Dermot Ahern on Morning Ireland Sept 17th

damien

4 days of coverage on Morning Ireland. Again I'd suggest sending comments to morningireland@rte.ie about this

PRESENTER – CATHAL MacCOILLE
Well for the past few days on the programme, we have been getting lots of emails and discussing the issue of Broadband access in Ireland, or to be more precise the lack of it and many complaints, people expressing their annoyance and frustration over their inability to get a Broadband line. We had one email in overnight from somebody on Dawson Street, in Dublin 2, the very centre of the capital who was unable to get connected to Broadband. Which seemed like an extraordinary situation, just to note, if you don’t have a computer or if you don’t use a computer or the internet or whatever, please bare with us, because there are many people, the experts I would suppose you would say, Minister Dermot Ahern, Minister for Communication, Marine and Natural Resources. The experts say that it is people with computers who actually are the future of our economy, would you agree with that?

MINISTER DERMOT AHERN – MINISTER FOR COMMUNICATIONS
Oh absolutely and in fact a lot of my colleagues, a lot of people in the Oireachtas know me as the Minister for Broadband, they are sick of me talking about Broadband, because I believe nearly more important than a road into an area, particular in a peripheral in this country, if you don’t have proper telecommunications there will be quite a clear digital divide. And this is one of the reasons, pushed me in the area of Broadband to basically intervene in the market and probably one of the ministers, in the EU who has intervened most in this market. I face stiff opposition from the EU commission and from other ministers in Europe. I took them all over to a conference here in Dundalk recently, where I showed and I think a lot of the smaller countries would also have this view, that there will be a digital divide. If you have areas in the country that can get Broadband, I know there are areas that cannot get Broadband…

CATHAL MacCOILLE
But Dawson Street?

DERMOT AHERN
I accept that and probably there are technical difficulties in that respect. But I would suggest to that person, that they should look at some of the alternatives. We set up a vote for Broadband website on my website, whereby people can go in and see exactly where they can get Broadband and from who they can get Broadband and also there is a trigger mechanism there, that if a certain number of people in effect vote for Broadband in a particular area anywhere in the country, we will then go to the service providers and ask them to provide Broadband in those areas.

CATHAL MacCOILLE
But you had to intervene in the market you say and why did you have to do that, because the normal government line would be the market will provide in all these places. There has been a failure has there not, at least that’s the indication we get from the people who have been contacting us. They believe that the market has failed them and the major market player in particular, Eircom has failed them, would you agree with that.

DERMOT AHERN
There is absolutely no doubt that the market will fail people in areas where it is not commercially viable for those companies to go into. That was…I was told that quite clearly by companies that they will not go into areas, where it is not commercially viable for them, because of that I thankfully got a sanction from the Department of Finance, I have to say a significant battle, not only from finance but also from outside finance, trade unions and private interests were against the government in effect investing in infrastructure in the telecommunication area. But we now have a situation where we literally have an alternative network up and running. You had George McGrath from E Net on yesterday, they will manage that significant level of investment has gone in to wrapping around high tension cables by ESB, where we now have two massive loops around the country, which will link all the MANs projects, these are the metropolitan area networks.

CATHAL MacCOILLE
Isn’t the problem though that it’s jam tomorrow isn’t that you are promising, you are saying well a lot of these things aren’t up and running, maybe you say Cork is up and running…

DERMOT AHERN
…No, no quite a number of them are already up and running and alloyed to that, that will give the service providers an opportunity to get into another network at a much keener rate, which ultimately will mean that there will be a huge level of competition. You have to remember when I became minister, to get Broadband was one hundred euros per month. And there were only three thousand on Broadband, today there are eighty thousand on Broadband and we are now at the EU average for price about thirty euros for the basic…

CATHAL MacCOILLE
…Well we are well below as you know the penetration rate and I know somebody in Paris for example who has had Broadband for five to six years at a rate of twenty two euro a year. He laughs when I tell him about access to email…

DERMOT AHERN
…I was in France over the last couple of years on holidays and you can’t get Broadband in peripheral areas and areas outside Paris and in deed even Paris I couldn’t get 3G. So there are difficulties in every country. We are about three percent penetration rate, the average is about five, we are increasing at…

CATHAL MacCOILLE
…One point seven six, was the last official rate…

DERMOT AHERN
…No, no three percent I had ComReg in yesterday, he told me the official rate is three percent, it’s now three percent…

CATHAL MacCOILLE
…one point seven six, we’ve all been told…

DERMOT AHERN
…And they also confirmed that it is increasing by four hundred and sixty percent. What is happening in Ireland is exactly what is happened in the rest of Europe in that we are….

CATHAL MacCOILLE
….Little later…

DERMOT AHERN
…Yes later, because, why because there was no investment going on because of the downturn in the sector.

CATHAL MacCOILLE
And the fact that the cable companies were in difficulties and they weren’t providing…

DERMOT AHERN
One of the biggest problems that we have in this country as opposed to any other country, particularly America and a lot of the successful companies in this regard is that, the cable companies and our country unfortunately at the time, were not in a position to invest in their infrastructure. But they are now, both of them have now agreed to invest in this infrastructure. I will give you an instance. We put a MANs metropolitan area network into the Longford area. There is a cable company there, that company over the years was in difficulty in relation to its services, because we put in that MANs, that company will now be able today provide Broadband to everybody in that area on demand.

CATHAL MacCOILLE
And it will be interesting to see what the take up is. We had another email from a gentleman in Tullamore this morning and I suppose it’s the tenor of a lot of emails we had, it’s Dr. Eddie Murphy who is a clinical psychologist. He says that Broadband is crucial for him, but in fact a telephone line would be quite good, because he lives in a new estate Carrigclunan and there is another estate there Ballyrean. He has had terrible problems as have had other people in that area. Tullamore a boom town, doing very well, going to be very important in that region in the future and they have had problems getting basic, basic infrastructure.

DERMOT AHERN
Well I would like to think that some of the service providers would take on board what you are saying in relation to that particular detail, nobody has contacted my department in that respect. In relation to Tullamore…

CATHAL MacCOILLE
…But do you worry about it…

DERMOT AHERN
…Of course I do, in relation to Tullamore there is a MANs project in there at the moment and people like him will be able to get services, particularly Broadband services, because the service providers will now be able to piggyback onto that infrastructure. What we have done is over the last two years, we have put in sixty five million euro, in putting in these metropolitan area networks for superior infrastructure to the existing one, fibre which will provide huge activity to those areas. I got consent to fund extra and we are not doing another ninety towns and there is also a group Broadband Scheme, which is a scheme designed for the peripheral areas, there is twenty five million euro available to communities, to small communities to get Broadband in their areas.

CATHAL MacCOILLE
Okay Minister Ahern, Minister for Communication, Marine and Natural Resources, thanks for coming in this morning.

cgarvey

You know the drill .. rips

.cg

damien

Thanks cgarvey, you're a star.

eircomtribunal

I am absolutely sick of this sorry and stupid excuse by Dermot.

DERMOT AHERN
One of the biggest problems that we have in this country as opposed to any other country, particularly America and a lot of the successful countries in this regard is that, the cable companies and our country unfortunately at the time, were not in a position to invest in their infrastructure.

Denmark, the EU leader in Broadband, had no competition from cable. The reason why we are so behind was and is the lack of brain in our minister and the lack of spine in our regulator.

Quote from“Broadband Internet Access in OECD Countries:
A Comparative Analysis”:
"In two other countries, new entrants took advantage of unbundling and line sharing rules to use the incumbent telco’s lines to provide broadband. This is the case in Japan and Denmark. New entrants had a 44% market share in Denmark in 2001 (which since declined to 21% in 2002) and 60% market share in Japan. In both countries, competition from cable is weak. In Denmark, cable is less of a competitor than it might have been because it is owned by the incumbent carrier. In Japan, cable is hampered by the fact that it passes only one-third of all homes. Where competition from cable is weak, unbundling requirements may play an important role in promoting broadband access."




Example Denmark: "The new entrants' market share of 44% due to unbundling has since declined to 21%." Why? Because the incumbent was forced and able to fight back with low dsl prices. What a recipe for Ireland!
But there is no hope if Dermot not even recognises what a load of rubbish he is talking, when he uses again and again the lack of cable as his excuse.
And Doherty's Comreg is a complete loss. They just proposed the second highest unbundling price in Europe.

P.

eircomtribunal

Dermot Ahern
"You have to remember when I became minister, to get Broadband was one hundred euros per month...we are now at the EU average for price about thirty euros for the basic [service]"

Sadly this is not true and I am amazed the Minister would make such a statement: The Communications regulator in his recent 3rd Quarterly Report just showed that Irish broadband pricing has slipped against the EU average. It is now noticeable above the EU price level. As we have to play catch-up with broadband usage, our pricing needs to be considerably below the EU average, certainly not above it.

And the Comreg bb pricing comparison does not even take account of the fact that the Irish broadband subscriber pays an additional €10 more for line rental than the EU average subscriber.

P.

eircomtribunal

Dermot Ahern
" We are [at] about three percent penetration rate, the average is about five"

Sounds good, but those figures don't add up.

If Dermot is referring to the Broadband penetration rate as defined by the OECD as broadband subscribers per 100 inhabitants (which the EU somewhat incorrectly translates into a percentage figure of the same size
added for clarity and ripwave), than we would need to have 3/100 of 4 000 000, namely 120 000 broadband subscribers. Dermot speaks of 80 000 in the same interview, which would translate into two percent and not three.
The EU-15 average in January 2004 was at 6 subscribers per 100 inhabitants, and is currently probably at 7 or 8 certainly not five, as Dermot claims.

If Dermot is referring to the Broadband penetration per households with his 3% figure, which could be about right, as of the 80*000 current bb subscriptions most are taken up by businesses, then he should compare this with the average EU-15 household penetration rate of around 20 percent.

Ireland with its young, educated and English-speaking population, is still at the bottom of the EU-15 league. Whatever way Dermot Ahern tries to spin our dismal performance, only action will change the situation.

P.

P.S.: Dermot Ahern has made it clear in previous statements that we should compare ourselves with the EU-15 and not the lowered standard of the new entrants.