Saturday 1 October 2016

Telecoms firms face 'moving goalposts' for €275m state broadband tender

Published 03/01/2016 | 02:30

The National Broadband Plan will cost the State an initial €275m, €75m of which is being supplied by the European Regional Development Fund
The National Broadband Plan will cost the State an initial €275m, €75m of which is being supplied by the European Regional Development Fund

Bidders for an upcoming €275m state- funded National Broadband Plan tender have been warned that the contract will be subject to a series of "moving goalposts" if rival underbidders decide to intervene.

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A spokesman for the Department of Communications has said that the 25-year tender contract, which is expected to be published in coming months, will require bidding telecoms operators to accept that large parts of rural Ireland may be withdrawn from coverage by the state scheme in the next two to five years.

The National Broadband Plan is a state-funded scheme to connect 750,000 rural homes and businesses to high-speed broadband services of at least 30Mbs. The scheme will cost the State an initial €275m, €75m of which is being supplied by the European Regional Development Fund.

The Government will shortly offer a tender for the contract rollout, with at least six telecoms firms expressing an interest. The first homes to be connected to the service are expected to come on stream in early 2017.

The Government spokesman said that the Government must abide by EU rules that forbid state institutions from running commercial services in areas where private sector alternatives are available. But he said that the Government cannot "sterilise" a part of rural Ireland from receiving the state-funded broadband service just because telecom operators say they will eventually offer a similar service there in years to come.

"Our process can't stop," said the spokesman for Communications Minister Alex White. "There's always going to be a commercial operator out there who will make some announcement about covering an area of rural Ireland in two or three years.

"Our map will have to just move with the process. It will make life a bit more difficult for bidders, because they might be dealing with moving goalposts. But the bidders are big boys and are fully aware of that and they may have to make their own risk analysis of it.

"They may have to ask themselves: 'If I'm given this area to build, will there be another commercial operator there in front of me to take away my market share?'

"So we're placing all the demand risk and the network risk with the winning bidder. If stuff happens after the contract award which we aren't able to cater for, it's their risk."

The spokesman said that the Government had no choice but to adopt a "moving goalposts" approach to the tender contract.

"If we took our foot off the pedal for a second, nothing would ever get built," he said. "A lot of the commercial investment is being pushed by our planned intervention."

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