At last the west awakes to broadband

Despite criticisms, the roll-out of the National Broadband Scheme is providing vital business links in remote areas, writes SUZANNE LYNCH

FOR SEÁN O’Flannagáin broadband access is more than simply a luxury. The former investment banker left Merrill Lynch earlier this year to set up a small investment management firm, Kinsale Capital Management. Based between Dublin and Inisheer, the smallest of the Aran Islands off the west coast, O’Flannagáin depends on high-speed internet access to successfully run his business.

“When we decided to set up the business, we knew that dependable, high-speed broadband was imperative,” he says. “It wasn’t just a matter of having access to e-mail and the internet, we’re increasingly using cloud computing so we need to access data remotely.” Much of the firm’s work involves the use of web-enabled applications. Because it works with global banks, it needs to have secure and speedy access to finance programs.

The arrival of wireless broadband to the remote islands in November last year allowed O’Flannagáin to base his business in Inisheer.

He eventually hopes to work full-time from the area.

Kinsale Capital Management is exactly the kind of business activity the Government is hoping to encourage through the National Broadband Scheme (NBS). Following years of under-investment in telecommunications infrastructure, the Government announced a search for a provider for the scheme in 2007, with the aim of addressing the “digital divide” between urban and rural areas.

Mobile operator 3 Ireland won the contract to implement and operate the scheme, which required it to deliver the service to areas of the country not covered by other commercial operators. Under the terms of the contract, 3 is required to provide wholesale access to any other authorised operator that wants to serve premises in the NBS area.

The investment has been costed at €223 million, with the Government providing almost €80 million. Customers are charged €19.99 per month for a 15GB data allowance plus a once-off connection fee of €49.

Under the terms of the contract, the roll-out is to be completed by the end of September – but is it on schedule?

3’s Damien Gallagher says he has high hopes that 100 per cent broadband will be delivered by deadline. “Approximately 60 per cent of the target areas are now covered. At this point we are confident that all areas will be covered on schedule,” he says.

Some of the areas that have already been covered include the Aran Islands, which was connected in November; Fanad and Malin in Donegal, connected in October 2009; Rathmore and Knocknagoshel in Kerry, which received broadband under the NBS in June last year; and most recently, Lettermore and Roundstone in Galway, which were connected earlier this month.

But while the NBS looks set to be on target, the scheme has attracted criticism. Under the terms of the scheme, 3 will provide a minimum download speed of 1.2Mbps up to 5Mbps, and an upload speed of 200Kbps to 1.8Mbps. The operator has also committed to implementing two upgrades within the next two years. To many, the speeds are insufficient.

Ireland Offline has argued that the 3G technology offered by the scheme is not considered “broadband” by most EU and OECD regulators. The group argues that due to its low speeds and high latency the technology associated with it will be unsuitable for many common broadband uses.

The Alternative Operators in the Communications Market group has also called for greater emphasis on the central role played by Metropolitan Area Networks (MANs) in providing broadband to rural areas.

Chairman Ronan Lupton says that MANs, which are high-capacity networks around urban areas to which operators can connect, are vital for local users, particularly businesses, and should be supported by the Government as such.

Similarly, while supportive of the National Broadband Scheme, the Telecommunications and Internet Federation (the Ibec group that represents Irish telecoms providers) has concerns about the limitations of the scheme and has warned the Government about the level of future investment needed. Earlier this month the group said that it could cost up to €2.5 billion to build a new national multi-platform access network.

For those who have been connected through the National Broadband Scheme, there are no such concerns. According to Máire Ui Mhaoláin of Comhar na nOileán, the Aran Islands-based development body with responsibility for allocating funding to local businesses, broadband connectivity has given a huge economic boost to the area.

“There has been a great response from users, both individuals and businesses. We have seen a surge in applications for website development grants from local businesses, keen to get online.”

The arrival of broadband has also helped Comhar na nOileán itself, which is exploring the idea of developing video conferencing facilities between the islands.

The potential economic dividends of broadband access cannot be overstated, says economist Jim Power.

In a recent research paper, he argued that, in Co Mayo, for example, if high-quality and affordable broadband were to result in the creation of one new small business employing 10 people in each of the electoral districts covered by the NBS, it could result in a net wage injection of €26.9 million into the local economy.

For small business owners such as Seán O’Flannagáin broadband access has meant that conducting business away from the metropolitan centres has become a viable prospect, something that will ultimately feed back into the local economy.