National Broadband Plan: Everything you need to know

What is happening with the plan and what are the other concerns?

Denis Naughten: An independent audit found the National Broadband Plan has not been fatally undermined by private meetings the former minister for communications  had with the sole remaining bidder. Photograph: Cyril Byrne

Denis Naughten: An independent audit found the National Broadband Plan has not been fatally undermined by private meetings the former minister for communications had with the sole remaining bidder. Photograph: Cyril Byrne

 

What is happening with the National Broadband Plan (NBP)?
It hasn’t been abandoned, that’s what. An independent audit of the process has found that it has not been fatally undermined by private meetings the former minister for communications Denis Naughten had with David McCourt, the Irish-American businessman who is leading the sole remaining bidder for the contract. That report has not been published yet, but reports say it has given the process the go-ahead. It’s expected the full report will be published later this week or early next week.

So what happens now?
The tender for the project, submitted by the group led by McCourt, is being assessed by officials in the Department of Communications, Climate Action and Environment. It is reportedly 20,000 pages long and the assessment process involves examination by legal and technical experts. The Government expects to be in a position to make a decision on the awarding of the contract within a few weeks.

Who are the other bidders?
There aren’t any.

Really?
Other bidders, including telecoms company Eir and a consortium involving the ESB, all dropped out, leaving McCourt’s bid as the only one.

If there’s only one bidder, isn’t that likely to push up the price?
This is one of the fears – though there are others – in Government. The original estimates for the cost to the exchequer of the programme were in the region of €500 million. However, Government sources have told The Irish Times that the estimated costs for the project have ballooned – with some fearing the final cost could be as high as €3 billion. This has caused alarm in the Department of Finance, whose job it is to be alarmed about these things. These estimates have been disputed by industry figures, but they are the sort of sums that have featured in discussions on the broadband plan in Government.

Is that for the entire country?
No. Most of the country is covered – or will be covered – by commercial operators. The National Broadband Plan is just for remote and rural areas that the commercial telcos won’t touch because they can’t make them pay. So the State has promised to step in and provide high-speed fibre-optic broadband for the remainder of the homes and premises in the country. There are about 540,000 homes and premises covered by the NBP.

What are the other concerns?
There are two principal ones. The first is that the take-up of broadband services when the network is built is highly uncertain. Many of the 540,000 houses desperately want broadband. But some of the houses are holiday homes. Some of them are unoccupied. Some of them are home to people who aren’t that interested in having broadband. Government sources point to the example of Eir, which has offered, it says, broadband to 200,000 rural homes so far. The take-up is about 14 per cent. Broadband campaigners say that the Eir service isn’t actually available for everyone, but even still, the take-up is pretty low. Some people in Government are worried that they are going to build this network at great expense and only a minority of people will use it. The second issue is the ownership of the network once it is built. Although the State will have paid for it, the actual network – the pipes and wires, etc – will be owned by the company that builds it.

Will the Government swallow its reservations?
It will have to decide in the coming weeks, once the legal and technical evaluation of the bid is completed by the Department of Communications. It is not obliged to accept the bid, but refusing it would mean the entire project goes back to square one. That would be a huge embarrassment to the Government, and a political hit in rural areas. The choice is between making a decision that many in Government to be financially unwise, and one that is politically unwise.

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