Viviane Reding: supports Comreg

Last week's column had just been filed when a veritable cornucopia of broadband news came in though the wires.

First up was a study from the boffins at Oxford University in Britain and the University of Oviedo in Spain confirming what I've been writing about for some time – that Ireland has been asleep at the broadband wheel.

The two universities released a report that revealed the quality of broadband connections in Ireland is inferior to that of less developed economies such as Turkey, Latvia, Estonia, Bulgaria and Romania.

In terms of broadband quality, Ireland barely managed to fall into the category of "meeting the needs of today's applications" and was cushioned by just two countries from falling into "below today's applications threshold".

Ireland' capital city hobbled into 87th place for the quality of its broadband. But worry not: at least we're higher on the list than those stellar broadband nirvanas of Warsaw, Soweto and Rome.

The report also stated that we had poor fixed and mobile broadband quality. Which might come as a surprise to over 500,000 3G subscribers in the country who have been fooled into thinking it is actually good.

A few weeks ago, this poor performance was questioned by former chairman of Intel Craig Barrett, who said that Ireland's long-term future as a foreign direct investment magnet could be hampered by issues such as broadband quality.

Underlining Barrett's point was Professor María Rosalía Vicente of the University of Oviedo who said of the study: "It… provides fresh evidence of the urban versus rural quality divide. This quality divide could indicate how future divides in wealth may take shape, as broadband is increasingly determining the ability of individuals, firms and nations to create future prosperity."

All, however, might not be lost. The report has caused confusion in some media circles because the study is made up of various components – Ireland scored well in some, dismally in others. Interestingly, Ireland was considered one of the top 20 countries in broadband leadership and as an innovation economy.

One industry commentator also pointed out that the report could be taken with a grain of salt because of the commercial involvement of router manufacturer Cisco.

No report is commissioned by a commercial entity without some vested interest attached. I'll let you decide what that might be though the clue is probably in the word 'router'.

l There was better news for Irish communication infrastructure when a few eurocrats backed Comreg's proposal to lower the prices charged by Eircom to its competitors for access to its network – better known as local loop unbundling (LLU).

It is claimed this price reduction would also prevent Eircom charging other operators for costs they would not incur in areas where lines are not accessed by other operators due to limited economic viability.

"I am right behind ComReg's cost-oriented prices. In the short term, they will result in better prices for consumers, and boost competition in the long term so that consumers also benefit from a wider range of services," said EU telecoms commissioner Viviane Reding.

Ostensibly, this is good news. Comreg has yet to put out its final decision in this process. Once that decision is reached, the telco operators have a period of time (usually 21 days) to appeal. So it's far from a done deal and one would suspect that Eircom might be twitchy about any further dents in its short-term revenue streams.

It is, nevertheless, too late for companies such as Smart Telecom – a company which suffered dearly (literally and figuratively) because of LLU pricing and the general shenanigans surrounding the process of transferring customers from one company to another.

lWe're all worried about economic recovery. The government is even hoping that IT will build the blocks that construct the smart economy. A recent IDC study, commissioned by Microsoft, investigated the contribution of IT to gross domestic product (GDP).

The upshot is that the information technology sector should be brandishing the letters IT on its muscled chest replete with cape, boots and quiff. Because it seems as if the sector is performing heroically.

The report claims that IT spending will be €2.9bn in Ireland in 2009 with employment expected to grow by 8,000 to 2013.

IT-related activities will, it said, generate €4.8bn in taxes in 2009. Over the next four years, IT-related taxes are expected to increase to nearly €5bn.

The report also highlighted software as the engine behind this growth, claiming that while spending on packaged software will be only 19% of total IT spending in 2009, 52% of IT employment will be software-related.

Software is also set to drive the creation of nearly 150 new businesses between now and the end of 2013. Most of these companies will be small and locally owned.

Of course, because Microsoft commissioned the report, IDC is keen to butter up its client, claiming that Microsoft and its "ecosystem of local partners, vendors and service providers are a major catalyst of local economic growth and opportunity, during both the current economic difficulties and recovery".

Additionally, IDC claimed that companies in the Microsoft ecosystem employ 41,000 people and for every euro Microsoft will make in Ireland in 2009, companies in the local ecosystem will make €9.22.

I'm sure the Obama administration will be keeping a close eye on Microsoft's "contribution" to the Irish economy.