INTERNET
Forfas delivers damning broadband report
29-05-2003
by
In a somewhat damning report, Forfas has said that Ireland is about two years behind competitors in terms of broadband rollout and takeup.
The report, delivered to the government last month, said in no uncertain terms that Ireland is as much as 30 months behind its main competitor states for DSL takeup. According to Forfas, the reasons for this are diverse but include limited availability and high prices. More importantly, however, even when broadband is introduced in most places in Ireland, or indeed in any economy, it can take about 18 months before there is a mass-market takeup.
"Since many competitor countries have reached this high growth phase, the gap between Ireland and other competitor countries is continuing to widen," Forfas said.
According to data in the organisation's report, the top country for DSL takeup is South Korea, where the service is available to 90 percent of the population, with about 14 percent using it. The next four highest-ranking countries on the list for DSL takeup are Denmark, Canada, Belgium and Sweden, all of which have more than 4.8 percent penetration.
In fact, the research shows that DSL penetration topped 80 percent in eight of the 19 countries surveyed, and penetration topped 50 percent in 17 countries, with only Ireland and Greece below that level.
Interestingly, DSL takeup by businesses was higher than 30 percent in eight countries in the report, going as high as 94 percent in Denmark. Sixteen of 19 countries had business DSL takeup higher than 10 percent, with only France, Ireland and Greece failing to reach that mark.
Pricing is where the Republic seems to really fall down, however. This conclusion was drawn when Forfas examined the cost of various broadband speeds for businesses of all sizes. For small businesses in particular, the findings were especially bad.
Irish DSL prices for small businesses are about five to six times higher than in the two lowest-price markets, leaving small firms here at a substantial disadvantage. "This is cause for serious concern since such high prices can serve to constrain DSL penetration. It is unlikely that Ireland will reach mass market penetration levels in the near future," Forfas wrote.
There are three main, intertwining reasons why broadband has experienced such slow growth in Ireland, and why the cost is so high, the research said. First, any company that wants to offer DSL must have access to Eircom's exchanges, and the cost and terms of gaining this access is high. Second, with no strong competition from other technologies, such as cable or nationwide fixed-wireless services, DSL is the only viable option. Third, although there is plenty of fibre in the ground and more on the way -- including the 19 optical fibre rings that the government is building -- there are no "last-mile" lines connecting these rings to homes and business.
In effect, the report says that since Eircom owns the so-called last mile, or the copper wires that lead into homes and businesses, it has a near-monopoly on broadband, with cost and availability dependent on it.
The report offers a number of recommendations to help overcome these problems, including a recommendation that the Department of Communications and ComReg "maintain pressure on Eircom and Esat BT to roll out DSL services at competitive prices." It also says that measures should be introduced to ensure access, at market prices, to Eircom's dark fibre capacity.
Meanwhile, other propositions from Forfas appear to be creative ways to get around Eircom's local loop monopoly. The report says that the government ought to look for ways to encourage cable broadband and, importantly, it says the Department of Communications should examine the provision of external collocation space, using public buildings or other facilities near to key Eircom exchanges to facilitate local loop unbundling.
Finally, the report says that an awareness campaign should be launched to promote the benefits of broadband, and other ways to stimulate interest should be examined.
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