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Summary

In June 2016, the newly appointed communications minister in Ireland announced that broadband with speeds of at least 30Mbps will become a legal right for all citizens by 2017. The aim is to reduce the large digital divide between the east and west coasts of the country. The new proposal would see the universal service obligation (USO) updated from dial-up speeds to 30Mbps once the rollout of the National Broadband Plan (NBP) has started.

Ireland's proposed USO for broadband is the most ambitious among the EU28

The Irish communications minister, Denis Naughten, has announced that broadband with speeds of at least 30Mbps will become a legal right for all citizens. By contrast, the UK has so far only proposed a broadband USO of 10Mbps by 2020. Although the UK proposal hasn't been finalized and may rise over time, Denis Naughten has criticized the proposal for not being ambitious enough because it may not be capable of meeting data demands in as little as five years' time. Instead, he is recommending speeds of 30Mbps in Ireland, which would be more appropriate to ensure homes and businesses are adequately served for the next 30 to 40 years, while also reducing the large digital divide that exists between the east and west coasts. The east coast already has access to fiber-optic speeds of up to 100Mbps, while the west coast continues to experience speeds of between 2–5Mbps. This means that in rural areas, 20% of the population cannot currently access broadband speeds of at least 30Mbps.

The new proposal would see a much-needed update to the existing USO, which is currently only set at dial-up speeds, but any formal legislation is expected to be delayed to 2017 at the earliest. This is because the rural network still needs to be rolled out before the government can enforce any new USOs on providers. The minister has also outlined that the new obligation could be funded through an industry-wide levy or may just fall to one operator to deliver and cover the costs. However, these details are yet to be ironed out.

As of 4Q15, only 56.1% of all fixed broadband subscriptions were equal to or greater than 30Mbps. In an effort to facilitate further adoption, the first challenge the Irish government needs to overcome involves connecting areas where high-speed networks are not yet in place. The country's €275m NBP should assist with this by guaranteeing a downstream rate of 30Mbps by 2022 as well as a 6Mbps upstream rate, and 99.95% uptime. However, since being announced in 2012, the project has faced some delays. Therefore, the government should focus on moving forward quickly with the NBP to prevent the USO facing similar delays. Encouragingly, five prospective providers have now bid to install the infrastructure for the NBP. They are expected to be shortlisted by July 2016, before the final contract is awarded by June 2017.

This is not the first time that the subject of an improved USO for broadband has been approached in Ireland. However, following previous consultations, the regulator ComReg concluded that introducing a target before the NBP contractual arrangements were clarified would be premature and unnecessary. Now that the government has decided to restart discussions and also raise the topic at the EU level, ComReg will look to reassess the viability of a 30Mbps USO.

Only a few European countries have included broadband in a universal service program so far, despite the growing data demands of consumers. At the time of writing, Malta offered the highest broadband USO target, with a guaranteed network speed of 4Mbps. This is far off from the Irish or even the UK proposals; however, several other countries still demand only 1–2Mbps. When compared to the rest of Europe then, the Irish proposal of 30Mbps seems very ambitious and puts the country far ahead of the other EU28 countries. To ensure that Europe's networks are capable of supporting requirements long into the future, governments in other countries are likely to consider introducing a similar obligation.

Appendix

Further reading

Ireland (Country Regulation Overview), TE0007-000988 (February 2016)

"Now is the time to introduce a more ambitious USO for broadband," TE0007-000957 (November 2015)

Author

Sarah McBride, Analyst, Regulation

sarah.mcbride@ovum.com

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