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July 27, 2010

Comments

Mack

Michael -

Did Ibec define what they mean by next generation? Does it compare with this?

https://www.google.com/appserve/fiberrfi/public/overview

Also if the cost is only €2.5bn, and the government are going to hive off some Semi-states, couldn't some of that money be used to found a new high-speed broadband company?

Or, given that such a new company would be a strategic threat to eircom (as it would be able to offer carrier services to third parties for both broadband and internet telephony, maybe even IPTV?) could the threat be used to bully Eircom into building it themselves, for free?

Michael Taft

Mack - actually my fault for not linking the report. Here it is: https://www.tif.ie/Sectors/TIF/TIF.nsf/vPages/Broadband~Publications~building-a-next-generation-access-network-for-ireland-16-04-2010/$file/TIF%20Report%20%27Building%20a%20Next%20Generation%20Access%20Network%20for%20Ireland%27%20Final.pdf

A I understand, Fine Gael is proposing a new public enterprise company to roll out NG broadband. Donal Palcic on PE suggests that this could allow the state to bring all their telecommunicatin assets into one house. Of course, we could also re-nationalise Eircom (at least the network).

Have a look at the IBEC and let me know what you think.

Mack

Scenerio #1, Fibre and wireless

is the one to go for. Fibre can at least theoritically support speeds of 1Gbit/s.

https://en.wikipedia.org/wiki/Fiber_to_the_x

The Koreans are rolling out broadband of that speed to their cities over the next 2 years.

https://www.neowin.net/news/korea-to-get-1gbps-broadband-speeds

To catch up, that's what we'd need to aim for.


Nationalising eircom is probably a bad idea - a good portion of their infrastructure is probably dated / about to become obsolete. I'm not sure how much of it is used under the FTTH (fibre optic) portion of scenerio 1. The existence of a fibre optic competitor in the cities might force eircom to undertake the cost of the FTTC work (upgrading the copper infrastructure 100 mbits max) themselves. Or perhaps share some of the cost of the fibre optic network with the state. If there is obstructionism preventing access to essential infrastructure that is needed, nationalising that portion might make sense..

Mack

"The demand-side business case for NGA is unclear, examples from other markets suggest that revenues remain flat as bandwidth increases"

...

"The Analysys Mason study indicates that at current
prices, it would take over 12 years for a NGA network
operator to recover its investment costs – not to
mention earn a return on this investment.
Such returns are unsustainable to the private investor."

So, they've decided none of them are not going undertake this themselves (except perhaps under duress). If they were under proper competitive pressure they'd have to invest just to maintain revenues / market share (they can innovate all they like after that to increase revenues). I note the comparison they make is with Virgin media - the service Virgin offer is superior to anything offered in Ireland (50 m/bits, VoIP, Digital TV, TV on demand) at far lower prices than even standard broadband & cable tv in Dublin. They could probably charge more for that service in Dublin than UPC's prices today. Surely the only reason Virgin can't in London, is either because of competition or because they are expanding market share? (In the graph are VM going from 35% market share to 58% with steady ARPUs?). UPC have an effective monopoly in cable. Maybe we should ask Virgin Media to come and build it - if even just in Dublin for now? Or at least put it out to competitive tender..

Mack

This might be worth a look. Why or how South Korea is ahead in broadband.

https://www.cnn.com/2010/TECH/03/31/broadband.south.korea/index.html

Seems to be a combination of

Competition
Government Investment
Open networks
Government Programs (subsidies for low income households)

There might be an argument for the state managing the internet infrastructure (if the current private sector encumbents won't), and facilitating liberal market in services (low barriers to entry, foster innovation).

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