£150m in State aid for Net access project

In an initiative worth two and a half times the Government's contribution to the Global Crossing transatlantic cable project, more than £150 million (€190 million) of public funds are to be allocated towards the provision of high-speed Internet access to rural, remote and island areas and to schools and other public bodies.

The Minister for Public Enterprise, Ms O'Rourke, will request proposals tomorrow for the two projects, which are expected to attract another £350 million in private funding.

The initiatives are intended to encourage the growth of e-commerce and bring online socially excluded groups in poorly serviced areas of the State. Private companies tendering for projects will be required to tie in a public service, regional development or social inclusion element.

The primary project, an "E-commerce and Advanced Communications Systems Measure", will receive £150 million, equally split between Exchequer funds and European Rural Development funds. The project will encourage companies to build out rural broadband (high-speed, high bandwidth) networks, and is expected to add up to 150,000 "fibre kilometres" to the State's fibre-optic network (because many individual fibres comprise a fibre-optic cable, a kilometre of cable equals several fibre kilometres).

In comparison, an initial rural network development initiative last year, linked to the Global Crossing project, received £20 million in joint State/EU funding and resulted in the installation of 20,000 fibre kilometres. The second, smaller project will fund a pilot programme for satellite-based broadband connections, or VSAT (very small aperture satellite terminals). The Government will commit about £1 million from the Taoiseach's Information Society Development Fund - partially made up of monies from the sale of Eircom - towards an expected total of £5 million. While the technology is not new, it has yet to be rolled out commercially in the Republic, but is in use in the US and Britain.

VSAT is seen as complementary to other broadband options and in particular, could be used to provide up to two-megabit connections to the islands, Gaeltacht regions, schools and rural areas that otherwise would have to wait much longer for fibre connections.

A Government spokesman said contracts for the VSAT proposal could be agreed by autumn and deliver service early next year. The fibre cable project will take longer, with up to a two-year wait for delivery of service.