Group Broadband Scheme - Internet Access - Rural Broadband - Ireland Offline

Irish Telecom News

Ireland Offline expresses its scepticism at the Group Broadband Scheme

www.irelandoffline.org - Dublin, Sunday, March 7th 2004

Internet lobby group, Ireland Offline expressed its scepticism at the Goverment's recently announced 1st Call for "Group Broadband Scheme" proposals.

"With the launch of the 1st Call for Group Broadband Scheme proposals[1], it is clear the Minister intends to require that any application for funding under the group broadband scheme initiative be made in association with an Internet Service Provider (ISP) or Authorised Operator (AO)", said chairman Christian Cooke, "a so-called Broadband Internet Service Provider (BISP)".

As noted at the launch of the initiative in December, group broadband schemes are akin to group water schemes, set up in the 1960s to resolve the lack of piped drinking water in rural areas. These schemes, largely local co-operatives, now serve 10% of all households.[2]

Experience in the UK has shown that the commercial provision of broadband in rural areas is not financially viable. Low population and wide dispersal lead to lower margins than can be supported by a profit-oriented enterprise. In their recent presentation to the Joint-committee, ComReg agreed with Eircom's estimate that the installation of a phone line in rural areas is about three times that in an urban area.[3] As a result, a number of companies providing rural broadband access in Britain, all recipients of state funding, have gone out of business over the last year.[4]

Equally, there are many successful non-profit co-operatives providing affordable broadband to rural communities.[5] The Knockmore Community Network[6] launched last month, itself a non-profit co-operative in the spirit of the original group water schemes, shows how this is feasible in Ireland.

Rural communities have no intention of being left behind in broadband infrastructural development, as was the case with water supply, electrification and telecommunications. However the initiative in its current form ignores the fact that many of these areas most in need of funding are not economically viable for a profit-oriented entity to roll out services in, in terms of maintenance and ongoing costs (bearing in mind that the group broadband scheme funding only applies to set up costs).

"The only business model that has been shown to have been effective in rural communities elsewhere is for non-profit community-owned and -run networks to be set up, which are not reliant on generating revenue but whose focus is to provide a service to the community", said Cooke.

Rural communities, given the small margins they expect to deal with, should neither be expected to shoulder the additional burden of consultation in setting up and running cooperative networks, should this be the role of the BISP, as this would negatively impact the sustainability of the initiative. This would be compounded by the reluctance of the community to engage the consultants further when issues arise for fear of incurring further expense.

Ireland Offline warned that the prerequisite of partnering with a BISP as a condition of GBS funding, there is a very real danger of companies cherry-picking more lucrative areas, leaving communities for which the funding should have been made available above all others without any services.

"In short, in its current form the group broadband scheme initiative bears no resemblance to the group water schemes, to rural broadband provision", said Cooke, "and every resemblance to the packaging of subsidized local monopolistic franchises, monopolistic because no competitor could go head-to-head with a subsidized service. It is therefore better to think of them as not so much like group water schemes as 'group coca-cola schemes'."

For this reason unless provision can be made for the ability of community-run, community-owned non-profit networks to apply for and receive funding under the initiative, it is inappropriate for the Minister to refer to this initiative as addressing the broadband needs of rural communities.

[1] http://www.dcmnr.gov.ie/files/commgbs0304.pdf
[2] http://www.nfgws.ie/background.htm
[3] http://www.irlgov.ie/oireachtas/Committees-29th-Dáil/jcmnr-debates/jccmnr280104.rtf
[4] Invisible Networks (http://www.theregister.co.uk/content/69/33222.html), Independent Networks (http://www.theregister.co.uk/content/22/34569.html), Community Mesh (http://www.adslguide.org.uk/newsarchive.asp?item=1500)
[5] Oxfordshire Rural Broadband (http://www.oxonrb.net), Calder Connect Co-operative (http://www.3-c.coop), EdenFaster (http://www.digitaldales.co.uk/edenfaster)
[6] http://www.ethos.org/Knockmore.html