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2009
25
August

Examining the Broadband excuse machine

In this piece we examine the most common excuses trotted out as to why Ireland is not a world leader in the Broadband stakes. We are constantly reminded that Ireland is an e-knowledge economy, the e-hub of Europe. We examine these issues from the perspective of broadband.

Facts

Throughout the last last few years, we have had numerous reports  on the state of broadband in Ireland.
These have included an Oireachtas report, numerous Forfas reports, reports from An Taoiseach’s Office and many others.
However with all these reports available and recommendations made, nothing seems to get done.We have a lot of hand wringing  and excuses as to why nothing can be done.
Many people in Ireland know what is wrong, and how to fix it but still nothing gets done. So with that in mind IrelandOffline addresses some of the excuses.
If excuses are constantly being made this means that many people will believe there is “nothing wrong”, if this blinkered belief is true then obviously nothing will get done and all the previously outlined recommendations will be ignored.

Ireland was a late starter

Indeed Ireland was a late starter. The reasons for this were self evident, the previous owners of eircom had no interest whatsoever in investing in broadband and consequently deprived Ireland of a vital strategic gain, for short term profiteering and retaining dial up revenues.
However, being a late starter should have had some advantages. We should have able to see the mistakes made in other countries and not repeat them.
Instead we got another (different) set of excuses.

Amongst the reasons for this failure:

  • Lack of political leadership
  • Lack of Government investment and initiative
  • Lack of widespread availability
  • Lack of access to the wholesale transit market for ISPs
  • Lack Of National Networks, apart from the ESB ‘Figure of 8’  Fibre Network

  • Lack of willingness and ability to invest
  • Refusal to follow OECD conventions for broadband
  • Lack of competition in the provision of broadband
Regulation issues
  • Failure of LLU
  • Highest line rental in the EU
  • “Light touch” regulation

Growth Rates

The EU has called the Irish Telecommunications landscape a market failure. “Lack of effective competition in Ireland has hampered growth in broadband penetration”, according to European competition Commissioner Neelie Kroes in May 2007.

The OECD has stated that progress is very slow. Dimitri Ypsilanti of the OECD’s technology directorate stated on Dec 5th that their latest data showed Ireland at 22nd of 30 countries when it comes to broadband provision, compared with 23rd place the previous year.

These figures include mobile midband solutions so our position is actually even worse than outlined in these figures for broadband, we in Ireland constantly bundle mobile broadband figures into our overall broadband penetration rates. This is to make our penetration figures look “better”. Satellite connections are added to Fibre connections for the same reason.No other OECD country does this and doing so is disingenuous to all concerned and as a matter of principle this practice should end immediately. The performance of our incumbent telecommunications provider, until recently, has been dismal. Congratulating ourselves on a high growth rate, from a starting position of almost zero is disingenuous. If you have nothing then of course any takeup can be considered a “high growth” rate.

The myth of Platform Competition

The lack of platform competition is often used as another excuse. “There is no effective competition in rural areas”.
This is only half true. We are constantly reminded by answers in the Dáil that Ireland is a “fully deregulated market” and for this reason no government interference is allowed in the market.
Again, this is an excuse, competition in the market is an illusion,with the exception of a few players, mandated by Comreg and trotted out as an excuse at every opportunity.  Most broadband providers are simply resellers of the same (eircom)  product.
The outdated specifications and indeed the speeds are set by the infrastructure provider. So there is no effective competition or difference in the products being sold. Some companies have made valiant efforts to change this situation however they are constantly stymied and blocked at every turn. The ‘non-interference’ in the market myth is illustrated by the public investment in many areas in so-called Metropolitan Area Networks (MANs), which depend on the former monopoly supplier, eircom, for connection to wider networks.Until recently the Cable Industry was not in a position, nor minded, to compete in Urban areas but that has changed somewhat in the past 3 or 4 years and serious efforts are being made to fix the old Irish cable network and to roll out new services and new cable. However this is slow process owing to lack of serious investment.
Where cable broadband is widely available, such as in Dublin and Galway in 2006 , the PC and Broadband Penetration figures were notably ahead of the rest of the state … see appendix of data abstracted from Census 2002 and Census 2006.
The Department of Communications and Comreg both appear to have a policy of ignoring proper wireless services and concentrating on substandard 3G Midband as a “saviour”. That is not unrelated to the lobbying by mobile operators and perhaps related to levies made by Comreg on from mobile spectrum and levies on mobile operators.

Population Density

It is true that our population is often highly dispersed with ribbon development and defects in the planning system.
However many other countries have similar dispersion patterns and density issues. Scandinavian countries are a case in point, they have highly dispersed populations and their terrain and climate are far more hostile to civil works, yet they manage universal broadband.

The country referenced here is Finland:

  • By the end of 2010 every permanent residence must for reasonable price have access to a fixed or wireless subscriber connection with an average downstream rate of at least 1 Mbit/s.
  • The rate of 1 Mbit/s will be defined as a universal service (no public funding is used) The service provider may decide the technology it will use.
  • A wireless service of1 Mbit/s is already possible across the country and can thus be implemented at reasonable expense.

According to the Financial Times Spain and Poland have more dispersed populations than the “relatively densely populated” country of Ireland.

Northern Ireland, which shares the island with us, so therefore has exactly the same geographical issues and density patterns can manage 100% broadband penetration.

eircom itself published this diagram which clearly shows that the cumulative length of lines currently in Ireland.

Cumulative loop length distribution in various markets.

source : eircom Pierre Danon

PC Penetration

From CSO figures:

Houses with PC Broadband Connection
Other Connection
No access to internet
unknown
828,356 292,110 390,535 70,390 75,744

This is a good one, the excuse seems to be we have low PC penetration so therefore “there is no demand for broadband”. Somehow it is the fault of the consumer for the failure to roll out broadband. This is an idiotic argument. As is clear from the CSO figures, of the households with a PC some 70000+ do not have access to the internet.

This is an appalling situation. The Other Connection column is not specified but most likely midband 3G solutions. Others will probably be Wireless providers. Midband solutions are then, disingenuously, added to our broadband figures in a vain attempt to make us look “better”.
There has been no survey done to date on exactly how many household that are served by wireless providers.
It is clear from the figures attached that a huge driver in the ownership of PCs outside of those you have PCs for their business requirements, is the availability of broadband.

These figures also do not take into account gaming consoles like X-Box and Playstations, which are often used to access the Internet as well.

Speeds

There is only one word that can be used to describe  speeds in Ireland: pathetic.

Ireland currently ranks 33rd out of 35 OECD countries for average broadband speed


Source :EU Commission, July 2008

The current situation as outlined by the OECD:

OECD Broadband Data 2008

Ireland’s current broadband is along way off the vision laid out in the reports. Ireland offers an average of only 3Mbps and maximum speeds available to consumers currently stop at 20Mbps, this speed however is only available in areas covered by cable TV networks, the fastest speeds on DSL are currently 7Mbs. This speed is far below the norm in most other EU and OECD countries.

Failure of LLU

LLU is local loop unbundling. A mechanism to allow alternative operators to use the “bare” copper running to each subscriber. The line would be “rented” from eircom and plugged directly into the alternative operators equipment, rather than going through eircom’s network. It was envisioned that this would lead to innovative product offerings from alternative operators. LLU has worked in other jurisdictions and has lead to a vibrant and diverse broadband environment with quality offerings from alternative operators in those countries.This system has been mandated by the EU, however little or no progress has been made on LLU here in Ireland.

This system of renting lines was a very useful first step on the road to FTTx as fibre could easily be run to the exchange.

Highest line rental in the EU

This is one of the biggest barriers to the rollout of DSL broadband . In fact we believe the law of diminishing returns applies here.
The costs are simply too high so therefore people make a decision NOT to use a fixed line.
If a reduction in line costs, down to the EU average, was mandated then the pent-up demand for broadband could easily be addressed.
People would want phone lines and consequently broadband. This would mean a subsequent increase in revenues for all concerned, except of course for Comreg.
Comreg seem to have a vested interested in ensuring the cost of line rental remains high.

Light touch Regulation

As has been seen in other areas of regulation, the system of “gentlemanly” regulation has been a complete disaster for Ireland.
Regulators in general have utterly failed and telecommunications is no different than any of the other regulators.
Under “Irish style” regulation, all regulated industries now have the highest costs, no effective competition and most damning of all, have utterly ignored the consumer.
Regulators have attempted to manipulate the market by a “light touch” and by hoping to persuade those they are regulating to comply with EU regulations and other directions.
Regulators need to move into the 21st century and abandon old fashioned and outdated regulatory models of the 1980s.
As can be clearly seen from the General Policy Direction on Competition to ComReg pursuant to Section 13 of the
Communications (Regulation) Act, 2002 (No. 20 of 2002).”ComReg shall focus on the promotion of competition as a key objective.”
Appendix 1 . PC Internet and Broadband Penetration Census 2002 and Census 2006 ( Broadband in 2006 only)
PC AND Internet Penetration By Household Census 2002 and Census 2006 ( BB 2006 Only)
2002 Total HH PC Yes No Not Stated Internet Yes Internet No Not Stated 2006 Total HH PC Yes No Not Stated Internet Yes Internet NO Not Stated BB Tot HH 2006
Leinster 688604 323690 349419 15495 257045 414110 17449 Leinster 791277 470775 299899 20603 391361 354264 45652 196105 791277
Carlow 14790 5805 8754 231 4347 10157 286 Carlow 17074 9248 7424 402 7129 8802 1143 2213 17074
Dublin 378410 184744 182887 10779 149094 217564 11752 Dublin 419529 254506 152235 12788 216632 178946 23951 134923 419529
DublinCity 180661 70684 102932 7045 54241 118923 7497 DublinCity 190711 98878 84522 7311 80395 95393 14923 51172 190711
D’Laoghaire-Rathdown 64071 38947 24252 872 33344 29699 1028 D’Laoghaire-Rathdown 68375 48357 18651 1367 43361 23288 1726 27284 68375
Fingal 60460 35596 23516 1348 29640 29294 1526 Fingal 80085 55103 22809 2173 48002 29208 2875 27712 80085
Sth’Dublin 73218 39517 32187 1514 31869 39648 1701 Sth’Dublin 80358 52168 26253 1937 44874 31057 4427 28755 80358
Kildare 50076 26711 22553 812 21269 27881 926 Kildare 60578 39134 20167 1277 32650 24871 3057 14385 60578
Kilkenny 25407 10678 14401 328 8271 16744 392 Kilkenny 29478 16601 12273 604 13464 14283 1731 3919 29478
Laoighis 18337 7265 10844 228 5438 12627 272 Laoighis 22421 12008 9937 476 9246 11798 1377 2671 22421
Longford 10298 3540 6522 236 2725 7285 288 Longford 12042 5778 5923 341 4515 6610 917 1189 12042
Louth 33353 14208 18653 492 10907 21833 613 Louth 38598 21801 15917 880 17415 18749 2434 6821 38598
Meath 41335 20332 20349 654 16112 24406 817 Meath 53575 33801 18766 1008 28187 22665 2723 9889 53575
Offaly 19885 7440 12061 384 5349 14061 475 Offaly 23533 12143 10839 551 9163 12723 1647 2483 23533
Westmeath 23160 9531 13177 452 6964 15665 531 Westmeath 26881 14578 11652 651 11411 13802 1668 3678 26881
Wexford 37415 14542 22510 363 11125 25808 482 Wexford 45096 24203 20183 710 18906 23446 2744 4510 45096
Wicklow 36138 18894 16708 536 15444 20079 615 Wicklow 42472 26974 14583 915 22643 17569 2260 9424 42472
Munster 360814 146836 208030 5948 113703 240005 7106 Munster 406798 219611 178422 8765 180325 206641 19832 64269 406798
Clare 33635 15527 17633 475 12243 20796 596 Clare 38026 21700 15556 770 17744 18023 2259 5309 38026
Cork 147224 62901 81808 2515 49498 94834 2892 Cork 166542 92841 69868 3833 77436 79015 10091 29671 166542
CorkCity 42647 15413 26174 1060 11244 30210 1193 CorkCity 43871 21108 21232 1531 16717 23751 3403 9703 43871
CorkCounty 104577 47488 55634 1455 38254 64624 1699 CorkCounty 122671 71733 48636 2302 60719 55264 6688 19968 122671
Kerry 42860 15354 26874 632 12062 29961 837 Kerry 47743 24049 22688 1006 19757 25020 2966 5368 47743
Limerick 57043 22639 33521 883 16719 39224 1100 Limerick 63956 33748 28929 1279 27010 35097 1849 10227 63956
LimerickCity 18902 6192 12379 331 4338 14151 413 LimerickCity 19513 8812 10251 450 6770 12073 670 3768 19513
LimerickCounty 38141 16447 21142 552 12381 25073 687 LimerickCounty 44443 24936 18678 829 20240 23024 1179 6459 44443
TipperaryNth 20026 7451 12246 329 5654 13959 413 TipperaryNth 22866 11844 10574 448 9309 12954 603 2522 22866
TipperarySth 26258 9005 16731 522 6890 18775 593 TipperarySth 29221 14474 14227 520 11693 16756 772 3557 29221
Waterford 33768 13959 19217 592 10637 22456 675 Waterford 38444 20955 16580 909 17376 19776 1292 7615 38444
WaterfordCity 15287 6204 8703 380 4631 10237 419 WaterfordCity 17049 8716 7696 637 7329 8917 803 4655 17049
WaterfordCounty 18481 7755 10514 212 6006 12219 256 WaterfordCounty 21395 12239 8884 272 10047 10859 489 2960 21395
Connacht 151341 57923 90903 2515 44159 104169 3013 Connacht 173941 92220 78119 3602 75053 92522 6366 22988 173941
Galway 65716 27289 37091 1336 20800 43406 1510 Galway 78206 43474 32842 1890 35790 38952 3464 13364 78206
GalwayCity 21019 9381 11072 566 7159 13253 607 GalwayCity 25324 14477 10068 779 12224 12164 936 7990 25324
GalwayCounty 44697 17908 26019 770 13641 30153 903 GalwayCounty 52882 28997 22774 1111 23566 26788 2528 5374 52882
Leitrim 9000 3022 5848 130 2282 6549 169 Leitrim 10541 5167 5170 204 4069 6190 282 817 10541
Mayo 39114 13805 24806 503 10505 27937 672 Mayo 43218 21563 20840 815 17540 24113 1565 4371 43218
Roscommon 18003 6363 11428 212 4767 12976 260 Roscommon 20624 10522 9762 340 8265 11838 521 1926 20624
Sligo 19508 7444 11730 334 5805 13301 402 Sligo 21352 11494 9505 353 9389 11429 534 2510 21352
Ulster 78858 27996 49668 1194 20855 56459 1544 Ulster 90280 45750 42977 1553 35906 50480 3894 8748 90280
Cavan 18156 6066 11814 276 4466 13283 407 Cavan 21781 10796 10531 454 8506 11708 1567 1980 21781
Donegal 44119 15890 27587 642 11805 31521 793 Donegal 49993 25518 23721 754 20031 28859 1103 4878 49993
Monaghan 16583 6040 10267 276 4584 11655 344 Monaghan 18506 9436 8725 345 7369 9913 1224 1890 18506
State 1279617 556445 698020 25152 435762 814743 29112 State 1462296 828356 599417 34523 682645 703907 75744 292110 1462296
PC and Internet Penetration . Dublin and Galway led the state mid decade .
2002 Total HH HH PC Yes HH % with PC HH Internet Yes HH % with Internet
Leinster 688604 323690 47% 257045 37%
Munster 360814 146836 41% 113703 32%
Connacht 151341 57923 38% 44159 29%
Ulster 78858 27996 36% 20855 26%
State 1279617 556445 43% 435762 34%
2006 Total HH HH PC Yes HH % with PC HH Internet Yes HH % with Internet
Leinster 791277 470775 59% 391361 49%
Munster 406798 219611 54% 180325 44%
Connacht 173941 92220 53% 75053 43%
Ulster 90280 45750 51% 35906 40%
State 1462296 828356 57% 682645 47%
DublinGalway 2002 Total HH HH PC Yes HH % with PC HH Internet Yes HH % with Internet
Dublin 378410 184744 49% 149094 39%
Galway City 21019 9381 45% 7159 34%
Both Averaged 399429 194125 49% 156253 39%
State 1279617 556445 43% 435762 34%
DublinGalway 2006 Total HH HH PC Yes HH % with PC HH Internet Yes HH % with Internet
Dublin 419529 254506 61% 216632 52%
Galway City 25324 14477 57% 12224 48%
Both Averaged 444853 268983 60% 228856 51%
State 1462296 828356 57% 682645 47%
Cork/Limerick 2002 Total HH HH PC Yes HH % with PC HH Internet Yes HH % with Internet
Cork City 42647 15413 36% 11244 26%
Limerick City 18902 6192 33% 4338 23%
Both Averaged 61549 21605 35% 15582 25%
Cork/Limerick 2006 Total HH HH PC Yes HH % with PC HH Internet Yes HH % with Internet
Cork City 43871 21108 48% 16717 38%
Limerick City 19513 8812 45% 6770 35%
Both Averaged 63384 29920 47% 23487 37%
State-DubGal 2002 Total HH HH PC Yes HH % with PC HH Internet Yes HH % with Internet
The Rest 880188 362320 41% 279509 32%
State 1279617 556445 43% 435762 34%
State-DubGal 2006 Total HH HH PC Yes HH % with PC HH Internet Yes HH % with Internet
The Rest 1017443 559373 55% 453789 45%
State 1462296 828356 57% 682645 47%
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