Adviser urges Government to act on telecom regulations (The Irish Times)

MiCr0 · 03-08-2001 11:49am #1

The Government should intervene in telecoms regulation to stimulate the economy and promote the build-out of broadband infrastructure, a senior adviser to the Government has said. Jamie Smyth reports.

Mr Michio Narutu, chairman of computer group ICL and a member of an Irish Government advisory committee on telecoms, said there should be more intervention to promote technologies such as digital subscriber line (DSL). These enable higher amounts of data to be transferred at high speed across ordinary telephone lines.

He said the concept of providing subsidies to build out these technologies was contrary to the World Trade Organisation's principles. Rather, free competition should be combined with strong government intervention.

He cited Korea, where the State bought telephone exchanges from the monopoly telecoms firm through a compulsory purchase order to enable competing firms to access the local loop.

"Many companies got into the market and used dark fibre and there has been a rapid spread of DSL," he said. "Korean people like playing computer games through these networks and this has greatly contributed to people's computing skills.

"The problem about a monopoly is that it has enough power to control the market," says Mr Narutu. "Even if a third party starts another business a monopoly can always set up and get itself in a better position."

"Private companies have the right to chose choose when or where they invest and have to pursue profit for shareholders," said Mr Narutu. "We have to allow private companies to behave like that."

Mr Narutu's comments come just days after BT rejected an $8 billion bid by a private consortium for the local telecoms network in the UK.

Industry figures believe if an offer were accepted by BT it would stimulate investment in broadband technologies, as a new owner would promote use and hence competition through the network.

According to Mr Narutu, the Irish Government is now at an economic crossroads and faces similar decisions to those faced by the Japanese government and people in 1975.

"At that time all the Japanese people were equally rich and they decided to pursue quality of life," says Mr Narutu. "But that was the start of the decline and end of the prosperity and the bubble came and we lost huge money.

"Ireland has succeeded for 10 years in the software area and information technology," he says. "They are now at a turning point . . . "People here should be cautious and invest in a new model of economic growth. Now wages are increasing and the difference between rich and poor has narrowed. That is a very dangerous thing for a country."

Mr Narutu believes the Government should focus on boosting business, which does not require a huge boost in population figures.

"There are just 3.7 million people in Ireland but you have a big advantage, you do not need to stick to your territory," he says. "The future is in culture and language. You have 40 million Irish in the US, five million in Canada and Australia."

Investing abroad in a similar fashion to Singapore's Chinese investments should not be discouraged, according to Mr Narutu.

And the Republic's creaking infrastructure will not be the only problem that could upset the Government's plans to become a hub for e-commerce. The complexities of international regulation will also pose challenges, he believes.

"To promote e-commerce we have a big problem because e-commerce is a network society, entirely global, but all the legacy regulations and legal structures are not," says Mr Narutu.

"We cannot provide the data contents such as music and computer games through the network, and of course if we trade on e-commerce and it's good, then they levy the tariff."

As each country has its own tax systems, e-commerce would be undermined if indirect taxes such as VAT or consumption taxes were imposed. A proposed EU directive is not practical, says Mr Narutu.

"The EU recommends that vendors of data contents should find where customers are and register the tax office of the place or country of the consumer. It's impossible."

Other hurdles slowing the adoption of e-commerce are providing a safe harbour or indemnification to ISPs for material they publish on the Internet and security issues arising from the use of credit card numbers over electronic systems, he says.

from ireland.com

LegacyUser · 03-08-2001 6:46pm

Originally posted by MiCr0:
He cited Korea, where the State bought telephone exchanges from the monopoly telecoms firm through a compulsory purchase order to enable competing firms to access the local loop.

I like the idea, but would hate to be Mary O'Rourke, trying to explain how the Government was buying back bits of Eircom

Wonder how likely that Esat would take on the Sligo network without being forced to

"Private companies have the right to choose when or where they invest and have to pursue profit for shareholders," said Mr Narutu. "We have to allow private companies to behave like that."

Ha! "South Dublin only please, this is a free market".
But since we have no public companies left in this industry, isn't Eircom just "pursuing profits for shareholders"

(Yes, yes, monopoly obligations and all that; I agree)

"Now wages are increasing and the difference between rich and poor has narrowed. That is a very dangerous thing for a country."

Yeah, God help us if there wasn't a class war!

Anyway...

Of course, you could go with a compulsory sale of the exchange to the operator with the largest number of LL lines in it (LLU required of course). That way the customers essentially force a sale on both parties.
Could be interesting interconnections to
my rollout idea http://www.boards.ie/community/Forum18/HTML/000272.html

Still, I agree that regulation rather than subsidy is the way to go.
I just suspect from some of his other comments that the regulations should just ensure OLO profits, not necessarily widespread broadband deployment.

Wouldn't do for the digital divide between rich and poor to get too narrow, would it?

dahamsta · 03-08-2001 7:56pm

It should be pointed out that the (North) Korean government also took the initiative in another way, training up several thousand technicians to install and maintain DSL services, which resulted in North Korea becoming, and remaining, the most broadband intensive country in the *world*. But of course our own government will look over the shoulders of our next-door neighbours as usual and "learn" from them. It has to be said though, as I mentioned in a previous posting, that at least the UK government have made some progress under the regulatory control of David Edmonds (who regularly gets slagged off publically for his incompetence). For years, we seem to be have been stuck in neutral, but amazingly we seem to be slipping into reverse now...

adam

LegacyUser · 03-08-2001 8:06pm

well Korea had allot of us investment,
we could have had the same if our goverment was on the ball from the eu, but instead we invested in sheep and cows, hmm makes sense

Bard · 03-08-2001 9:06pm

Originally posted by Gladiator:
but instead we invested in sheep and cows, hmm makes sense

Considering how reliant the Irish economy is on agriculture, yes - it certainly does make sense.

dahamsta · 03-08-2001 10:34pm

To be fair Bard, we're not nearly as reliant on agriculture as we were, say, five or ten years ago. Our primary "source of income" - and I say that with more than a hint of sarcasm - is now more that ever the big multinationals that have set up home in Ireland. You know, like Gateway...

adam

LegacyUser · 03-08-2001 10:58pm

"Mr Michio Narutu, chairman of computer group ICL "

Maybe this guy should get an invite to the seminar!?

Maybe the Cmtee should look into it. HE seems to have made some useful suggestions- even if not wholly relevant to Ireland.

Possibility??

80p.

dahamsta · 03-08-2001 11:54pm

Good suggestion 80p.

<wish I'd thoughta that>

adam

LegacyUser · 03-08-2001 11:58pm

I know it does, but that's just goes to show how different we are, one country is dependant on state of the art technology while the other is this doing what they did 500 years ago,

O and there was no need to give the farmers as much as they have been getting but thats off topic

O btw getting your man to talk would be great, but i seriously doubt he would being a goverment advisor hes bound be certain rules

[This message has been edited by Gladiator (edited 03-08-2001).]

[This message has been edited by Gladiator (edited 04-08-2001).]

Bard · 05-08-2001 6:36pm

Originally posted by Gladiator:
I know it does, but that's just goes to show how different we are, one country is dependant on state of the art technology while the other is this doing what they did 500 years ago,

While relying utterly on any one industry is a ridiculously silly thing for any country to do, drawing an anology between the agricultural and IT industries is 'flawed' to say the least. Working in IT does not *literally* put food on the table, whereas agricultureal work (farming) does. Agriculture is a totally essential industry in Ireland and long may that last.

I don't know many countries that are "dependant on state of the art technology" (To be honest - the Internet, as a network, is hardly what I'd call "state of the art" anyway). The IT downturn is, as we all know, crippling the US economy right now and that naturally has a knock-on effect to the rest of the world, with Ireland feeling the pinch at this very moment.

BTW, There's nothing wrong with people "doing what they did 500 years ago" if it pays their way and keeps them productive, fed and happy. Just because we're in such a modern and technologically advanced era doesn't mean there's less of a place in the world for non-technological industries such as farming.

Bard

G'wan... giz a click

LegacyUser · 05-08-2001 7:20pm

your argument is flawed, but any argument on this subject would be pointless and off topic, and would only lead to a situation of further public hostility towards me, so I will end it now, if you wish to continue you can make another topic

Bard · 05-08-2001 7:37pm

Originally posted by Gladiator:
your argument is flawed, but any argument on this subject would be pointless and off topic, and would only lead to a situation of further public hostility towards me, so I will end it now,

My argument essentially boils down to the fact that an analogy between the agricultural industry and the IT industry is a bad and unhelpful analogy to make. I don't see how that is a flawed argument, or how my disagreement with you would promote "public hostility" toward you.

if you wish to continue you can make another topic

No thanks, but that's terribly kind of you to allow me

Bard

G'wan... giz a click

[This message has been edited by Bard (edited 05-08-2001).]

Adviser urges Government to act on telecom regulations (The Irish Times)

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