Govt fails the UK SME broadband test (The Reg)

dahamsta

Govt fails the UK SME broadband test

To me, that sounds like the sensible commentary of an organisation with the best interests of its members in mind.

We live in a different world here in Ireland.

adam

SkepticOne

What you tend to have here is regional interests campaiginging. There is much talk of the "digital divide" either between Dublin and the rest of Ireland or urban vs. rural. While these are important issues, they tend to ignore the increasing divide between Ireland and the rest of the developed world. The very first mention of IrelandOffline in the Dail immediately turned into a regional argument.

From a residential and very small business point of view, there is little difference between one region and the next when it comes to Internet access. Everyone uses obsolete technology, everyone pays by the minute. Recently, we've had someone posting from Stillorgan, Dublin who can't get ISDN because he's on a carrier line. We shouldn't event be talking about ISDN at this stage for Internet access.

I believe this is due to the nature of the multi-seat constituencies we have here. This tends to make politics a very local thing with TDs competing with each other to mend potholes and erect streat lights rather than discuss national issues.

It's as if politicians are not interested if it means areas outside their constituency also benefit. The image of moving deckchairs on the Titanic comes to mind.

This, of course, is not going to change. It simply places a greater burden on national interest groups such as IrelandOffline. Further problems like cutting back on infrastructure spending (a huge mistake) add to the challenge. There is no real answer except to keep at it, in my opinion.

Ireland now faces great danger economically. The country still depends on foreign direct investment and will continue to do so for the forseeable future. One of the big attractions - low corporation tax - ceases to be an attraction when the foreign corporation is nolonger making a profit. There is no money to be saved staying in Ireland. The corporations will simply move to locations where wages are cheaper. Without this attraction we are left with a reasonably well eductated workforce but the (internationally recognised) poor telecoms infrastructure now gives a very bad image. How technically adept are we if we still pay by the minute for "56K" and ISDN internet access? Is this all we're capable of?

Well, thats what I think.

dahamsta

Good post SkepticOne, but:

"The very first mention of IrelandOffline in the Dail immediately turned into a regional argument."

Wha? I take it you mean "Ireland offline" in general, yes?

Another thing I think is vitally important is how this applies to growing businesses. By that I mean small businesses with less than 25, or even less than 10 employees, in particular in the tech sector. To them, as they grow, there is absolutely no reason for them to stay in Ireland, in fact if anything the current situation is almost encouraging them to leave. That can't be good for Ireland, no matter which way you look at it.

adam

b20uvkft6m5xwg

No Adam, Skeptic meant exactly that!

The 1st (and only, direct AFAIK) mention of IrelandOffline was by Gerard Reynolds(FG) TD for Leitrim. Where he mentioned the neglect of Irelands "Regions" in terms infrastructual investment, and stated something like.... he was awareof an org. recentlyset up to address some of these issues. He has the "Regions" brief in the current opposition.

Heres the link from the .com site....
http://www.irelandoffline.com/Article.asp?id=290501

SkepticOne

Yes. Shortly after the foundation of IrelandOffline (the organisation) a TD mentioned it in the Dail. Another TD then went on to speak about regional deficits in infrastructure.

On the issue of very small businesses, yes, these will be very important as the economy slows down. Generally, after a recession, these are the first to grow. Right now, Birmingham, Newcastle, Hull are much more attractive to small knowledge based companies.

The current slowdown in the US economy is having an amplified effect here. So much of our 'Celtic Tiger' growth figures are based on US multinationals, attracted by low corporation tax + grants setting up here and running vast profits through their Irish operations.

In a recent interview with Bill Gates by an Irish newspaper, Gates said that Ireland was very usefull. "We do a lot of localisation and production there [Ireland]". Localisation means importing language specialists from other parts of Europe and tayloring already internationalised software for local needs. They do this here because of US corporation tax laws. In order to qualify for paying corporation tax outside the US, software companies need to export an unfinished version of the product to the external country (Ireland). Microsoft sell very cheap internationalised software to Microsoft Ireland where it is localised and then sold at huge profit to Europe. 10% of this huge profit is paid in tax to Ireland.

This only works if the corporation as a whole is making a large profit. If the company is not making a profit then that profit cannot be transferred to Ireland for tax purposes. The company won't be paying corporation tax anyway.

Microsoft will probably allways make a profit. They are the Eircom of software makers. They have achieved 'lock in' for so many of their products. If you work for a company like Lucent, on the other hand, the news is not so good for the Irish operation (although they may well keep their head office and research division in the States in anticipation of better times).

As I was saying, a lot of the 'Celtic Tiger' growth has been due to the running of profits through Ireland. Each time a new company set up, a chunk of what normally would be the American economy arrived in Ireland and was included in the Irish figures. This meant that although Ireland had a low corporation tax, a high proportion of Ireland's tax take was in the form of corporation tax. Corporations were coming here in order to pay tax.

This process has now gone into reverse and we are now looking at negative "growth" figures for next year although the domestic economy will continue to grow and, I believe, employment should remain relatively high.

The government now need to promote small businesses that cater to the international market. Because of Ireland's geographical location, these businesses need to be concerned with high value-added products and services. Obviously, communications will be very important. These companies will depend on the Internet not just to sell products but for research and development, downloading software etc. Small companies can neither afford leased lines nor ISDN if it means spending hours online. Basic shared bandwidth broadband and FRIACO based services are what is needed. These are available in the UK and several European countries but not here. Small Irish companies are therefore at a severe disadvantage.