Britain shows way on cheap broadband

Here's irony for you: Microsoft is testing the online gaming capabilities of its Xbox console on its own internal network in the Republic because of a lack of decent broadband connectivity in Dublin.

In addition, although the company manages the distribution to its markets in Europe, the Middle East and Africa of the console from the Republic, this State will not be included among the first countries when it launches its online gaming service in coming months.

"Obviously the Xbox is about broadband, the Xbox is about online gaming, it's about making people want to have broadband in their home," Microsoft Ireland's entertainment manager Mr John Guest told an audience at technology entrepreneur networking event, First Tuesday, last week. "I feel the same aggravation you do about the lack of development [of broadband] in Ireland."

Meanwhile in Britain, about a million people have now signed up for broadband access, according to figures released this week by the Department of Trade and Industry. British telecommunications regulatory agency Oftel estimates that about 20,000 new connections go in every week. In contrast, we have somewhere under 2,000 connections (the last estimate was about 1,500, but presumably we have a few more since then). You make the comparison: one in 60 British people has a broadband connection; in the Republic, one in every 2,466. In the US, it's one in 12.

Oftel's figures may make it seem like the British have a terribly enlightened policy about broadband. But until very recently, they had the same problems we are having here: a single dominant incumbent player (BT) saying it could not lower the wholesale prices it charged its competitors, or the retail prices for consumers, for broadband.

BT's story changed with the arrival of a new chief executive, Mr Ben Verwaayen. Very rapidly the company got broadband religion and copied Deutsche Telekom's approach of cutting prices and aggressively trying to build market share. Cynics ungraciously pointed out that the reduction in wholesale prices came well after some of the competition had been forced out of the market. They also noted that the EU had been doing some loud sabre-rattling about BT's pricing. Fans of broadband didn't care - as the 20,000 figure makes amply clear.

Government plans for broadband networks and fibre rings around key cities and towns - if they are not slashed by Mr McCreevy - should help spark some shift in the state of the broadband market here. But a stronger regulatory framework coupled with the (re)introduction of real competition into the telecoms market is also needed.

One area of connectivity that could help significantly change the entire market, and rapidly, is wireless (radio wave) internet access. At the moment, this is nearly moribund, outside some smallish local networks developed by wireless devotees. A promising move was the decision by the Office of the Director of Telecommunications Regulation to free up some spectrum - or defined space in the wireless airwaves - for unregulated use.

This means small-scale companies or dedicated individuals can set up networks of their own, providing relatively cheap wireless internet access, at speeds that often exceed DSL. But some entrepreneurs also feel there's a need for the regulator to offer some inexpensive licensed spectrum as well. Licensed spectrum means purchasers are guaranteed the use of a certain slice of spectrum, which in turn means they can offer guaranteed levels of service to customers.

In the unlicensed realm, bandwidth is open to all and network speeds rise and fall depending on how many users jump online. One Dublin wireless operator, Leap, says it could offer guaranteed levels of service within a 30-mile radius of the city, rather than its current three, if it had licensed rather than unlicensed spectrum at its disposal. That's a compelling business argument.

A related issue is whether people in the vicinity of a wireless network should be able to use that network themselves without express permission - say, if you have a laptop and can log onto the network of a nearby building. This does not mean one can access the internal computer network of whoever set up the connection - only that one can get online through the wireless bandwidth.

A recent meeting of the Wireless Wednesday group in Dublin featured a discussion over whether using such bandwidth is legal here, with several lawyers arguing that, under current law, it is not. Ironically, MIT Media Lab founder and director Mr Nicholas Negroponte has just published an article in the current edition of Wired which argues that in future, people will get mobile connectivity by jumping from one wireless (or WiFi) network to another, which he calls "lily-padding". If that's the future, Irish frogs will not be doing much leaping. This is a legal issue that needs clarifying.

In last week's column, I noted that a Yes vote in the Nice referendum would lock in the State's ability to set its own taxing levels, important for retaining the controversial (to the EU) low corporate tax rate here. The No campaign is making a similar claim for a No vote. A reader kindly pointed out that chapter six and seven of the White Paper on the referendum make clear that the State would retain its ability to veto any attempt to change its tax levels regardless of a Yes or No vote.