation with the telcos on infrastructure that was already in place. He prefers to concentrate on what happens next.

A big part of this will be in creating demand. When the infrastructure is in place is it his job to make sure it gets used or is that up to somebody else?

“It’s a partnership. This is one of the things that the Taoiseach has been quite insistent on, that this department would sit down with industry for our mutual benefit — not just telcos, but ICT [information and communications technology] companies as well. They are more than willing to assist in the projects we are doing,” he says.

“Because of the downturn, the telcos are looking to the Government for help. We have a role to play, but we won’t solve all the problems of their market. We have a role but it’s not a lead role. We acknowledge that it’s not just about us putting the infrastructure in the ground. That’s our primary responsibility, but we have a role to play in boosting demand,” adds Ahern.

To help the process, a telecom strategy group, comprising most of the main players, has been set up and is about to deliver an interim report on a number of issues including public private initiatives to help stimulate demand.

For his part, Ahern has already flagged the idea of how private companies could support public initiatives. “I’m considering a levy on telco companies to finance the running costs of broadband into all of the schools in the country,” he says. “A few of them are unenthusiastic about it, but I personally believe there’s a very good quid pro quo for the companies. If the children of the nation are using broadband in school, they will want to go home and have the same facility.”

This line of thinking is typical of the inherent logic he applies to most challenges. Nowhere is this more evident than in his dogged pursuit of flat-rate internet access (FRIACO), which will be available for the first time in Ireland from 27 June. Back in February he issued a set of directions to the Commission for Communications Regulation (ComReg), urging it to adhere to government policy directions and ensure swift progress in the rollout of services from the ISPs (internet service providers).

“ComReg acted promptly,” the minister says, “and to be fair, so have the operators, including Eircom, which had a serious problem with it but told me it wasn’t going to fight the Government on it.”

The concept of unmetered access to the internet for a fixed monthly fee is available in numerous other countries and is widely believed to be a precursor to greater internet penetration. For Ahern it is unassailable logic and something he was pushing for from the day he got the job.

“In my view, people will use computers more in the home if they’re not being charged like a taxi meter,” he points out.

Eircom has argued that the drive should have been focussed towards always-on ADSL (asymmetric digital subscriber line) services rather than the older dial-up service, but Ahern is having none of it.

“With FRIACO the internet will become much more of a component of the household, which will lead to a demand for more speed, which ultimately will be to the telcos’ advantage. As sure as night follows day they will upgrade to DSL.”

Something of a techie himself with “myriad devices” in his possession, this was clearly a personal crusade: “I was very clear from day one that this should have been done a long time ago. As a personal user in my own home for years, the idea that the longer you’re online the more you pay — when most of the other European countries have a set fee no matter how much you use it — was wrong. We looked at the legislation to see if we could give policy direction and we decided we would.”

Spats with incumbent operators are, unsurprisingly, part of the job for any minister in a deregulated market. “I meet my counterparts in Europe and you get the exact same story in every country — the battle with the incumbent. Eircom is obviously going to fight to retain as much market share as it can. Equally, other companies want to take that share from them. That’s healthy enough,” he reckons.

What’s less healthy is the tendency for ComReg and Eircom to slug it out in the High Court. For its part, Eircom has repeatedly asked for a knowledgeable appeals board that can weigh up the two sides of regulatory disputes. These usually centre on the incumbent challenging the prices that ComReg tries to set for services, most recently over the wholesale cost of ADSL.

“Following EU directives, which we hope to have out by the 25 July deadline, we plan to set up an appeals process as quickly as we can,” says the minister. “I’m a strong believer that it’s absolutely ludicrous — not just in this sector — that people are running off to court. In some instances state organisations are suing each other at huge expense to the taxpayer. The quicker we can solve this the better.”

Things, it seems, are happening and the minister is confident that repeated surveys that find Ireland lagging behind the rest of the EU in terms of communications infrastructure — a stick that is regularly used to beat the Government — will soon be a thing of the past.

“There is this idea that we’re down the lower end of the scale in relation to broadband, but if you wait a couple of months, you’ll find that when you add up our DSL and wireless LAN [local area network] projects we’ll be ahead of a lot of countries. We get harangued on some statistics, but on other comparisons with EU countries we aren’t that bad at all,” he continues.

In terms of targets for national internet penetration — just under 40pc of the population currently have access — Ahern is reticent to pick a figure, but believes Ireland should be able to emulate countries that lead the way.

“We should be aiming for the likes of Korea and Sweden — 80pc penetration,” he says, reasoning that half the problem is getting the message out there. “As I say to my own people, until you see ADSL, for example, you won’t appreciate the benefit of it. We’re looking at the Korean model, with interactive games at home and huge internet usage. It’s a completely different scenario that opens up new aspects for the household. That’s what we should be aiming for.”

On the broader issues of e-government and inclusion, does he feel his department has a part to play?

“Every time I was asked, I passed legislation quickly. It’s very complicated because there are several data protection and legal issues,” he says. He is careful, however, to distance himself from an area of government that remains in something of a quagmire.

“The biggest component is the Reach project, the single identifier number and card for accessing public services. Millions of euro have been spent on that and work is still going on.”

Where is it getting bogged down?

“You better ask the other ministers,” he says, before turning back to his own responsibilities. “At the end of the day, my job is to ensure that people get a service for as little money as possible and anything I do will be guided by that principle.”

By Ian Campbell