Broadband is coming to a town near you
Author:
Ian McDonald
Broadband is cited by many as a key ingredient for effective business operations and a critical selling point for the economic development of rural regions trying to attract and retain businesses.
Many of the basic activities of everyday businesses are dependent on telecommunications. Apart from standard voice telephony services, these include e-mail, internet access, file sharing and inter-site communications. And, for the more advanced, services such as video-conferencing, application hosting, real-time database access, and high-speed inter-site connections are regarded as mission critical.
Those of us who live and work in Dublin have the benefit of being well supplied by a range of broadband service providers, using both wired and wireless technologies. This is largely because Dublin is a highly populated market that represents 'low hanging fruit' for these service providers. The customer density offered by business parks and city and suburban areas easily justifies investment in broadband networks and equipment. The same can be said for some other large cities, such as Cork, Limerick and Galway, although broadband service choice is less extensive. But many areas outside of Dublin are limited in their choice, and have to rely on DSL, where available, ISDN or dial-up.
The stark contrast that has emerged in network and service provider choice between Dublin and other towns and cities has become known as the 'digital divide'. The impact of the lack of broadband is best understood if you live or work somewhere like Donegal, or even in a town like Sallins, a growing Kildare town that is part of the Dublin commuter belt, but absent of even the most basic broadband services. Or if you live in some parts of in Dublin, such as Blanchardstown, for example, where DSL from the local exchange simply doesn't reach all parts due to its current technical limitations.
Digital Divide
A recent O2 survey (conducted by TNS MRBI) highlighted than 52% of businesses in Dublin have broadband, compared with 26% in the rest of Leinster, 29% in Munster and 20% in Connaught / Ulster.
But how has this digital divide emerged? Deregulation of the Irish telecoms market in 1998 led to significant expenditure by new operators in network infrastructure, principally in Dublin. Investment funds were plentiful and expectations were great. But the downturn in the market in 2001/2002 led to a retrenchment of investors, a tightening of purse strings, and a 'sweating' of the assets. In other words, capital projects were halted and telecoms companies turned their attention to getting a return out of existing assets. This meant that the prospects of towns outside of Dublin seeing the construction of new and advanced telecommunications networks diminished.
Most of Dublin is covered by a number of extensive fibre networks owned by service providers targeting both the business and residential markets. Fibre-based broadband services are superior in quality, but are expensive. DSL is a copper-based service that is delivered from an exchange using the same copper cable that delivers your voice telephony services. Currently, the typical DSL product delivers an upload speed of 128k and a download speed of 512k, about twenty times faster than a dial-up connection. It is, however, currently limited in its bandwidth and its reach. Hence, if you are five kilometres from the nearest exchange, or you require higher bandwidth services, it is unlikely to be your solution.
Your options
So what are your options? In Dublin, the emergence of wireless service providers has created competition for the incumbent DSL service providers, and presents alternatives for the pockets of Dublin not covered by DSL services. Wireless broadband service providers can establish their networks rapidly and cost-effectively, by constructing stand-alone radio transmission antenna sites in strategic locations across the city. They can also offer higher bandwidth than standard DSL. Most wireless services are also symmetrical. Symmetrical means that the upload and download speeds are the same. Standard DSL services are asymmetrical, offering an upload speed that is approximately 25% of the download speed. This is not ideal for home-based businesses and businesses that need to transfer large files to clients or other company sites. This deficiency is particularly obvious in the case of multimedia companies that need to electronically deliver content-rich files to clients. It is believed that the standard DSL offering will need to evolve into a symmetrical service with faster speeds.
There are also a number of fibre network service providers principally servicing the Dublin corporate sector only. Fibre offers a superior quality broadband service and is virtually limitless in the speeds that it can deliver. However, it is a costly service and can be too expensive for many businesses. The high cost of fibre-based broadband services reflects the high cost of the technology and the high cost of installing the fibre in the ground and to the user's premises. The cost of installing a fibre network in the ground can range from €50 to €150 per metre, depending on the surface being used.
In areas outside of Dublin, and outside the reach of DSL, satellite, ISDN and dial-up are your only other options. Satellite broadband services are particularly beneficial to businesses in remote and rural areas, for which DSL might never be available. The service is quick and easy to install, but it does suffer from occasional service quality issues. Dial-up is far too slow, and costly. ISDN is faster, although not fast enough for today's businesses. And because you need to use both ISDN channels to get the full speed benefit, you are making two dial-up calls simultaneously, thus doubling the cost. It is not unusual for some companies to spend in excess of €300 per month on dial-up or ISDN internet access.
This is clearly a situation that cannot be sustained, if Ireland is to have an equitable spread of business density across the country, and if we are to compete on a level playing field in the global market place.. Broadband is a fundamental business utility, the same as electricity and the postal service. Many rural areas can testify to an inability to attract big businesses, or retain growing businesses, due to the lack of broadband.
The Government in Northern Ireland is undertaking an ambitious nationwide broadband programme. It is the first known national Government in Europe to commission a service provider to develop a network, using both wired and wireless technologies, that will be capable of delivering broadband services to the entire population of Northern Ireland, by the end of this year. This will deliver affordable broadband services to any consumer or business needing it, regardless of their location.
The Government in the Republic, through the Department of Communications Marine and Natural Resources, has undertaken a number of programmes to address the imbalance in the Republic. These principally comprise the Regional Broadband Programme and the Group Broadband Scheme.
The Regional Broadband MAN Programme
The Government has committed to roll out carrier neutral broadband networks in all towns in Ireland with populations in excess of 1,500 people (see map). The carrier neutral aspect of these networks means that any operator, wishing to use these networks to deliver broadband services to rural customers, can do so. The objective is to provide affordable broadband internet access in towns that would otherwise not receive broadband within a reasonable timeframe. The Government, in partnership with local authorities, will fund the construction of fibre and wireless metropolitan area networks (MANs) that will be made available to alternative service providers at heavily reduced wholesale rates. Up to now, Dublin-based service providers had to rely on other operator networks for access to rural areas. But, by the time they incurred the wholesale charges and added their own margin, their price offerings often proved uncompetitive. But now they have, through these public MANs, a more affordable option. Already, many of them have announced plans to extend their service reach into the regions, using these MANs.
Over 20 of these MANs are nearing completion, under the first phase of the programme, and will soon be in full service. These are located as far north as Gaoth Dobhair in Donegal, and as far south as Cork City. The Government has commissioned a Limerick-based company, eNet, to administer, manage and maintain these networks on behalf of the local authorities, and to market the networks to service providers.
Another 35 MANs were approved for funding in December 2005, under the first call for proposals in Phase 2 of the Government's programme, and an additional 50 towns are the subject of the recently announced second call. With the Government funding up to 90% of the capital costs of constructing these networks, the programme represents an ideal opportunity for local authorities and regional development agencies to take an active role in directly addressing the broadband deficiencies in their areas.
All of these networks are expected to be in place by the end of 2006, thus heavily reducing the digital divide.
County and Group Broadband Scheme
For those towns with less than 1,500 people, the County and Group Broadband Scheme has been established to provide opportunities for smaller communities to avail of funding for broadband networks. A separate fund is available to promote investment in broadband access infrastructure in these rural regions, by contributing up to 55% of the infrastructure costs.. A team of regional co-coordinators has been established to match the communities, or groups of communities, with broadband service providers. Service providers do not typically undertake market research in rural areas where small populations would not indicate a strong market potential. However, the prospect of having the market presented to them, through individual proposals and aggregated proposals, is very attractive. This is further enhanced by the funding available to them for network construction.
Conclusion
The Government programmes, despite their best intentions, will not provide broadband to everyone across the island, but they are definitely a big step in the right direction. The benefits of these programmes are expected to be manifold. There will be socio-economic benefits for towns and cities outside of Dublin aiming to attract and retain businesses, in particular high-tech and high growth businesses. Users in those areas will benefit through the availability of broadband, a greater choice of service providers, lower prices and better quality. The wider communities will benefit through broadband being available in centres of public importance, such as schools and public libraries.
Accompanying illustrations have been omitted from the online version of this article.