1. Broadband Development in Ireland Professor William H. Melody Managing Director, LIRNE.NET Center for Tele-Information Technical University of Denmark melody@lirne.netmelody@lirne.net, www.lirne.netwww.lirne.net Presentation to Joint Oireachtas Committee on Communications, Marine and Natural Resources ICT sub-Committee 8 July 2003, Dublin

2. Characteristics of 21 st Century Economies Driven by the services sectors Founded on information/communication networks – Internet; e-economy Dependent on effective reforms in the telecom sector – broadband infrastructure Strengthening links among local, national, regional, internatonal networks and markets

3. Stages of Telecom/Information Sector Reform Telecom Liberalization (Participation, Univ. Access) Expanding Network Capacity (Broadband) Preparing the Network Foundation for New Services Developing New Services – Applications Everywhere Applying Services Productively in Different Sectors Telecom Reform & Regulation – Key Driver for Implementing Policy Reforms for the E-economy

4. ICT INFRASTRUCTURE for the E- economy Regional Development Finance/ Banking Disaster Management Travel & Tourism Manufacturing Media & Cultural Sectors Health/Medical Government Services Education/Training Applications Electronic Services (Pay TV, VAS, Internet) Multimedia, etc. (Public, User group, Private) Content Broadcast Media Film Libraries Software etc Interactivity (Instant & Delayed) Voice Data Sound Graphics Video Telecommunication Facilities Network (Broadband Superhighway) Computing / Information Technology Telecommunication Equipment Manufacturing

5. Equipment Supply Telecom Infrastructure Service Development Competitive Markets Monopoly/duopoly/oligopolyCompetitive Markets Internet VAS Databases Network Management Telecom Equipment Computer Hardware Software Consumer Electronics PTOs The telecom sector value chain

6. Significance of Network Unbundling Industry Sectors - Equipment, Operator Networks, Services Fixed and Mobile Basic Network Layers *Raw Facility Capacity *Network OSS & Management *Communication Services *Content

8. Convergence Sectors Drivers of Convergence Technology Industry-Supply Market-Demand Policies/Regulation Industry Specific Convergent Applications Finance Commerce Education Health Publishing Manufacturing etc. Content Telecom Computing The Dimensions of Convergence on the Information Infrastructure

9. Ireland´s Convergence Contradiction The IT Celtic Tiger of Europe – EU Leader * most benefits to the IT sector Telecom Reform & Broadband Development - Slow, EU Follower * delayed benefits to economy & society Why?

10. Key Elements of Telecom Reform Establish an Independent Telecom Regulator - Comreg Privatise the Incumbent Telecom Operator - eircom Introduce Effective Competition to the Incumbent Operator Minimise Barriers to Participation of New ICT Network Services Suppliers

11. Ireland’s Progress in Telecom Reform Delayed start (1996) compared to EU (1987), and especially the European Leaders Difficulties in working through some of the major required institutional changes Uneven performance – slow Internet and broadband development; but now a leader in mobile (80% penetration) despite relatively high prices

12. Ireland’s EU Status in Implementing Telecom Reforms - I Independent Regulation established and functioning effectively as a member of the European Regulator´s Group Full privatisation process for eircom not yet complete Surplus eircom employment problem not yet solved Only limited competition has developed so far

13. Ireland’s EU Status in Implementing Telecom Reforms - II Limited development of wholesale markets for network services – which restricts opportunities for new services development Relatively high prices for most network services in EU country comparisons eircom actively resisting implementation of EU and Ireland pro-competitive and pro- participatory policies

14. Speeding Up Broadband Network Development in Ireland - I Ensure the regulator (Comreg) has the resources and support to drive the telecom reform process forward Facilitate completion of the structural adjustments required of eircom in its transition from a monopoly protecting existing services to the leading player in a competitive market developing new services Wherever possible, lower the barriers to participation in new services development & applications * This is especially important as network management for new services in a broadband environment is migrating to the edges of the network in leading countries, i.e., away from centralised management by telecom operators

15. Speeding Up Broadband Network Development in Ireland - II Build the essential human capital – support/establish multidisciplinary education, training & research on ICT issues of supply, demand, applications, policy & regulation Facilitate government institutions becoming leading edge users applying international best practices Enhance awareness and diffusion of best practices among SMEs

16. Speeding Up Broadband Network Development in Ireland - III Encourage experimentation in the development and application of new network services. Successes are rarely picked in advance Ensure there is sufficient spectrum allocated for wireless applications. They are likely to be a significant component of future broadband networks Be careful with direct government subsidies for broadband network construction. Experience suggests very limited benefits; it can create uncertainty in capital markets and reduced private investments. Steps to stimulate demand and promote competitive conditions for supply are generally more effective policy paths to follow.

17. LIRNE.NET, www.lirne.netwww.lirne.net A Strategic Collaboration for applied research, training, policy and regulation support, relating to information infrastructure and new network economy development Center for Tele-Information (CTI), TU Denmark Economics of Infrastructures, TU Delft, Netherlands LINK Centre, Wits University, South Africa Media@lse, London School of Economics, UK Participate in the the World Dialogue on Regulation for Network Economies; review and comment on the research, www.regulateonline.org www.regulateonline.org For more information contact Merete Henriksen, WDR Coordinator, henriksen@lirne.net Tel. + 45 4525 5178; Fax + 45 4596 3171henriksen@lirne.net