Industry split over schools broadband levy

9 Jun 2003

Esat BT has become the first telco to openly welcome a proposed government €30m levy on carriers to fund broadband in Irish schools.

Communications minister Dermot Ahern TD has said he intends to introduce the telecommunications service levy to fund broadband in all schools. Despite being one of the companies to be directly affected by the levy, Esat BT stated its strong support for it.

“We welcome the idea,” a spokeswoman for Ireland’s second carrier told “We see the whole broadband cause as not something that you can cherry pick. You can’t just decide to provide an excellent service to business customers and neglect other areas. It all starts at grassroots level. If you can get children online at a young age, the internet will become like mother’s milk to them. Of course it’s in our own interest too: they are our future customers.”

The spokeswoman added, however, that while Esat BT was supportive of the initiative, the company had seen no details yet and was unclear as to how it would work. “The devil will be in the detail and we’ve seen no detail yet,” she said. “For example, will the levy be a proportion of turnover? How will it be phased in? In principle it’s a great idea but we need more information.”

An Eircom spokeswoman said the company had received no notification from the department about the plan and, therefore, had no comment to make. However, Eircom is understood to be unhappy that, after spending €21m between 1998 and 2002 connecting 75pc Ireland’s schools to the internet as part of the Information Age programme, it may be asked to dig into its pockets once again to fund another schools programme.

Ironically, while Esat BT welcomed the proposal, other players which are not expected to be directly affected by the levy expressed their opposition. “The proposed levy will act as another form of taxation, another barrier,” complained Brendan Butler, director of ICT Ireland at IBEC. “Firstly, this levy will send a terrible signal internationally about the way telcos in Ireland are treated. Secondly, it will discourage new international and indigenous companies to set up. And thirdly, the ultimate outcome of this levy will be that the charges will be passed on to business and domestic users.

“The Government should sit down with the telcos and discuss this proposed levy,” he added. “Introducing such a levy without discussion with the industry sends out a dreadful signal internationally.”

Phil Smith, director of business development at equipment provider Cisco, also dismissed the idea. “It is yet another tax. Broadband in education should be a Government investment. With another tax, people in the industry will feel that the environment is becoming even more hostile.”

The Esat BT spokeswoman commended the minister for showing “imagination” with this and other proposals to increase broadband penetration in Ireland. Earlier this month at the Telecoms & Internet Federation annual ball in Dublin, Minister Ahern said his key mission of the year was to “kill the myth that Ireland can’t support broadband”. Urging telecoms companies to work with the Commission for Communications Regulation to ensure the speedy implementation of measures that would bring this about, he emphasised the Government’s determination to back broadband. “Government policy is that every house in Ireland will have the ability to get broadband or the means to it,” he said.

By Brian Skelly & Lisa Deeney