Oireachtas communications committee chairman Noel O'Flynn urges tax breaks and other incentives to encourage computer use, writes Jamie Smyth, Technology Reporter

The Government should offer tax breaks to people buying new computer and internet packages to encourage the use of broadband, says the chairman of the Oireachtas Committee on Communications. It must also use its own purchasing power to promote telecoms competition.

Mr Noel O'Flynn, who will formally present launch the committee's report on broadband next month, spent several weeks earlier this summer listening to the views of the telecoms industry, regulators and users to evaluate the reasons for the slow take-up of high-speed internet services in the Republic.

"The question is no longer why do we need broadband. The question is how quickly can it be delivered," says Mr O'Flynn, who clutches a brief which details that 94 per cent of businesses in Denmark have DSL (digital subscriber line) and 26 per cent of homes in Belgium have it.

"Irish DSL penetration is at just 1 per cent," he says.

This is unacceptable because broadband is the key to economic success, says Mr O'Flynn, who has identified two problems: access and a lack of user interest.

"It is clearly both a demand and supply problem," he says.

About two-thirds of households have computers but only 38 per cent of these access the internet. It is likely that many of these computers are outdated and cannot connect to the internet, never mind high-speed access, he says.

To solve the access problem and get more households online, the committee's report will recommend setting up a "computer scrappage" scheme, which would work in much the same way as a car scrappage scheme, says Mr O'Flynn, who is involved in the motor trade in his native Cork.

Under this scheme the computer industry and the Government would work together to promote the benefits of broadband internet and offer consumers a cheap way to get online, he says.

The scrappage scheme would encourage firms operating in the Republic to sell cheap packages of computer equipment and internet subscriptions. Consumers who bought one of the special packages would receive a tax credit from the Government to give them an incentive for going online.

Mr O'Flynn describes the special computer packages as the "Volkswagens of the PC industry", in other words they wouldn't be the latest models but would offer people a cheaper way to connect to the internet.

The scheme would encourage people to donate their older computer equipment to new schemes that could be set up in local communities for people who cannot afford to buy one of the packages.

The scrappage scheme would offer tax credits to people who donate equipment, which could be put to use for the community. A similar initiative is already up and running in Tallaght where some community schemes have set up internet cafes to enable local people to surf the internet, he says.

"If we don't do this we will exclude a whole section of Irish society from the internet."

The proposed scheme would increase telecoms and internet use among the public, thereby boosting the industry's profits. The State would also benefit from this through the introduction of the proposed Government levy on providers, which is intended to pay for the provision of broadband to schools, he adds.

The levy, which has already been proposed by the Minister for Communications, Mr Ahern, is being strongly opposed by the telecoms industry.

But something has to be done and young people are the ones that will use the Web most, says Mr O'Flynn.

"We should have a PC on every school desk by 2010 for fourth, fifth and sixth years. By this stage everything will be done on the internet and people will have to be completely computer literate.

"We cannot claim that Ireland is or will be a knowledge-based economy without providing the proof of our serious intent."

Mr O'Flynn's committee heard presentation's from user groups and companies which blamed the incumbent firm, Eircom, for the slow introduction of broadband infrastructure in the Republic.

But he is loath to apportion blame on a single party.

"In fairness, Eircom has pulled out all the stops in the past six months to roll out DSL... I think this change in attitude was brought about by increased competition from satellite and wireless broadband technologies," he says.

But Mr O'Flynn is concerned about the danger of wasting broadband resources.

"There is so much fibre optic cable in the ground that is unlit and this could be managed better whether in public or private hands... there needs to be more co-ordination of the networks."

Mr O'Flynn admits the Government made a big mistake in selling off Eircom's local loop telecoms infrastructure, when the company was floated. This lesson has been learned and there is no question of selling off the ESB's infrastructure, he says.

He also floats the idea that all the fibre infrastructure in the State could be managed by a proposed a new managed services entity (MSE).

Certainly the MSE's role should not be confirmed to just managing the new regional metropolitan area networks, which are being built by the Government for €60 million.

A competition to chose a private firm to operate the MSE is out to tender and a decision is expected next month. Axia, Enet and Data Electronics are the three bidders for the contract.

Mr O'Flynn says there is a concern that the ESB's new €50 million State-wide broadband network will be under-used unless it reduces its prices for customers.

The Government should be a major user of this network and should use its own purchasing power to promote competition in the telecoms in the industry.

A Government decision last year to buy all its telecoms and internet services from a sole provider Eircom should not be repeated, says Mr O'Flynn.

This contract should be changed when its comes up for review next year, he said.

"The Government should spread its business to make it more effective," he says.

Mr O'Flynn is also leading a crusade to get to the bottom of the high cost of mobile phone services in the Republic. Last week his committee heard Ms Etain Doyle, chairman of the Communications Commission (ComReg), describe Irish mobile phone charges as among the highest in the world. Next week the committee will have the opportunity to question the heads of all the mobile operators.

"I can't accept that Irish people use their phones more than Italians, Spanish or the French, who themselves are all great talkers... Ireland is a very profitable market for Vodafone and O2" "I hope we will get a broad feel for the mobile market."

The committee could then make recommendations to the Government or issue a full report as it will shortly on broadband.