The Catholic Church, it is said in an almost intimidatory way, thinks in centuries. That sweeping perspective is, however, unnecessary in relation to the news that Eir has withdrawn from the National Broadband Plan (NBP). The announcement can’t quite be traced back even two decades.
It has its roots in July 1999 when, in a blaze of marketing and more than a frisson of Government-encouraged public greed dressed as informed investor ambition, Eircom was floated on the Irish, London and New York Stock exchanges.
That privatisation was intended to slay an inefficient, public sector behemoth and replace it with an efficient, customer-orientated telecoms company or companies. State-owned monopolies were pushed onto the red list and market-driven competition was the empowering, freeing philosophy of the moment.
In the interim, the company, or what was left of it, has had many owners who, as short-term investors do, asset stripped with abandon. The company was entangled in almost insurmountable debt. Its broadband service, especially in rural areas but in many suburban areas too, was — and often still is — hopelessly inadequate despite being among the most
expensive in Europe. The company was in a difficult position especially if it was to meet the obligations of the NBP and bring a high-speed service to every townland, no matter how remote or thinly-populate.
It has been suggested that the company’s owner Xavier Niel, the French mogul behind Iliad and NJJ, the companies with a controlling 64.5% in Eircom’s ghost, understood this and cast a cold eye on the challenge. Niel is, apparently, more attracted to establishing networks in areas of high population rather than servicing the snipe-grass parishes of rural Ireland. He concentrates on the best opportunities the market offers and as a private businessman need not unduly fret about those outside his target areas.
That is one aspect of how the market works but the Eir decision brings another into play. The consortium led by energy group SSE and telecoms firm Enet is now the only entity with an interest in the NBP. This singularity strengthens their hand and weakens the Government’s. They move from being price takers to being a price setter and can use the broadband hopes of the 542,000 homeowners as leverage.
If this seems familiar it is because it is — we are back to where we were almost two decades ago dealing with a powerful monopoly except this time around its sole obligation is profit rather than social advancement. It is familiar too as this is the dynamic behind the housing crisis and the neverending distress in our two-tier hospitals. It is behind and the Carillion scandal and the take-it-or-leave-it prices offered to food producers. Our €64bn bank bailout debt has the same pedigree — as have wage stagnation, vanished job security and the destruction of middle-class wealth.
Against this background, Facebook’s last quarter figures — a $4.3bn profit on revenues of €12.7bn — offer a startling contrast and confirms that if we want to avert the chaos of institutionalised inequity we need to develop a new, fairer capitalism. And, worryingly, it may be later than we think.