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

• 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

• 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

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