Q&A: What is the broadband plan and what happens next?

What is the National Broadband Plan?

The National Broadband Plan (NBP) is the Government's long-standing plan to address the lack of broadband coverage in rural Ireland. Thousands of Irish homes and businesses are located in so-called broadband black spots, which cover a whopping 80 per cent of the Republic's land mass.

This has resulted in a digital divide and a two-tier economy, which the Government has pledged to address.

The plan is to subsidise the building of a network that would connect more than 540,000 rural homes and businesses to superfast broadband.

It’s a big undertaking, often likened to the electrification projects of the 1930s and 1940s.

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So what’s the problem?

The process has been dogged by delays and controversies from the start. It has also been shunned by most of the industry players here, raising questions about the Government’s procurement process.

There was ultimately only one bidder in what was meant to be a competitive tender – and the feasibility of the project itself.

But worst of all, the cost of the scheme has ballooned to nearly €3 billion, six times the original estimate.

Secretary General of the Department of Public Expenditure and Reform Robert Watt and his officials have strongly recommended against approving it on the grounds that it no longer represents value for money for the taxpayer.

The Government, however, is determined to push ahead, fearful of the potential backlash of turning back at this late stage.

What has just happened? 

Minister for Communications Richard Bruton received Cabinet approval to sign off on the plan and award the contract to preferred bidder, Granahan McCourt, which is fronting the National Broadband Ireland (NBI) consortium. The contract with the McCourt consortium runs to more than 1,500 pages and is due to be signed. The contract will be published after it is signed.

What happens next?

Work on the project is expected to commence next year and take up to seven years to complete, although the majority of homes with be “passed” – ie have access to the network and the choice of connecting to it – within the first three years.

The majority of premises will get fibre broadband, but up to 5 per cent located in the most remote areas will have wireless connection. Of these, 130,000 connections will be made in the first two years with between 70,000 and 100,000 properties getting access per year thereafter.

Legal challenge?

Waiting in the wings is a group of independent broadband operators that are threatening to mount a legal challenge against the project on the basis that it contravenes EU state aid rules. The current EU state aid rules restrict governments from funding services where they are offered commercially by private operators.

Wireless internet providers claim they can cover up to 137,000 premises currently included in the NBP and claim they will be forced out of business by the scheme.

However the scheme has now received sanction from Brussels.