Government launches national broadband plan, avoids legal action by Eir
Eir will not pursue legal action in Europe against the state-subsidised National Broadband Plan after the government admitted that the 750,000 rural homes and businesses to be covered by the plan can be reduced.
The move comes as the government released an updated map showing the locations of rural homes and businesses that will be included in a taxpayer-funded broadband rollout over the next five years.
The broadband plan will guarantee minimum speeds of 30Mbs at current market rates to every home and business in the country, regardless of location. Rural dwellers seeking to find out whether their home or business is covered by the plan can enter their Eircode postcode on the government’s new NBP website to find out.
The scheme will cost the state an initial €275m, €75m of which is being supplied by the European Regional Development Fund. The government will 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, according to a spokesman for the Department of Communications.
Under EU state intervention rules, the government cannot roll out broadband in a rural area if a private operator plans to do so itself.
But announcing the final version of the broadband map before going to tender, Minister for Communications Alex White said that the 750,000 premises to be covered “could be varied” if private operators “clearly showed” the government that they would provide similar broadband in the same area.
Eir recently announced that it would cover 300,000 of the 750,000 homes and businesses to be included in the National Broadband Plan districts. However, Minister White said that the government was not yet convinced that it would do so.
“Several operators submitted plans in this process, which were assessed by the department and our technical and financial advisors,” said Mr White. “To date, no company has satisfied our criteria or signed a commitment agreement. We’re asking operators to enter into a binding commitment about their plans.”
Such a binding commitment, said a department spokesman, would come with penalties if broken. The spokesman declined to specify the penalties, saying that they are “commercially sensitive”. He said that none of the operators were willing to sign the commitment and that the state had no choice but to proceed with its own plans to cover the rural areas as part of the overall plan.
“If a commercial operator says that they’re going to do something, that is taken increduibly seriously,” said Minister White. “But an assertion of a plan cannot be taken just entirely at face value. We have a responsibility to assess and to scrutinise what we’re being told, in terms of its credibility. Does it actrually stack up in terms of deployment in terms of the technical content and in terms of its financial content? And that is the assessment that we have made. And we have drawn the conclusion that it is not appropriate for us to alter the mapping that we currently have.”
A spokesman for Eir said that the telecoms firm will continue with its plan to roll out fibre broadband in some of the rural areas mapped by the government for the state-subsidised plan, a course that could cause the European Commission to disallow the government to pursue its rollout plans.
“We intend to proceed with the rollout into rural areas,” said the spokesman. “Some of them will start seeing services next year. We intend to reach 1.6m premises by the end of 2016 and 1.9m premises by 2020 which will maximise the commercial rollout of high speed broadband and minimise the cost to the exchequer and to taxpayers.”
The spokesman said that Eir did not intend to take initial legal action against the National Broadband Plan. He said that Eir regarded the map’s adjustement facility as being an important one.
“We’ve set out a clear process for dealing with any future changes that may occur to the map,” said Minister White. “We’re publishing a document which sets out any changes that may be necessary to the map, through the procurement process and then during the roll out of the network. If operators can meet the criteria set out in the criteria then these can be reflected in the procurement process.”
Six companies have expressed an interest in tendering for the project, which will have a duration of 25 years. They are: Eir, Siro (the joint venture between Vodafone and the ESB), Sean Bolger’s Imagine, eNet, the French telecoms firm Bouyges and Gigabit Fibre, a new company set up by former Vodafone, Eircom (now Eir) and O2 executives to tender for the NBP.
Minister White said that the government has yet to decide on the commercial basis of the National Broadband Plan tender contract. He said that it will either be a model that hands over ownership of the network to the operator after teh 25 years are up, or a model that simply ‘leases’ a state-owned network to an operator for 25 years, after which it reverts back as a state asset.
The tender will incorporate a Northern and a Southern region, matching the zones identified by the European Regional Development Fund.