National Broadband Plan to go ahead as report clears Naughten and McCourt

27 Nov 2018

Former Comms Minister Denis Naughten, TD. Image: John Kennedy

Minister Bruton says Government is committed to bringing broadband to more than 540,000 premises in rural Ireland.

The much anticipated report by management consultant Peter Smyth has cleared former Communications Minister Denis Naughten, TD, and Granahan McCourt CEO David C McCourt of tainting the National Broadband Plan (NBP).

Smyth was appointed by An Taoiseach Leo Varadkar, TD, to audit the procurement process for the NBP following the resignation of Naughten in October after opposition TDs expressed alarm over meetings between McCourt and Naughten, fearing the procurement process had been affected.

‘The Government is absolutely committed to reaching the 540,000 premises which will not be reached by commercial operators’

Smyth, in his findings, said that the meetings between the former Minister and the head of the final consortium shortlisted for the lucrative €1bn plan gave reasonable cause for concern because they took place “outside of any formal need for them to engage with each other in the normal course of the Department’s business”.

In all, it details 40 meetings between Naughten and the various consortia bidding for the NBP, including 12 meetings between the former Minister and McCourt.

Smyth concluded that there was no evidence that the process was tainted by these meetings or that any sensitive information the Minister was privy to that would be beneficial to the final bidder was given.

“I am satisfied that neither the former Minister nor McCourt had the opportunity to influence the conduct of the tender process in favour of Granahan McCourt or otherwise,” Smyth said.

“I also believe that the decision of the former Minister to resign, thereby removing himself from the process, insulates the process from any apparent bias created by his engagements with McCourt.”

Communications Minister Richard Bruton, TD, said the Government accepted the findings of the audit. “Based on the consideration of these four elements, the independent assessor was satisfied that neither the former Minister Denis Naughten nor Mr McCourt sought to influence the conduct of the tender process in favour of Granahan McCourt or otherwise.”

National Broadband Plan to continue

Bruton said that the Government remains “absolutely committed” to reaching the more than 540,000 premises that need intervention, and that the final bid by the preferred bidder consortium led by Granahan McCourt is still being considered.

“The expert procurement team managing the NBP procurement process in my Department has been engaged in the evaluation of the final tender received on the 18th of September from the remaining bidder, Granahan McCourt. This will lead to a recommendation to Government as to whether or not to appoint the Granahan McCourt-led consortium as preferred bidder in the National Broadband Plan State-led intervention procurement process, having regard to matters including the maximum subsidy required,” said Bruton.

“Since my appointment, my priority has been to bring this process to a fair and impartial conclusion as quickly as possible.

“The Government is committed to providing high-speed [broadband] to rural Ireland. When this Government came into office in 2016, 1.2m (52pc) had access to high-speed broadband. Today, 1.7m (74pc) of premises can access this service. The Government is absolutely committed to reaching the 540,000 premises which will not be reached by commercial operators,” Bruton said.

Timeline of Naughten’s meetings with McCourt

Man with black glasses wearing suit and tie standing against stone pillars.

David C McCourt, US telecoms veteran and CEO of Granahan McCourt. Image: Enet

Smyth reported that Naughten attended 40 meetings with representatives or members of the various consortia bidding for the NBP.

Out of these, Naughten held 18 meetings with the Granahan McCourt consortium (including four with SSE up until 28 July 2018, when SSE exited the process); 10 with Vodafone-ESB joint venture Siro (up until 25 December 2017, when Siro exited the process); seven meetings with Eir (up until 30 January 2018, when Eir exited the process); one meeting with NJJ (which acquired a majority stake in Eir); and four meetings with the Telecommunications and Internet Federation.

The report details 12 meetings that Naughten would have had with McCourt between 20 October 2016 and 8 August 2018, including at least two public events. Smyth reported that at least three meetings and one phone call were held between Naughten and McCourt in the context of the NBP, including a coffee meeting on 31 January 2018 (following Eir’s departure from the NBP), a pre-sponsors meeting on 26 June 2018, a sponsors meeting on 26 June 2018 and a phone call with McCourt on 8 August 2018.

Naughten also had a meeting with McCourt in New York on 16 July 2018, at which “the State-led intervention under the NBP was addressed briefly”.

Five meetings were held between Naughten and McCourt in the broader context of Enet and SSE’s activities in Ireland, including an introductory meeting on 20 October 2016; a dinner with McCourt and Minister Pat Breen, TD, on 16 September 2017 in Clare; a dinner in Dublin on 28 February 2018; a short dinner in the Merrion Hotel on 27 March 2018 (to discuss ALTV and the use of the Box in Trinity College to train Syrian refugees); and a 16 April 2018 dinner with McCourt.

Smyth said that 22 of the 40 meetings Naughten was present at are supported by formal minutes. A further 42 meetings between staff of the Department of Communications and the various bidders are also supported by minutes and meeting notes.

Updated, 2.53pm, 27 November 2018: This article was amended to clarify that the first reported meeting between Naughten and McCourt took place on 20 October 2016, not 10 October 2016.

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