Subsidise broadband or nationalise Eircom?

[patslatt]

Fintan O'Toole in today's Irish Times It's time to take Eircom back into public ownership - The Irish Times - Tue, Nov 11, 2008 advocates nationalisation of Eircom on the grounds that it has become an overleveraged plaything of financiers and that it is incapable of investing in the necessary broadband infrastructure which Ireland needs as part of its basic infrastructure.

But wouldn't it be a lot cheaper for the government to partially subsidise the rollout of broadband of all companies willing to invest in it? A few years ago the government was talking about direct broadband investment.

As for Eircom's excessive leverage,the telecoms regulator,which was given weak regulatory powers (to encourage O'Reilly to employ all those civil service level positions?), could be empowered by government legislation to punish the use of excessive financial leverage in setting telecom rates. This would force Eircom to deleverage over time.

Finally,the government budget is under enough strain already without having to nationalise Eircom.

[BluntGuy]

I agree something has to be done about the poor broadband coverage...

But if they re-nationalise Eircom, it'll just show what a bunch of incompetent fools they were to have privatised it in the first place.

Direct investment in infrastructure is needed soon and BADLY, if we are to retain any kind of competitiveness...

Of course, a lot of this could've been done during the so-called "Celtic Tiger" years, but whatever...

[Rebel CNC]

Don't worry - copper wire landlines are on the way out anyhow. Within five to ten years all our telephone and broadband traffic will be wireless and Eircom's nice little earner of ridiculous line rental charges will be a thing of the past!

Be crazy for the government to buy out the private investors now.

[TradCat]

For refusing to upgrade the old lines, Fintan O'Toole should be taken into public ownership

[adrem]

For refusing to upgrade the old lines, Fintan O'Toole should be taken into public ownership

:lol

[Big Bobo]

The profiteers need to be driven out of eircom. They will never offer the service the Irish people need.

[cyberianpan]

Fintan is up to odd things here:

Of the 15 countries rated by European Competitive Telecommunications Association last year, the Republic ranked 12th. Progress towards the EU average, never mind the world-leading position we actually need, has been painfully slow. South Korea has 93 per cent household broadband penetration and the leading countries are moving rapidly towards 80 per cent. [COLOR=Red]We're on 23 per cent.[/COLOR] And these raw figures do not take account of the quality of service.

You might think from reading the above that he had actually sourced the report showing the 23% ? No he hasn't as the "European Competitive Telecommunications Association" goes on per capita subscriber base rather than household. A small point you might say ?

Wall Street Journal
The OECD's methodology is seriously flawed, however. According to an analysis by the Phoenix Center, if all OECD countries including the U.S. enjoyed 100% broadband penetration -- with all homes and businesses being connected -- our rank would fall to 20th. The U.S. would be deemed a relative failure because the OECD methodology measures broadband connections per capita, putting countries with larger household sizes at a statistical disadvantage.

Now he hasn't given us the source for his dodgy 23% assertion, I rather suspect that Irish households tend to be larger than the (Catholic and all) nad this would be of huge significance:

UN 1995 (couldn't find more recent)
In Europe, the former Yugoslav Republic of Macedonia, with 3.8 persons per household, had the largest household size, followed by Belarus and Yugoslavia (3.6), the Republic of Moldova (3.4), [COLOR=Red]Ireland and Malta (3.3)[/COLOR], Ukraine (3.2), Latvia, Poland, Portugal, Romania and Slovenia (3.1), and Greece (3.0). The remaining countries and areas of Europe reported a household size less than 3, with the lowest being in Norway and Switzerland (2.4), Denmark (2.3) and Sweden (2.1).

And Denmark is at the top of per Capita subscribers in Europe, Sweden being 3rd ... anyone else seeing the correlation ?

But is broadband penetration even all that relevant ?

FCC 2007

As illustrated by the White House telecommunications adviser, Richard Russell, noting contradictions in OECD’s calculations of broadband penetration, OECD’s data shows that “one of the countries
doing the worst is Ireland,” yet “the very next chart showed absolute investment in [informationand technology] in the country of Ireland is off the chart when it comes to Europe. Clearly thereis a complete mismatch in the statistics that we’re looking at.

And he didn't offer any data/proof as to why taking eircom private would solve the red herring broadband penetration problem ... other than a vague claim that eircom was too burdened with debt and thus couldn't do an upgrade

Instead of the genius-level private-sector management that was going to make Eircom a dynamic national champion, the company has been passed around like a joint at a student party.
Even now, as the entire model of vulture capitalism is collapsing, another fund is queuing up for its spin on the Eircom merry-go-round.

Ireland does have a big problem with broadband :
- Comreg , the State regulators do a very poor job of service monitoring

The article by Fintan O'Toole is based on dubious research, is hysterical in tone, misses the point and generally tells us far more about the woes of the Irish Times than Ireland.

cYp

[fionnmccool]

Who tells the regulator to allow any price increases at all ? whats to stop the regulator forcing price decreases in everything ?

[wombat]

But if they re-nationalise Eircom, it'll just show what a bunch of incompetent fools they were to have privatised it in the first place.
.

Like a lot of O'Tooles theories, its based on assuming that the original Eircom was competant at delivering telephone service. The idea that the state should own an organisation providing a service that people no longer want is quite common among aging socialists. Its a pity that some of the younger ones follow the same misguided beliefs. There is a very good reason why Eircom is not being bought by a telecom company - the return on the needed investment is not high enough.

[jmcc]

The profiteers need to be driven out of eircom. They will never offer the service the Irish people need.

Weren't the Eircom employees via their ESOP some of the biggest profiteers in the privatisation of Eircom? It's not like you to be criticising the workers Bobo.

Regards...jmcc