Dermot Ahern responds to Scanlon

Before demolishing Scanlons thesis the Minister makes the point that new legislation could lead to Scanlons members being locked up . I hope that the installation of a Pairgain is a three strikes and you are out offence

I will also issue a set of Policy Directions to the regulator, ComReg, on the issue of pricing and introducing new primary legislation which will create indictable offences for serious breaches of the communications legislation.

The Article in Full.

THE approach taken by Con Scanlon in last Monday's comment piece on these pages was curious. Quite frankly, I find it extraordinary to be positioned several degrees to the left of a trade union leader.

The central tenet of Mr Scanlon's argument is that the Government and the Regulator should walk away from the telecoms market - leaving Eircom with market dominance and leaving it up to them to dictate the pace of broadband roll-out. Such a move is untenable. It would cost jobs and seriously impair Ireland's competitiveness. It would lead to the 'haves' and 'have-nots' in Ireland with respect to broadband and this is untenable. I want to work with the telecoms industry to provide broadband to as many people as possible, irrespective of their location.
Ireland's population spread, the lack of cross-platform competition, poor copper infrastructure and market response being slower than the pace required to maintain competitiveness mean that the text-book telecoms market remains only an aspiration.

Most people agree that it would be irresponsible to regulate for a dream when the reality is proving detrimental to the wider economy. Forfás, the National Competitiveness Council, the IDA, Údarás na Gaeltachta and Shannon Development all assert that broadband is the single most important economic infrastructure for future economic development. Plainly, jobs and competitiveness are at stake if we don't intervene.

The European Commission has accepted the Irish position on this. They have gone so far as to publish guidelines for spending structural funds by all member states in this area. Indeed, throughout the EU there is consensus now that in clear conditions of market failure or of sluggish market responsiveness it is perfectly legitimate for governments to intervene. Our broadband policy today is an extension of Ireland's long-held policy of intervention assisting competitiveness.

Active State intervention investing in human capital, encouraging foreign direct investment, advancing EU membership, cutting taxes, driving Social Partnership and prioritising education built Ireland's prosperity. Clearly, there was more to Ireland's economic success than passive governments withdrawing before market liberalisation.

Under my broadband initiative, future-proof strategic fibre, and 'Community Broadband Exchanges' where new entrants can access the last mile, and back-haul, will be constructed and delivered throughout Ireland. Metropolitan Area Networks will also be completed in 19 towns and cities.

This infrastructure is open-access. Full, unimpeded access will be provided to all telecoms companies. The company which will shortly be appointed to administer the infrastructure will not deal with end-users, only telecoms companies.

These moves will facilitate access by telecoms companies into markets throughout Ireland. The sole aim is to drive competition, enabling the market to provide broadband throughout Ireland at an affordable price.

I am also establishing a Group Broadband Scheme, similar to the Group Water Scheme, which will allow rural communities apply for grant funding to deliver broadband from the market. All of the telecoms companies can benefit from this move.

I will also issue a set of Policy Directions to the regulator, ComReg, on the issue of pricing and introducing new primary legislation which will create indictable offences for serious breaches of the communications legislation.

In arguing for light touch regulation, Mr Scanlon is placing the interests of his members above the interests of the greater good. Government has a duty to act in the wider national interest. To that end, until competition thrives there will be no 'light touch' regulation on broadband.

Mr Scanlon goes on to argue that the minister and the regulator are "forcing Eircom to provide its network and services at uneconomic rates". Empirically, access rates here are amongst the highest in the EU.

Mr Scanlon also argues that the main problem is the lack of network investment - I agree.

While the Government is ready to place its money where its mouth is on this issue Eircom shareholders - 14.9pc of whom are CWU members - took €500m out of the company during the summer. Surely this money should have been re-invested in broadband, enabling exchanges and investing in the networks. Such a move would have brought huge financial rewards in the long term.

In time, Eircom will broadband-enable most towns in Ireland. This move will be widely welcomed. I want to see Eircom in every town and village vying for broadband customers, with wireless and other providers. In time, every household and business will require broadband. Mr Scanlon should look beyond the next windfall to the long-term interests of his company and begin driving the broadband market. Clearly, there are significant revenue streams for Eircom and all telcos in this market.

The Metropolitan Area Network broadband programmes or the other initiatives I have undertaken will assist telcos and consumers alike in building these markets. We are all aware that the key impediments to broadband roll-out are high price, access problems and a lack of cross-platform competition.

Government policy is about addressing these issues. It is about empowering Irish towns and communities by giving them equal access to broadband and a competitive choice of provider. Mr Scanlon's policies on behalf of his members are about maintaining market dominance. Ireland cannot afford his approach. Mine and the Government's approach is to drive broadband, to keep this country at the top of the technological tree.