State’s intervention in broadband gets serious bandwidth

Dropped into the announcement on Tuesday about the State’s rural broadband network being privatised was news that the scheme had been expanded to include an additional 170,000 homes.

Minister for Communications Denis Naughten said the extension was necessary to cover "commercial telecoms investment which had not materialised".

Publicly the department acknowledges the difficulties confronted by providers, privately it is said to be exasperated.

The crux of the issue lies in the difference between “premises passed” by the new fibre technologies, the phrase industry uses, and those that can be connected to it, the threshold the Government insists upon.

Most new fibre technologies are only run to a cabinet at street level and not all homes can be hooked up without particular infrastructural enhancements - a legacy of the State’s dubious planning laws.

Equally, some of those houses that can be connected get only sub-standard broadband speeds because of the poor condition of the copper network that connects them to the cabinet.

While providers have pledged to return and beef up these connections, the Government is obviously not getting the assurances it needs.

Either way, we now have a proposed intervention footprint covering 927,000 homes, nearly half the State’s housing stock, making the National Broadband Plan one of the biggest state interventions in any telecoms market anywhere in the world.

If the Government had opted to keep the infrastructure in State hands, you might have been fooled into thinking it was trying to renationalise the market, which has undoubtedly suffered from the way Telecom Éireann was first privatised in the late 1990s and then broken apart.

The ease with which Minister Naughten threw another 170,000 homes into the pot undoubtedly reflects the private ownership model chosen by Government which places the financial burden clearly on industry.

He claimed it would reduce the cost to the State by up to 70 per cent over the 25-year lifetime of the contract, though we’ve no way of confirming this.

The winning bidder or bidders, which will come from either Eir, Siro or E-net, will own a vital piece of state infrastructure for better or for worse.