Tony Killeen (Clare, Fianna Fail)

I would prefer to engage with the points made by Senators Ross and O'Toole but it would be more informative if I deliver the script that sets out the current position.

A world-class electronic communications sector is critical to our continued economic and social prosperity. As an economy we need to ensure we take full advantage of these technological developments to remain competitive. As a society we need to ensure we do not allow the creation of a digital divide, either socially or regionally.

The provision of broadband services is a major priority for the Government. In this context, the primary role of the Government is to formulate regulatory and infrastructure policies to facilitate the provision of high quality telecommunications services by competing private sector service providers. The broadband market in Ireland is fully liberalised and regulated, where appropriate, by ComReg, the independent Commission for Communications Regulation.

Ireland's growth in broadband penetration has continued to improve during 2007. Today, there are almost 20 service providers in Ireland offering products to more than 85% of the population through a combination of DSL, fixed wireless, cable, fibre optic, and mobile technologies. As a result the average cost of broadband continues to fall. According to the latest figures from ComReg at the end of the second quarter of 2007, there were 698,000 broadband subscribers in Ireland. I am hopeful this exceptional growth has been maintained into the next quarter and I would anticipate that the number of subscribers at the end of the third quarter will be closer to the 800,000 mark, equivalent to approximately 18% of the population.

To put this in context, at the start of 2005 only 3% of population were broadband subscribers and the figure stood at 7% at the start of 2006. To achieve 18% by end 2007 is significant progress by any measure. Recent statistics from the OECD, from October 2007, show that we have the strongest per capita subscriber growth in the OECD. This means Ireland is catching up with other regions despite the relatively late launch of affordable and competitive broadband services in Ireland in the early 2000s. Moreover, Ireland has narrowed the gap behind the EU average. At the end of the second quarter of 2006 the EU 25 average was 14 subscribers per 100 of population and our rate was eight subscribers per 100. At the end of the second quarter of 2007, the EU 25 average was 18.2 subscribers per 100 of population and our rate was 15.4.

This growth in broadband has been facilitated by the regulatory regime the Government has put in place. The powers of ComReg have been substantially strengthened by the enactment in April of the Communications Regulation (Amendment) Act, 2007. The Act provides for the creation of new summary, indictable and continuing offences for breaches by operators of obligations imposed by ComReg. The Act also confers competition law powers on ComReg, similar to those of the Competition Authority, that allow it to investigate and prosecute anti-competitive behaviour or abuse of dominance in the electronic communications sector.

Local loop unbundling is a key requirement to stimulate more competition in Ireland's broadband market and to increase broadband take-up. Experience in other countries suggests that unbundling is a key stimulant of broadband innovation and take up. To date the benefits of local loop unbundling have not been felt in Ireland to the desired extent because of delays in the implementation of a variety of product requirements. Following interventions by ComReg with Eircom, and discussions between industry, ComReg and Eircom beginning in May 2007, Eircom committed to resolving all of the identified issues. Accordingly, a new iteration of unbundling was launched in September. There are now no material issues remaining that impair the use of this product and it is up to the industry to avail of unbundling.

The State has undertaken initiatives to address the gaps in broadband coverage where the market has clearly failed. Direct funding has been already provided under the national development plan for the provision of backbone infrastructure and to upgrade local access infrastructure. Also, in partnership with local and regional authorities, the Government is continuing to fund the construction of high speed, open access metropolitan area networks in towns and cities nationwide. These wholesale networks enable private sector operators to offer world class broadband services at competitive costs.

The Department also offers funding assistance for smaller towns and rural communities through the group broadband scheme. The scheme, which is technology-neutral, subsidised the implementation of 127 projects in rural areas. This range of small to medium sized service providers has supported competition using a range of different technologies. In addition, these service providers have made use of the private and State owned regional backhaul links. These infrastructure interventions have helped grow competition in the regions by facilitating the introduction of new service providers to areas where none existed a couple of years ago.

There are still, however, some parts of the country where the private sector will be unable to justify the commercial provision of broadband services. The failure of the market to bridge the digital divide in specific rural areas will be addressed through the Department's national broadband scheme, which will provide broadband services to areas that are not currently served and ensure all reasonable requests for broadband in such areas are met. The first phase of the procurement process for the scheme, the pre-qualification questionnaire phase, is now complete and four candidates have qualified. As the Department indicated on 2 September 2007, the four candidates are, in alphabetical order, BT Communications Ireland Limited Consortium, Eircom Limited, Hutchinson 3G Ireland Limited and IFA/Motorola Consortium.

The next phase of the procurement process involves inviting candidates to participate in a competitive dialogue process. The Department is anticipating that the national broadband scheme contract will be awarded in the second quarter of 2008, with roll-out of services as soon as possible thereafter. The broadband product to be provided under the national broadband scheme will be broadly equivalent to the tariffs and products typically available on the Irish market. The most appropriate mechanism to achieve this aim will be decided during the competitive dialogue process.

The issue of broadband availability is now close to resolution. We must now turn our attention to the new challenges facing the market, such as improving quality and speed and further reducing costs of broadband access. We must ensure that Ireland's consumers have available the most up to date and innovative products and services that are available online. For example, as Internet content and services improve, higher connectivity speeds are needed to benefit from the activities available on-line, such as, voice over Internet, video on demand, shopping and e-mailing family photo albums across the world in real time. The increasing volume of digital data being carried on existing networks means higher bandwidth will be required in the future.

A major challenge facing the sector is the evolution of next generation broadband. Supply must be just ahead of demand and the Department's policies will encourage and facilitate this. This is not an exact science and making predictions in the technology space is difficult. Other countries are facing the same challenges and questions as we are and, while we can look to some for lessons such as the use of ducting in facilitating broadband roll-out, we must be innovative and creative and avail of the opportunities provided by the move to next generation networks.

The Department is preparing a draft policy paper on next generation broadband, which will review current communications infrastructure policy and analyse future policy options in light of industry developments. This will give guidance in respect of the optimum future role for Government in the planning and roll-out of broadband. The Minister intends to establish a national advisory forum of experts to evaluate critically the policy options contained in the draft paper. Following that, he plans to publish the paper early next year and we would welcome views in respect of it. He expects it will be a guide on Government thinking on next generation broadband and where we see ourselves in this space.

We need to position Ireland so that it can remain at the forefront as an alternative destination for inward investment. Next generation broadband will be a critical element in our continuing efforts to do that. We must anticipate consumer needs, especially those of the enterprise sector, by providing the products and services integral to a knowledge economy. Broadband has the potential to bring about profound changes in our society and to help tackle the challenge of moving to a more sustainable world. We are well positioned to make this transition work for us. The move to next generation broadband provides us with a great opportunity to innovate. Perhaps the best way to predict the future is to invent it.