reality BYTES
By Adrian Weckler
Should Google, Microsoft and Facebook have to contribute to the cost of building broadband networks in Ireland?
That is the proposal being put forward by Ibec’s telecoms and internet federation (TIF). The argument is that ‘content providers’ are getting ‘a free ride’ off telecom companies’ backs.
This is because they are doing business on telecoms networks to which they contribute nothing, other than their own cost of access. ‘‘It’s not just in Ireland that this is an issue,” said Tommy McCabe, the director of TIF.
‘‘The amount of content on the web is growing exponentially. When current networks were built, they were designed to accommodate a much lower utilisaton of data. So you have to have fibre.
‘‘But we estimate that it would cost €2.6 billion in extra investment to put down that fibre. To get a return on investment in that, it would take 12 years just to cover your costs.”
Firms that are driving the extra content should therefore pony up to cover some of this extra cost, said McCabe.
‘‘We would start with the larger players [content companies] and the smaller ones might then be on the coat-tails of the trailblazers,” said McCabe. ‘‘The bottom line is that is just doesn’t make sense for telecoms companies to invest in next-generation networks without a return on investment.”
I’m not convinced by this argument. For starters, there would be little demand for fast broadband networks if content providers did create demand. Why have a 20Mbs connection without an iTunes account, a gaming connection or a TV-on-demand service?
Telecoms companies build their networks to make money, not to provide a social service to the country. This has always been the reason why companies such as Eircom and BT were reluctant to build proper broadband networks before: they could not see a return on investment.
Now that there is a proven demand for higher speeds, they are investing.
And they are investing purely to chase a business profit (as is absolutely right).
Secondly, telecoms companies are no longer monopolistic utilities. No one is forcing them to provide fast broadband speeds. Eircom once held the entire market.
But UPC is coming up with its own 100Mbs network in the summer.
The 3G operators are forging forward with faster wireless networks.
Content companies see huge advances in Irish broadband speeds without any handouts or infrastructure subsidies.
They will argue that the market is sorting the problem out.
The equation is simple: if you do not see a profit in building or maintaining a high-speed network, don’t build it. There are others already doing so.
