Thursday 25 August 2016

Why new fibre service would be a net gain for everyone

Published 15/07/2014 | 02:30

The cost of getting broadband in rural areas may now rise
The cost of getting broadband in rural areas may now rise

IS IT right or fair that urban broadband users subsidise rural ones? That's the basic question raised with Comreg's suggestion that Eircom might be able to raise the price of rural broadband services, to better reflect the high cost of providing such services outside urban areas.

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City dwellers may raise an eyebrow at being asked to pay for rural dwellers' internet services, especially when they already pay far higher property taxes, house prices and an assortment of other charges.

On the other hand, broadband is surely a national strategic asset: is there not a concrete rationale for planning a system that gives a vital piece of infrastructure the furthest possible reach, even if it involves cities subsidising country areas?

So far, Eircom says that it has no immediate plans to take the telecoms regulator up on its invitation to apply for higher rural broadband pricing.

But it's hard to see how it will be able to resist in the long term. If it can do it with the blessing of the law, why not? It has shareholders and needs to make money, just like any other private firm.

Make no mistake about it, phone lines are still Ireland's mainstream telecoms infrastructure.

Despite all the UPCs and proposed fibre broadband rollouts, copper phone lines still connect the vast majority of broadband users in Ireland.

Outside urban areas, they are often the solitary internet access route.

So a price rise is a mandatory extra cost, not an optional one.

As things stand, if Eircom is allowed to separate rural broadband prices from urban ones, it would unquestionably exacerbate the so-called 'digital divide' even further.

That's because any rise in rural broadband would have to be mirrored by a matching fall in urban broadband infrastructure pricing.

In other words, city-dwellers would gain a dividend from being relieved of having to provide a rural broadband subsidy.

So you could conceivably see the same five megabit service being sold for €10 cheaper in Dublin or Cork than in Leitrim or Tipperary.

The State's proposed fibre broadband service can't come fast enough.

Without it, it's clear that rural Ireland could fall further and further behind connected urban cousins.

Irish Independent

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