Competing Is The Key To Rural Broadband

Press release
21st Oct 2007

One of the biggest problems that the Green Party minister faces in promoting broadband competition is Eircom’s continued dominance, writes Adrian Weckler.

Eamon Ryan does not have a Facebook profile. Not yet, anyway. ‘‘I keep getting invitations,” said the Green Party Minister for Communications, Energy and Natural Resources. ‘‘One of these days, I’ll probably join to see what’s going on.”

If Ryan does join the social networking site, it will be interesting to see who his ‘friends’ will be. When he was in opposition just a few months ago, Ryan was able to lambast the slow pace of broadband roll-out, Eircom and the Department of Communications.

Now he is the boss of that department. As with any ascension to power, compromises have had to be made and opinions revised. Where Ryan was once lauded in internet chatrooms for showing solidarity with broadband lobbying groups, he is now praised by industry bosses for a more measured approach to Ireland’s telecoms issues.

Speaking to a telecoms industry conference run by employers’ body Ibec last Tuesday, Ryan said that his department’s long-term goal was for rural broadband to be led by private sector competition.

But should the state subsidise broadband in far-flung locations indefinitely, even where it is clearly uneconomic?

‘‘Yes,” said Ryan. ‘‘We have to have ubiquitous broadband across the country. It has such importance that you cannot leave a section of the population behind by dint of where they’re living.

‘‘And I think that, just as we have a universal service obligation around postal and television, there are times where the state should intervene to correct what you might call market failure.”

How this is to be delivered remains an issue. Ryan’s vision for the future of broadband services is that urban Ireland – the 60 per cent of the population that lives in cities and very large towns – will have a large choice of broadband providers, divided between fixed line, cable and mobile solutions. The other 40 per cent will require ‘‘different technological responses’’.

In this vein, Ryan’s department is pressing ahead with a ‘national broadband scheme’ which involves a public tender to provide broadband to areas without it. Four companies, including Eircom, have been shortlisted.

But the country’s metropolitan area networks (MANs) scheme remains controversial. It is a grid of state-subsidised broadband fibre – laid down at a cost of more than €100 million to the taxpayer – to allow small operators to connect services to residents and businesses in large regional towns.

Ryan was very critical of the scheme earlier this year, calling it a ‘‘waste of money’’. He accepts it now, as he does the company which has a 15-year contract from the state to run the service, e|net. But he is still cautious as to its implementation.

‘‘I’ve no reason not to support e|net,” said Ryan. ‘‘It’s in our interest that those assets are used and supported. e|net is there. The MANs are there. You don’t turn your back on assets that you’ve built. But it’s not with an uncritical assessment that I’m proceeding.”

Ryan said that, although the majority of the scheme’s second phase of contracts had been signed, some of its wireless broadband implementations might not gain state approval, due to existing commercial wireless operators.

‘‘It’s right to review to see what you can do to improve the return on state money,” he said.

‘‘But you can’t expect to lay fibre and just expect instant short-term results.”

One of the biggest problems that Ryan faces in promoting broadband competition is Eircom’s continued dominance. Ten years after market deregulation, Eircom still retains almost 80 per cent of the residential phone market and almost three quarters of the home broadband market.

‘‘It’s true that Eircom still has the bulk of home fixed-line accounts for voice and broadband,” said Ryan.

‘‘But the cable, wireless and mobile operators are really starting to compete in that area now. It is a much more complex competitive market now. In the last year, broadband has almost doubled in numbers. The technological change is unprecedented.”

If Ryan’s competitive broadband market comes to pass, Eircom is likely to increase its call for a review of its universal service obligation status. At the moment, Ryan is unimpressed with the company’s case.

‘‘On principle, we do need a universal service obligation,” he said. ‘‘The question for Eircom is whether that’s a hindrance or a real asset. Eircom has the lion’s share of the DSL broadband market because they have that ubiquitous network.

‘‘So in many ways, it may not be a liability but more of an advantage to them.”

One issue that Ryan has not budged on is use of citizens’ private information. Under current data retention law, some state agencies can access e-mail, internet and texting content in very limited circumstances. Would Ryan envisage authorising any extension of the use of citizens’ data retained under the legislation?

‘‘I think we should do everything in our power to prevent any such use,” he said. ‘‘One of the consequences of people going online is that they will be using services in a sort of cloud.

‘‘If Big Brother is seen to be taking information out of that cloud, it could seriously hamper people’s trust in the whole system.

‘‘I would equally say that we have to make sure that commercial interests don’t get hold of information that goes beyond the proper dialogue between a company and its customers.”

Including his (putative) Facebook profile?

‘‘I’m not sure about that, now.”

Broadband boost for Shannon

Shannon could leapfrog other towns and regional centres to benefit from a new round of state-sponsored broadband investment, according to Eamon Ryan.

Under the second phase of the metropolitan area networks scheme (Mans), dozens of towns are to receive funding for high-quality broadband fibre. But Shannon, which is currently scheduled for phase three of the project, is being considered as an urgent case to jump the broadband queue.

‘‘There is clear government commitment and concern about Shannon as an economic centre, given the aviation events recently, so we may look at putting it up the agenda in terms of the Mans,” said Ryan.

‘‘It’s not in the phase two listing, but I do have flexibility in that sense. We may also look at some other larger towns in terms of prioritising roll-out.”

Adrian Wrecker, The Sunday Business Post