I welcome the opportunity to speak on this Bill and that is has finally come before the House. Its purpose is to place the development company for the digital hub, Digital Media Development Limited, on a statutory basis and rename it as the Digital Hub Development Agency.
The digital hub refers to an area in Thomas Street in Dublin. The intention of the initial project was to cluster together Irish and international media companies, research and development companies and educational initiatives. This is a concept I welcome. It is creating a digital quarter in our capital city and it sends out a message to the public and, more importantly, to potential investors that the digital media business in Dublin is taken seriously by the Government and by Dublin city. It could be described as a flagship project to highlight our intention to keep Ireland as an attractive destination to attract investment in IT, software development and digital media.
While I welcome this Bill it is important to note that this is it only one, admittedly not insignificant, project nationally. It should be used as a template for other towns and cities across the country if we are serious about digital media development on a national basis and, more importantly, if we are serious about decentralisation outside Dublin. Digital media and information technology generally have the luxury, if the required infrastructure is in place, of not being located by necessity in the capital city or other major urban areas. By and large, their products can be sent and sold through a telecommunications infrastructure, if it is in place.
Before I speak generally about the Bill and other digital media issues nationally, I wish to refer to an article in today's Irish Independent about which anyone interested in the digital hub concept and the Bill will be concerned. The headline states: “Digital Hub battles cash flow problems”. It outlines the history of the digital hub, which is positive in many ways. The hub was established in 2001 with the intention and clear target of attracting 700 companies to employ up to 30,000 people, including residents and students, to produce products such as games, software and supports to the music and film industry, and it was to be developed through a public private partnership, a concept that appears to be questioned at some levels of Government. Some €130 million has been spent to date and six companies employing about 100 people have moved into offices in recent weeks. This is a welcome development. The Bill is to place the DMDL on a State agency footing to give it an increased ability to raise loans up to €10 million to finance its further development.
The article points out that the Minister, Deputy Dermot Ahern, said in the Seanad when introducing the Bill that the agency, as a commercial body, would be obliged to obtain its revenue from its own activities in future, despite that some support revenue clearly came from Government. Since its inception, the DMDL was promised operational support from the Government, and rightly so. The Government should be strongly supportive of the project. Some €2.5 million was promised in 2001, €2 million in 2002 and a further €2.3 million is promised for this year to ensure the future development of the digital hub.
However, through documents obtained under the Freedom of Information Act, we see that the digital hub has had serious cash flow problems since September 2002. The article states:
Documents obtained under the Freedom of Information Act 1997 show that the Digital Hub ran into considerable cash flow problems in September 2002. A letter from the Digital Hub's executive services team director . . . to . . . an assistant secretary at the Department of Communications, Marine and Natural Resources, confirmed "that Digital Media Development has been experiencing significant cash flow difficulties over recent weeks and is now in breach of the Prompt Payments Act, 1997". The communication claimed that the agency had not received a drawdown of its quarterly budget for July to September 2002 and requested more funds to pay suppliers, lawyers and equipment. It is understood that a process was put in train to provide DMDL with the drawdown of funds.
However, going into 2003, DMDL was warned that for its allocation of funds for 2003 it must not enter into contracts that would exceed its allocation [and rightly so].
In the subsequent weeks, the department point out that the DMDL had already overrun its annual operational spend sanctioned by the department for a three-year period. On 7 October, a communication . . . pointed out that DMDL had a €500k budget surplus that must be surrendered. It stated: "The Department of Finance takes the view that the surplus of €500k from last year plus the €1.5m already issued this year fully satisfies DMDL operational funding requirements for 2002. On this basis, the Department of Finance has advised that the remaining drawdown of €500k in respect of 2002 from this department to DMDL is not to be made."
"This means that the drawdown of €500k, which has recently been made, represents the final allocation of operational funding for DMDL for this year,".
I could go on but it is difficult to follow the detail of the article because it is complicated. The bottom line is that there is a serious concern about cash flow problems and there appears to be some uncertainty as to what money is available from Government. It appears that the DMDL made a conscious decision to roll over some of last year's funds into this year to pay expenses at the beginning of this year and, as a result, the Department of Finance is interpreting that as being that the DMDL did not use its allocation last year and therefore will not give it the full allocation promised for this year.
We need clarity on this, as does the digital hub. We are talking about significant sums of money –€500,000 is the sum about which there is uncertainty. Will the Minister of State outline clearly the position of the Department of Finance on the funding for 2002 and its implications for funding for 2003? This would give us a clear position of where the digital hub stands financially.
I wish to make some general comments about digital media nationally and the infrastructure that needs to be put in place to allow that to happen. It is a responsibility on us in this discussion to include the issue of where we stand at present regarding national telecommunications infrastructure. Clearly, the concept of the digital hub should not remain in Dublin.
It is fair to say that we have achieved high standards in some parts of Dublin in connectivity and telecommunications infrastructure. For example, the connectivity and services provided in City West are excellent and that is reflected in the number of companies that have moved there and flourished. However, the fact that it takes longer for an e-mail to go from Cork to Dublin than it does from CityWest to New York makes one realise the inadequacy of the national infrastructure and the connectivity from the regions to international destinations.
Let us examine the facts established by independent monitors of Ireland's performance in the availability of broadband access. In a recent World Economic Forum examination of world competitiveness for 2002 to 2003, Ireland ranks 51st in the nations examined. As I pointed out before when questioning the Minister with responsibility for e-government, we are behind countries such as Panama, Estonia, Chile, El Salvador, Romania, Argentina, the Czech Republic, Venezuela, Latvia, Brazil, Turkey, Costa Rica, Guatemala, Peru and Slovenia. As one might expect from that list, we are also behind all our EU counterparts. For a country that makes the proud claim to be the largest exporter of software in the world and that is a platform for American IT multinationals to sell their products into Europe, we have failed abysmally to put in place the necessary, as opposed to the desired, telecommunications infrastructure to allow this industry to continue to flourish and to encourage further investment into the country. It is to our shame that this list is available internationally and that people read it in magazines such as The Economist, Time, etc.
In case anyone feels that report treats Ireland unfairly, we should consider some other international reports. In the Economist Intelligence Unit's e-readiness ranking, which measures where a country is in relation to Internet opportunities, we rank 15th in the world behind America, the Netherlands, Britain, Switzerland, Sweden, Austria, Denmark, Germany, Canada, Finland, Singapore, etc. For a country that claims to be electronically competitive, we are far down the list.
An interesting article in The Irish Times in 2001 pointed out that a digital divide has emerged on class lines with a failure to develop a proper digital television service, preventing lower income groups from gaining access to e-mail and the Internet. Geographically the divide shows that high-technology is racing ahead in Dublin far quicker than elsewhere in the country. Although I welcome it, the digital hub is contributing to that problem. Some 19 Internet data centres were due to be completed in Dublin in 2003, but the total for the rest of the country is two. When converted to a priority ranking on a ratio basis it can be seen how miserably the rest of the country is treated for rollout of infrastructure and Internet readiness.
Despite having gone through a period of stability and prosperity, the Government has seriously neglected its responsibilities to put in place the necessary infrastructure to encourage inward investment and allow existing industry to grow and prosper at the same time as an international downturn in IT activity. Unfortunately this is resulting in Ireland becoming quite uncompetitive as a location for investment by major IT companies, which have contributed hugely to our economy.
There is also evidence from the business sectors. People from companies such as Apple, Iona Technologies – Chris Horne is very outspoken in this area – Microsoft, Dell and others are demanding the infrastructure they need to continue to expand their employment in Ireland and they want to stay here. Ireland is an attractive location on many grounds. We speak English and provide a good well educated workforce. However the key issue is infrastructure for which the Government has primary responsibility. Services that were provided in competing countries up to five years ago are only now being talked about here. Later I will deal with the small progress we have made, which is important to recognise.
The recent report of the Information Society Commission, which was established by the Government as an independent advisory body, points out starkly that broadband telecommunications infrastructure is increasingly seen as having an importance in the 21st century that will parallel that of electricity in the 20th century and railroads in the 19th century. That is a strong statement that needs to be taken on board.
Representatives from users' organisations have also made their views quite clear. Bodies such as Ireland Offline are conducting a continual campaign to improve service provision, infrastructure and connectivity. The consequence of not responding to these calls from the industry, users and independent groups established to advise the Government will be far more dramatic than many people realise. Many people see the IT industry as a niche industry. If we proceed as we should, it will have very positive implications as well as continuing to promote Ireland as a location for software development and IT investment.
To be fair to the Government there are a number of areas where it seems to have made some progress, which needs to continue. I welcome the fact that the Minister has recently established a strategy group to continually update him on the issues and what is required. However, I have some concerns that the group is not fully representative. It comprises users, consumers and small and medium enterprises, but not ComReg. If the regulator – or the enforcer as it will need to become – is not in the group it is difficult to come forward with credible recommendations. The Minister should reconsider the bodies on that group with a view to including the regulator or a representative from ComReg. It is imperative that she and her team be apprised of the recommendations that are being formulated and made. I would like the Minister to respond to that at the end of this debate.
I welcome Eircom's recent announcements. ComReg is beginning to show its teeth, which is positive. To be fair to the Minister that is partly due to his having given clear directives and made known his targets for new service provision. Eircom has realised that its monopoly in the market will not last forever and it will be forced to share its infrastructure, which has been such a problem over the past five years. Up to the last six months the Government failed miserably to tackle that problem. I recognise that progress has been made, albeit late.
There are three key issues for the consumer and small businesses relating to the provision of services. They need access, a choice of service provider and a choice of pricing. I urge the Minister and his Department to insist on a timetable for the provision of wholesale prices by Eircom, which it is required to provide under law and which ComReg has a responsibility to enforce. The Minister must drive this politically. Without wholesale prices for the use of the Eircom infrastructure we will never have competition in the market or service choice. This does not only relate to a flat rate always-on service, but also to a wide range of services. That must happen and the Minister must drive it. If he does not do so, it is less likely to happen.
Let us assume small and medium size enterprises have access and connectivity. They need a service with continuous access which must be priced on a flat rate basis. Let us take auctioneers as an example. Many auctioneers are connected to the Internet and send e-mails on a regular basis. They have real difficulty in calculating and measuring how much a connection to the Internet will cost on a monthly basis. Auctioneers need the financial certainty provided by what has become a necessary tool, namely flat rate charging. These rates should be competitive in comparison with other countries, particularly our prime competitor, the United Kingdom, and the United States. Our target should be to provide flat rate, continuous Internet access at a cost of between €30 and €40 per month.
I welcome the decision by the Minister for Communications, Marine and Natural Resources, Deputy Dermot Ahern, to direct the Commission for Communications Regulation to insist on the provision of continuous access and flat rate pricing, both of which are key requirements. Flat rate pricing, whether for analogue or DSL and broadband lines, is almost as important as continuous Internet access. When parents know how much Internet use will cost them, many more families and small businesses will routinely access and use the worldwide web because uncertainty about costs will no longer be a concern.
The Minister is well aware of the need for flat rates. Rumour has it that June is the deadline by which a retail service providing continuous, flat rate Internet access must be in operation. Is this the case? If so, is it on schedule? Does the Minister intend to drive this issue forward politically to make sure the infrastructure required to offer customers this service is in place by June?
This brings me to the wider question of infrastructure. There is an emerging view that it will be impossible in the short-term to link up every house and small business to a DSL or broadband line, unless we take current wireless technology much more seriously. While I welcome the wireless LAN project to which the Minister of State referred, it is a miserable contribution by Government to an area that warrants much greater priority. The wireless LAN project allocates €260,000 to pilot projects around the country. Of the 29 applicants for Government support to proceed with wireless pilot projects, six received funding amounting to €260,000. While I am open to correction if significantly more money is being invested in this area, the information available to me indicates the pilot projects being funded by the Government have been allocated a total of €260,000. I am glad to see the Minister of State shaking his head. I hope it signals my figure is wrong. If this is the case, it is a miserable allocation of funds.
Experience from regions similar to us around the world shows that the only way we will be able to provide households and small businesses in rural areas with broadband services is to do so in a wireless form. The Government needs to show real leadership in this context and invest significant moneys in research and development, promotion and incentives for private investment in wireless technologies. Let us get moving. If I hear fibre rings mentioned again, I will—