OPINION
The Internet revolution that never was
06-09-2002
by Ralph Averbuch
With all the talk of wireless Internet, broadband and e-commerce you'd think that Ireland was at the forefront of the digital revolution.
True, there are quite a few Irish software companies staking their future on developments for international markets, but when you look inward to the domestic Internet market, it becomes woefully apparent that Ireland is in fact trailing in the wake of its European neighbours in one vital area.
Currently, best estimates of Internet penetration in Ireland come in at 38 percent of domestic households, with many saying it's actually lower. This compares with the UK at around 51 percent. Meanwhile actual time spent utilising the Internet is considerably lower in Ireland compared to the UK.
Why the disparity? Well it is almost certainly down to the failure of the regulatory bodies to curb the all-too-understandable urge of the incumbent telecom to keep the biggest possible chunk of the market at the highest price it can get away with. Of course it does not help that ill-informed political figures, who are all too ready to proclaim the importance of the digital economy, have totally failed to appreciate that, in order to achieve digital nirvana, the country needs ubiquitous, affordable Internet connections.
As David Long, of lobby group Ireland Offline explains, "Politicians recognise the importance of the connected society but underneath it all it's all vision and little specific understanding."
Sadly, Ireland appears to have hamstrung itself with three different government bodies partially representing consumer interest as it impacts Internet connectivity. We have the Director of Consumer Affairs, the Competition Authority and the ODTR, with the last insisting it lacks sufficient powers to force through change of the current telcoms environment.
Let's look at the UK for a moment. The fact that the two largest ISPs in the UK are not telecoms companies (AOL and Freeserve), and therefore do not have a vested interest in maximising call revenues, helps make the situation there so different. These companies lobby government loud and hard to drive down costs and to drive up subscriptions. This has forced the former state monopoly telco, reluctantly, to open up its network to competition, via pressure from the UK government regulator OFTEL.
Today anyone, anywhere in the UK, can pay as little as STG14.99 a month for an 'unlimited use' account. This means that no matter how many times they call or how long they stay connected their total Internet costs are fixed, including the cost of dialling up. Better still is the cheapest high-speed Internet offerings, which are available at about STG24.99, offering 24/7 connections at, what to anyone used to dialling up with a modem over here, would seem like rocket speed.
So why exactly is it so much more expensive over here? Well one argument might be that infrastructure costs are much lower in the UK, due to economies of scale that the UK enjoys with a population of 56 million individuals. Yet, in the UK they are spread out across the country, over much greater distances.
In the Republic, a third of the population live in the greater Dublin area, so a third of the country is catered for in one densely populated locale. You might think that should mean that infrastructure is cheaper to set up and maintain than in the UK.
Only now are we beginning to see the stirrings of some real competition which might begin to improve the situation. UTV has announced a flat rate package in the Republic, guaranteeing 150 hours a month off-peak for 29.99. And Esat BT has followed suit and will soon launch a 24/7 flat-rate package. This will give some encouragement to existing and new users, allowing them to make better use of the Internet.
As Scott Taunton, the MD of UTV's Internet operation admits, "we're disappointed that it's taken this long to have a sustainable flat rate product in the Republic but delighted we're the first to do it."
It's a shame we couldn't get the same high-speed product at the same price as our cousins north of the border though. In Northern Ireland UTV offers high speed 24/7 Net access to consumers for the very reasonable sum of STG25.70.
Strictly speaking Esat BT has already offered a flat fee dial-up service called Surf No-Limits, but was bleeding money keeping it going in the face of per-minute charges it then had to pay to Eircom. Nevertheless Esat BT and UTV's moves to offer evenings and weekend flat-rate products may finally begin to force a more competitive market for Internet access offerings.
Yet, in practice, it will only be when price concerns cease to be an issue for Irish consumers that the real power of the Internet will come into play. At this stage all the political rhetoric will begin to ring true and Ireland will finally be on the first real step to a truly digital economy.
In the meantime, if you simply must have an affordable high-speed Internet connection at something approaching a reasonable cost, look to the new wireless ISPs such as Leap Broadband and SkyNet. The only drawback is you'll need to live close to their base station and the antennae on your roof must have line-of-sight. If you're one of the lucky ones you'll wonder how you ever did without it!
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