Wifi broadband companies to sue over €500m National Broadband scheme roll out
Published 24/05/2015 | 02:30
Thirty six rural broadband providers are preparing European legal action aimed at disrupting the government's state-subsidised €500m rural National Broadband Plan.
The rural operators, which have 75,000 customers between them and have formed an industry group called Wireless Broadband Ireland, say that the rural broadband plan would destroy up to 60 existing wireless broadband operators with the loss of hundreds of jobs. They also say that the plan will leave over 200,000 people facing broadband misery for five years as rural operators walk away from providing services to the country's worst-hit broadband blackspots.
"We're already being damaged commercially by the government's grandiose-sounding promise of 30Mbs of fibre for every home and business in rural Ireland," said John McDonnell, chairman of the group taking action.
"Fair play to Eircom and Vodafone for being interested in winning a state-funded tender. But if it means them getting state subvention to take 60 existing competitive wireless broadband companies out of the marketplace, then sorry. That is basically unfair."
The government's National Broadband Plan is scheduled for public tender later this year and is due to start construction in late 2016. But it needs to pass a European Commission test that it is not an unwarranted state intervention that disrupts existing viable commercial services.
McDonnell says that wireless operators already offer some services that match the government's speed requirements under the National Broadband Plan and could extend them if given access to licensed spectrum held by Comreg.
"We are being locked out of the marketplace, locked out of the entire process," said McDonnell. "The government and Comreg both shrug their shoulders about it. They have all ruled out wireless for no apparent reason. Up to now we haven't been able to do much about it because none of us individually has the finances to match the millions and billions available to multinational operators. But now we've come together and we intend to do something about it."
McDonnell, whose own wireless broadband operator Ripplecom employs 30 people and is active in broadband blackspots in 25 counties, said that broadband in rural blackspots will get worse while the National Broadband Plan is underway.
"There is going to be carnage in the marketplace," he said. "Investment in the wireless operators is already drying up. Why would anyone invest in existing rural broadband under these conditions? Ironically, this National Broadband Plan process could end up depriving many homes and business premises of any broadband at all for several years to come."
Two companies have already said that they will bid for the National Broadband Plan tender. Eircom and Siro, which is a joint fibre broadband venture between Vodafone and the ESB, hope to win the contract that the government says it will subsidise at a taxpayer cost of up to €512m.
Both Eircom and Siro are currently rolling out commercial fibre broadband services in 50 large regional towns, but the companies say they will not extend the services to 700,000 rural Irish premises without state subsidies.
Sunday Indo Business