Biggest state broadband intervention in Irish history begins

22 Dec 2015

It covers 96pc of Ireland’s national land mass, 100,000km of road networks, 1.8m citizens and some 750,000 postal addresses.

Ireland’s ambitious intervention strategy to ensure the final 750,000 homes and businesses deprived of broadband are finally connected with at least 30Mbps kicks off today with a formal procurement process.

The plan – priced at between €300m to €500m – is being spearheaded by Communications Minister Alex White TD and will fund operators to compete to deliver a guaranteed minimum of 30Mbps download speeds and 6Mbps upload speeds with 99.95pc uptime.

‘This is the largest and most significant broadband intervention in the country’

So far, some €275m worth of state aid has been approved by the Irish Government’s cabinet and the EU to enable the plan, seen by many in Europe as visionary and pioneering.

It covers 96pc of Ireland’s national land mass, 100,000km of road networks, 1.8m citizens and some 750,000 postal addresses.

A defining moment in Irish telecoms history

“This is a defining moment for the project,” said Minister White yesterday (21 December). “This is the largest and most significant broadband intervention in the country.”

From today, a tender will be published on the Irish State procurement site eTenders, as well as the European Official Journal, inviting players to submit bids for the project.

Formal dialogue will take place between March and April and final contracts will be awarded in Q4 2016 with a view to seeing the first broadband-deprived homes connected before the end of the year.

By 2018, 85pc of the homes and businesses targeted in the plan will be connected, with the last premises to be connected by 2020.

The Department of Communications published its first broadband map in 2014 to indicate areas deemed commercially unviable by telecoms operators that it would ensure get connected. This was followed up by a formal draft intervention strategy in July this year.

New network could be a powerful economic asset over time

Minister White said that since then there have been hundreds of meetings with stakeholders.

He said that there is an initial €275m in stimulus funding available to kick-start the plan with further tranches coming on stream if and when required over the lifetime of the contracts with the Government.

The updated plan divides the country into two areas – north and south, with the same population geographical reach challenges – so that one or potentially two bidders may successfully win the contract.

Other changes to the plan since the draft was published in July include the length of the contract or contracts, which have increased from 20 to 25 years.

Minister White also said that a final decision has to be made over ownership of the final network or networks after 25 years as they could by that stage have developed into a valuable economic asset.

There are two models to consider: a gap funded/commercial stimulus model whereby the company that built and ran the network retains ownership; or a full concessionaire model where the assets revert back to state ownership after 25 years.

Companies that have expressed a potential interest in building the network include Eir, Virgin Media, SIRO (the ESB/Vodafone joint venture), BT, E-net, Gigabit Fibre, Three, Imagine and Axione, a French company that has won 16 similar projects in France and a subsidiary of French energy giant Bouygues.

White said that the final network will be a key strategic asset and the successful bidder or bidders will be required to ensure wholesale and open access to the network for the more than 50 or so internet service providers active in the Irish market.

The plan also includes clauses to ensure that the Irish exchequer gets to share in any savings so the State doesn’t lose out.

Failure to meet contractual agreements, broadband quality standards or targets will result in state aid being withheld.

A spokesperson for the Department of Communications said that, based on submissions so far, no company has satisfied all the criteria or has signed a commitment agreement.

Stringent requirements leave no stone unturned

White said that from a legal point of view everything has been considered.

“We have to do what’s right for people, industry and citizens. We have a duty, where investment plans are promised, to do everything in our power to ensure those investment plans materialise. We take this very seriously.

“Everything in the plan, including the timelines, is to a very high standard. There will be no cutting of tapes or marching bands, we have done what we said we would do in a year and a half.”

‘This is the biggest broadband intervention in the history of the State. We can’t even leave a few people behind’

Minister White said the plan is designed to proceed regardless of the national elections next year.

“Even if this doesn’t align with the political cycle, I am certain that the input, the high level of excellence of the officials and advisers will deliver a product and network for the people.

“This will be manifest in the benefits rural and urban, for schools and businesses, culturally and economically.”

A spokesperson for the Department of Communications said that the entire procurement process has been designed to be flexible, with all options presented by the bidders to be taken into account.

The spokesperson said that there is no scope for operators to blindside them with technicalities or row back on commitments after contracts have been signed. Nothing has been left to chance.

“We have considered all angles and have spoken with various network specialists about the various options and we are confident that it is possible to do this on time and within budget.”

The spokesperson added that the 30Mbps minimum speed is a guide and that decisions will be weighted in favour of bid proposals that can future-proof the network to go beyond this and enable rural communities to march in step with urban communities in terms of speed and broadband quality.

The spokesperson added that the mapping exercise measured every home and business and said that a small 1pc to 2pc of premises may struggle to get connectivity and that aspect of a bidder’s proposal will also be considered.

“This is the biggest broadband intervention in the history of the State. We can’t even leave a few people behind.”

Connection to broadband is considered increasingly a human right in terms of the economic and social benefits it brings – from finding work to building businesses and gaining education – and, as such, currently 600,000 homes and 100,000 businesses are on the wrong side of Ireland’s digital divide.

A spokesperson for the Department of Communications nailed it: “What will be the cost to the State of not doing this?”

Roadside in Kerry image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years