Forging a blueprint for high-tech future

On Wednesday, the Government received a blueprint for its economic future. After five months of meetings and hearings, the Telecoms Advisory Committee, created by Minister for Public Enterprise Ms O'Rourke, filed its much anticipated 24-page report. What the Government does with that blueprint will determine the State's future. Yet on the face of it, the report seems innocuous, even dull. As a spokesman for the Department is more than willing to admit, this is not a sexy document, and these are not sexy topics.

Understandably, broadband infrastructure and e-commerce policy initiatives cause few sweaty palms and heart palpitations. And yet, the vision of what could be on offer if the report's recommendations are correct, and if the Government and the State decide to implement them - is very sexy indeed.

In an increasingly wired world, the Republic would be one of the few countries keeping pace with technological advances. With technology becoming central to the workplace and the home concerns over privacy and data control will increase. The State would also be among the few countries shaping global policy in these areas, rather than being dictated to.

All of this is not wishful thinking. As the report points out, the State already has what it calls "developed strengths" in software, electronics, financial services and pharmaceuticals.

In particular, its leading position as a software exporter and call centre base "are compelling indicators of what can be achieved through effective national strategic positioning", notes the report, which, interestingly, also calls Ireland "Europe's premier knowledge economy".

So, we have done well in the first phase of creating a digital economy - the kind of economy ideally suited to a small but energetic state where essential decisions can be taken and implemented swiftly. But past success, in the fast-changing world of technology, is no guarantee of future success. As the report warns: "Ireland has a unique but fading opportunity to leapfrog its European trading partners and progress to the next wave of telecommunications policy and regulations".

It emphasises the need to move quickly to establish an e-commerce-positive environment to lure the first wave of companies, which will create a path for others to follow. An entrepreneurial culture needs to be established and reinforced.

Finally, education, seen as one of the State's greatest strengths by companies wishing to locate here, must be a top priority, including at the primary and secondary levels.

While recognising Telecom Eireann's initial achievements in creating a telecommunications network which helped spur economic growth, the report is blunt in its evaluation of the telecommunications picture now: "If the current shortcomings and inefficiencies in the supply of telecommunications and Internet services at a local, national and international level continue to exist, Ireland will be at a serious disadvantage."

The report makes 10 recommendations intended to address four key areas to make the State an e-commerce hub: the acceleration of telecommunications competition, the promotion of Internet access and connectivity, the facilitation of e-commerce and the development of human resources.

The first recommendation is straightforward - that the initial public offering of shares in Telecom and the sale of Cablelink be made priority items. The committee feels this will ensure, as quickly as possible, a "competitive market-driven telecommunications sector which will act as a driver of long term economic growth".

The second recommendation is more complex. First, it advocates "unbundling" (or opening to market competition) the "local loop" or what is sometimes referred to as the "last mile" of infrastructure - those phone lines which connect individual businesses and homes with the telecommunications network.

If existing deregulation guidelines do not allow this, the report recommends legislation be passed to force it to happen by next June.

Unbundling could have two effects. On the downside, it might discourage telecommunications companies from putting in more, and better, lines, because they could piggyback onto existing telephone lines. But the committee believes unbundling will instead drive down prices and increase options for connecting to the Internet for consumers.

Connected to this is the suggestion that the Director of Telecommunications Regulation should accelerate plans for awarding radio spectrum licences for wireless Internet access and for the next generation of mobile phones.

The third recommendation concerns regulation of the telecommunications industry. First, the report says that the Director of Telecommunications Regulation should be given specific powers to promote competition among telecommunications companies and to impose sanctions on companies violating industry regulations. This would promote competition, efficient operation, and thus, the quality and range of services for consumers and businesses.

Secondly, the report recommends that Government departments should encourage convergence between the broadcasting and telecommunications industries, and the Director of Teleommunications Regulation should be in charge of regulating "all information networks including broadcast networks", with a separate agency handling the regulation of content.

With the advent of digital television in particular, industries will begin to overlap; this recommendation is designed to clarify who will oversee and regulate that merging, and removes the possibility that one industry will try to control aspects of the other. But content, in particular who creates, edits and broadcasts it, is likely to become a hot issue.

The next three recommendations deal with Internet access issues. The most important recommendation in the report, and one which would push the State far beyond what its European partners have been willing to consider, is a move towards so-called flat-rate Internet access rates, where Internet users would pay a flat telephone charge for unlimited Internet access.

The committee underlines this recommendation in particular, noting it "strongly recommends" a move to charges "approximating US charges", which average $20 (£13.40) monthly. In another part of the report, it is adamant on the point: "Pan-European Internet access costs are about five times higher than equivalent costs in the USA. The model of charging for Internet use in Ireland which is in accordance with European rather than the more progressive US approach is unlikely to support the rapid development of electronic commerce." Eireann has opposed this move; meanwhile but the Government says optimistically that it expects flat-rate access by the end of the year. We shall see. Within hours of the report's publication, Telecom Eireann announced reductions from January in peak-time Internet access and proposals for pre-paid access packages.

Recommendations five and six state that the Government should establish a way of guaranteeing that all regions are equally served by broadband infrastructure so that rural areas are not locked out of a digital economy. They emphasise an "urgent need" to make sure the State has fibre-optic broadband Internet connections to "major international business centres". Such connections should not cost more than from "competing locations" - meaning, most significantly, the US. To this end, the report says the Government should establish a "public-private partnership" to encourage investment but with State input, a recommendation the Government has already begun to act upon.

This is another crucial recommendation. Costs for lines to international Internet centres from Europe are much higher than similar lines in the US and critics have long complained that this factor is a significant deterrent to the growth of e-commerce.

Recommendation seven, on e-commerce, has four provisions. The first suggests examining the feasibility of creating an accreditation system for e-commerce companies working from a base in the State, which would guarantee they complied with standards for handling data, protecting privacy, backing certain consumer rights, and collecting and paying taxes. The State could establish a brand mark - the report suggests an "electronic shamrock" - to signal a member company.

The second suggestion is the establishment of an Electronic Policy Initiative, which would include private sector input and have Government support. The initiative would explore options for accreditation, study legislation and regulation frameworks for all aspects of e-commerce and get the legal and business framework up to par with international practice, and identify which areas of electronic commerce were most suitable, and how to exploit them. This work "should be completed no later than April, 1999".

In addition, the committee recommends establishing "benchmarking guides" to promote adoption of e-commerce.

Finally, the recommendation concludes that the Government should be an e-commerce leader, making it possible to conduct every interaction with citizens and business electronically.

These four suggestions are ambitious - especially the time-frame for the Electronic Policy Initiative - but extremely important if the State is to seize the opportunity before it.

The Department of Public Enterprise says it is committed to the initiative's deadline. If it manages to bring this into being, a major step towards its e-commerce hub goal will have been made.

The eighth recommendation is another interesting one - it advocates the creation of an "entrepreneurial culture" not only teaching students entrepreneurial skills in school and university, but presumably altering any legal impediments which retard the creation and flow of that key ingredient in Silicon Valley's success, venture capital (the Government has said it is willing to pursue this step as needed).

As well, the report envisages the establishment of a "business angel" network - angels take a more active role than venture capitalists, and nurture a company by providing guidance and expertise as well as financial support. In particular, the report suggests building on the existing Irish-American business links to establish an "Ireland-America business angel network".

The final two recommendations are essential - the State must stay on top of the growing skills and employee shortage in the technology sector, and also expand its commitment to computer literacy in schools, particularly for young students.

While the report is not lengthy and the recommendations are brief, it should not be mistaken for a slight offering. Firstly, these are the opinions of some of the leading minds in the telecommunications industry from home and abroad.

It gives a sometimes startling and neutral outsider's view of our strengths and weaknesses. In its direct approach and clear sense of priorities, not to mention frequent slaps in the face to any inclination towards complacency, the report accomplishes its goal - to delineate moves that must be made quickly, to put in place this new model economy.

Some points will seem obvious, particularly if you are a dedicated follower of e-fashion, but do not underestimate for many people (including legislators) the difficulty in understanding these often complex technology issues.

The report sets these out with a firm indication of its own opinions, for Government and the public to examine. It is essential reading for anyone trying to understand the importance of the Internet and an electronic commerce-based future. If you have a business, avoid it at your peril.

The report is available online at http:// act.iol.ie, and comments are solicited from the public.