New year starts on a slightly brighter broadband note

Net Results/Karlin Lillington: You wait years and then all the broadband buses seem to come at once. Unfortunately, some of them are stuck in Dublin traffic and don't seem to be getting anywhere but the situation is looking a whole lot better than it did this time last year.

We've had a jumble of announcements in the past two months.

December saw some significant initiatives out of the Department of Communications.

First, the Department negotiated a deal with EsatBT and the ESB (which has its own extensive fibre network around the country) to deliver broadband connections to the towns on their fibre networks for considerably less than has been the norm.

The Department is also beginning to put in place solid plans to manage the fibre rings it is building - the Metropolitan Area Networks (MANs), which will encircle 19 towns this year - and to bring broadband connectivity to smaller towns.

At first, it seemed the rings might sit in splendid isolation, without the wherewithal to get the broadband capability in the rings out to the homes, shops and businesses in their vicinity - the famous last mile problem.

Many also couldn't see who would come in to supply low-cost connectivity on the rings - who was going to throw the switch that would turn the fibre into networks rather than threads of glass?

Now, with the EsatBT/ESB deal and Government funding available to establish what it calls Community Broadband Exchanges around smaller communities - which will let small, rural communities pool their broadband needs and secure connectivity with some government funding aid - these issues are being tackled.

Certainly, if nothing else, the EsatBT/ESB deal will spur competition in the broadband supply market - a sorely missing element.

But will it all work?

There certainly have been plenty of critics of the MAN project and other Government initiatives such as the State-brokered Global Crossing transatlantic cable deal a few years ago.

The critics especially like pointing out that part of the connectivity was never taken up or paid for by some who signed up for Global Crossing connections.

They also have enjoyed emphasising that the cost for the connections is now higher than the going rate in the crashed telecoms market world.

But can we have a little reality check, folks?

This country would be in a dire broadband state, particularly in terms of its international competitiveness, if the Global Crossing deal had not been brokered.

Why? Because with that deal we got a direct connection to the internet backbone.

Without such a connection, the world's businesses increasingly would have bypassed the Republic as a business location.

The Global Crossing deal was a courageous one at the time and well-brokered by a tiny country. As a direct result of that deal, the Republic comes in at the very top of the international tables for low-cost international broadband connections.

Now, the problem is that domestic broadband costs for both homes and businesses have been atrociously high, and domestic availability of broadband has been pretty pathetic as well.

I'm not going to go through the reasons why we've ended up in such a sorry state - let's just say that everything seemed to be going right in our telecoms market in the late 1990s and then every possible thing that could go wrong did go wrong - leaving us with virtually no competition at all.

Hence, we didn't get that most basic entry point for home and business internet use, a flat-rate charging scheme, until this year, and only then when the Minister for Communications, Mr Ahern, forced it through.

So kudos to the Department for making a hard push on several of the most pressing broadband issues, giving an optimistic close to last year on the broadband front, for a change.

Other domestic moves that can be warmly welcomed is the thawing out of the wireless market. With some useful changes from ComReg in wireless licensing, new opportunities exist for companies such as Irish Broadband, which recently announced it would be hiring 60 people to handle expected demand for wireless connectivity, and LEAP Broadband.

Their opportunities mean greater competition in the broadband market and cheaper, more readily available access for consumers and businesses.

In addition, UTV, EstatBT and Eircom have been engaged in some low-level price and service wars over the past year.

Once Eircom lowered its wholesale broadband price - the charge it makes to other operators to use its lines to provide their own broadband offerings - the market began to loosen.

Eircom also announced it would bring broadband connections to every town in the State - well, eventually, and unfortunately, about four years after such a move was really needed.

Eircom has now announced plans to lower broadband charges from the current €54.45 to €39.99 (with VAT) - which at last brings us reasonably competitive pricing for the consumer. Too bad they announced the next day they'd also raise line rental charges by 8 per cent, thus absorbing back in some of the money they were saving us.

So Eircom giveth, occasionally, and Eircom taketh away, keeping as much in its pocket as possible.

Nothing new in the new year, then, on that front. But, at last, the new year promises some gradual improvements on our woeful domestic broadband situation. Although, sadly, it may well be too little, too late for our international business profile.

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