The Government's 2002 election pledge to boost broadband take-up in the State to be within the top 10 OECD countries is "wildly optimistic", a major study on internet use has found.
The international study, which was prepared by the European consultancy company DotEcon, also blamed a lack of clarity in Government policy for the slow roll-out of high-speed internet services in the Republic.
The clear policy of divestment pursued in the lead-up to liberalisation of the telecoms market has been replaced by a new policy that will see the State re-entering the market. In the lead-up to full liberalisation, the Government obliged Eircom to dispose of its cable network and ultimately privatised Eircom.
The State's current policy to invest directly in developing a new Government-controlled telecoms network is likely to have created uncertainty among firms and had some impact on investment decisions, says the report.
It has caused private firms to question their own investments in networks, according to the consultants. The new State network is part of a €60 million investment in metropolitan rings around regional towns in the Republic. A private firm is likely to be chosen shortly to manage this network.
On a more positive note, the report highlights that the Republic will probably be one of the fastest growing broadband markets over the next five years.
But it says this is only because the market is starting from such a low base and it predicts that broadband penetration will rise to just 9 per cent by 2007, compared to a western European average of 16 per cent. This is also dependent on strong growth in cable broadband, which may not happen, it says.
The report notes that a policy document published by the Government in the lead-up to the 2002 election pledged that Ireland would be among the top 10 of OECD states for broadband within three years. It also notes that the Government said the Republic would become the first state in Europe to give its citizens access to broadband at speeds of up to five megabytes per second.
This objective is "wildly optimistic", concludes the report.
Many of the factors for the slow take-up of broadband still exist such as lack of platform competition and a regulatory environment that will not encourage it to emerge, says the report, which criticises the Commission for Communications Regulations (ComReg) focus on encouraging wholesale access on favourable terms rather than infrastructure competition.
A spokesman for the Minister for Communications, Mr Dermot Ahern, admitted that Ireland currently lagged well behind but rejected some of the key findings of the report and said the problems were now being tackled.
The Europe-wide study, which included country and company case studies, concluded that facilities-based competition was preferable to access competition.
The report was produced in association with Criterion Economics and was commissioned by the Brussels Round Table, a forum of mostly incumbent telecoms firms. Members include BT, Deutsche Telekom, Ericsson, France Telecom, and Siemens. Eircom is not a member.
