The State drew closer to receiving a 1,500 per cent increase in its Internet capacity as telecommunications giant Global Crossing landed the first of two under-sea fibre optic cables in Ballinesker, Co Wexford, this week.

The cable, which runs under the Irish Sea to Whitesands in Britain, will put the Republic onto the Internet backbone by connecting directly to Global Crossing's AC-1 transatlantic cable to the US. The cable also links into the company's planned 24-city network in Europe.

The Global Crossing project is the £60 million (€76 million) centerpiece of the Government's Public/Private Partnership programme to expand high speed "broadband" Internet connectivity in the State, while dramatically lowering costs.

According to figures put forward when the project was initially announced last July, the cables will boost the Republic's existing capacity by 15 times, while reducing costs to 10 per cent of current prices. The Government hopes the project will make the Republic an attractive European centre for e-business.

The project "is a very good announcement at a very good time," says Mr Seamus Mulconry, e-commerce analyst with Andersen Consulting in Dublin. "It is extremely significant. First, it puts us on the Internet backbone. It also means the Republic is connected to a major brand, Global Crossing. They are major players and will be widely recognised by international businesses. Finally, we should get, if not cheap, then less expensive bandwidth."

According to a Department of Public Enterprise spokesman, the project is on target for completion in June. Then, an exchange facility known as a "telehouse" will enable Global Crossing and other telecommunications operators to offer bandwidth - Internet capacity for voice, video and data communications - to business customers.

It is understood that the Government is close to naming a major international telecommunications company as operator of the first "telehouse", already under construction in Dublin's Citywest business park. A second Dublin facility is also on the cards.

In the original agreement last July, the Government negotiated to receive cables at two landing points and 160 "units" of connectivity, each unit comprising a single STM-1 line with a 155 megabit connection. Of the 160 units, 48 are allocated to the Dublin/US route, and the remaining 112 will connect Dublin and the European cities on the network.

The cables, which each hold 12 fibre pairs, can transfer data at a rate of 25 gigabits per second. Fibre optic cable is such an efficient digital medium that only two or three pairs are needed to carry the full 160 units of capacity.

Having two landing points is considered crucial because it

guarantees customers will not lose their connectivity if one cable is damaged or accidentally severed because data traffic can be transferred to the other cable.

The second cable will run between Kilmore Quay and Bude in Britain and will connect in June to AC-2, Global Crossing's second transatlantic cable, still in the process of being laid.

However, the spokesman noted that the Government has also secured options on highly-valued "dark fibre".

Dark fibre is unlit fibreoptic cable, which means the operator selling the dark fibre (in this case, Global Crossing) will not manage it by linking it into its own electronic network at either end. Instead, other operators can buy this potential capacity and manage and light it themselves, allowing for greater control and increased profits.

Telecommunications analysts say dark fibre remains a prized commodity in the European market.

In the unusual Public/Private Partnership deal, the Government will offer the available bandwidth to bidders at its aggregate cost of obtaining connectivity from Global Crossing.

The minimum bid is a "basic bundle" of 12 STM-1 lines at £5 million. Volume discounts apply for adding in further STM1 lines and purchasing dark fibre. Such prices are far below the current rates for buying STM-1 lines between Dublin and London.

Early this week, Band-X.com, a London-based company website that auctions excess bandwidth for telecommunications companies, was offering single STM-1 London/Dublin lines at £3.5 million.

Irish bandwidth is thus likely to be much cheaper than in other European countries, making the Republic an attractive site for multinational e-business companies. It is understood that the Government expects sharp price competition in the bandwidth market, since business customers can see the mark-up offered by competing carriers over the Government price.

IDA Ireland is already heavily promoting the Global Crossing deal to prospective companies abroad. In addition, Canadian infrastructure company Worldwide Communications is privately laying another undersea cable from the US into the Republic and on into Europe, to be completed in October.

Worldwide announced the project last September, noting that the company believed the Global Crossing venture would not meet demand for bandwidth. With such projects the State is set now to go from being a minor entity in terms of bandwidth to being potentially a significant European player.

While many people seem to believe the scale of the cable projects means only multinationals will benefit, Mr Mulconry stresses that Irish companies of all sizes will have new opportunities.

"The project will attract multinational companies but they will also be looking to do business with smaller Irish companies. They'll be looking for partnerships and looking for joint ventures," he says.

The new cables mean Irish companies also will begin to view the US as an accessible e-business market, he believes.

Irish new media companies that design Web pages and e-commerce sites are obvious candidates for partnerships. Ms Catherine Feeney, marketing manager for Dublin design company Webfactory, says they are ready for the "serious dot.com projects" which should come to the Republic when bandwidth increases and prices fall substantially.

She says the Republic is already attracting European Web projects because of the "very positive environment" and strong Web development skills here. As an example, Ms Feeney notes that Webfactory this week launched an Irish-based multilingual personal organiser site, Tutticom.com, for a French company.

The Information Society Commission also thinks the connectivity projects are very positive, according to spokeswoman Ms Brenda Boylan. Increased bandwidth and reduced access costs should trickle down to individual users and make the Internet more generally available to people, she says. In addition, she notes that the venture should help spur the development of "e-government".

Government representatives have mentioned both voting online and filing tax returns online as likely e-government initiatives in the future, she says.

klillington@irish-times.ie