Lack of broadband and what it actually means

Now that the excitement of the VDSL rollout has subsided we must keep in mind those who do not currently have access to broadband and the economic damage this can cause. We in IrelandOffline have been contacted by numerous consumers and businesses across the country outlining to us their difficulties with broadband and explaining why the lack of broadband is causing them economic difficulties and costing Ireland many jobs.

Why broadband is so important for economic growth

The consensus view of organisations such as the World Bank and the Organisation for Economic Development (OECD) – two of the world’s most reputable economically-focused intergovernmental bodies – is that faster broadband and specifically fibre optic networks are a very good thing for any economy.

For instance, one recent World Bank study of 120 countries found that for “every 10-percentage-point increase in penetrations of broadband services, there is an increase in economic growth of 1.3 percentage points”.

Other research by McKinsey & Company similarly concluded a 10 per cent increase in broadband household penetration produces a rise of 0.1 to 1.4 per cent in GDP growth.

Booz & Company meanwhile suggested countries that have higher broadband penetration rates have achieved up to two per cent higher GDP growth than those with lower penetration rates.

According to one World Bank report titled Building broadband: Strategies and policies for the developing world, South Korea’s online gaming industry has benefited remarkably from investment in proper infrastructure, achieving sales of $US8.3 billion in 2007 for instance.

In Korea the value of homegrown content has exceeded $US3.4 billion, with online games and entertainment services the big contributors. Across the country’s economy there are other similar success stories to be told and it is commonly accepted the broadband investments have been key to South Korea’s status as a relatively high income nation after years of being in the economic doldrums.

Finland, a country with a much more widely dispersed population than Ireland’s and a much larger land area, also some of the terrain is much more inhospitable than ours as some of the country is above the Arctic Circle and is only bright for a few months of the year wrestled with these issues in 2009 and came to the inescapable conclusion that access to broadband was a legal right and enacted legislation on that subject, Finland also operate under the same EU directives as us. We NEED to think the same way and implement the same.

The main idea was a guaranteed minimum service level of 1Mbps for all homes and companies by 2010. That goal is then planned to be increased up to 100Mbps, served via a fixed connection or wireless(1), by 2015. This is to be achieved by driving fibre deep into all parts of the country.

Currently, 86 percent of the 5.35 million Finnish population lives within two kilometers of a 100Mbps connection with the expectation is that this will increase to 95 percent by 2015.

the government just wants to guarantee a minimum level of service and ensure that 100Mbps access is within two kilometers of all Finns no matter where they live. In Finland’s sparsely populated rural north and west, this is a particular challenge—not to mention that the ground is frozen solid for many months of the year in the remotest regions, meaning it’s difficult to lay new cable.Finland is meeting their ambitious goal by providing subsidies to local cooperatives that have sprung up to serve rural communities

Here is the story of one company that contacted us recently:

We are re an award winning food export business in Finea, Co. Westmeath(2) about 100 kms from Dublin city centre and 25 mins from Cavan town and Mullingar. Barely 1 hour and 30 minutes from Dublin.

Currently we employ between 70 to 120 persons in a village of 70 persons.

Currently All our customer administration is done online for customers in Ireland, UK and Europe. Lack of broadband means we are now doing more of this administrative work from the UK. These are jobs that could easily be based here in Ireland.

The only broadband option we have is satellite and we’re using the best of 4 or 5 providers that we tried.

Eircom exchange is not upgraded, 3G (modem) broadband only work’s 50 percent of the time if at all.

What we’re supposed to have via current Satellite system:(3)

12: 1 contention

10mb downstream

4Mb upstream

20Gb Monthly allowance.

In November 2012 we had 2 speed test carried out independently via 2 different methods which showed we are only achieving somewhere between 0.5mb/s for both upload and download … and 2.89mb/s Download / 1.1 mbs upload…  depending on the test. All I can tell you is that it is painfully slow even though we’ve blocked all non critical internet access to try to keep speed up.

We operate 350 days of the year … but the satellite broadband goes down fully for approx. 2 days every 2 months which means we have to send someone to another location  usually by car which costs the company dearly and wastes enormous amounts of time to download orders and upload dispatch data etc.

This is a big issue for us to continue to grow our business in Ireland and we are actively recruiting and  placing more of our administrative staff in the UK where Broadband is more widely available (and where I am now emailing you from).

(1) We understand wireless here to mean Fixed Wireless and not mobile as mobile is a shared medium which means that the more subscribers there are the slower the speeds that can be delivered, this can happen, for instance, if a number of mobile people suddenly enter the cell.

(2) Contact details available on request

(3) Satellite “broadband” is simply not suitable for running a business, it is a last resort solution for remote islands or the middle of the Atlantic and should never be used as a “solution” in a first world economy