The country is well behind on its rollout targets, which had been set at 115,000 rural homes and businesses by the end of January. With just six weeks to go, there are only 35,000 ready to be connected
What’s going on with Ireland’s National Broadband Plan? Why is it continually delayed? Will it still be fully rolled out as planned? And are there questions still to be answered around its financial structure?
In a small country road in the Wicklow hills in mid-December, two engineers are carefully pulling a long, thin fibre cable through a buried duct pipe. Normally, fibre can be ‘blown’ through a duct. But because the boreen’s duct winds and bends and rises under the ground, dodging rocks and other obstacles, it has to be done manually and slowly.
“It’s only when we open up the ground to look at what’s actually there that we get a sense of how quickly or slowly this is going to happen,” says TJ Malone, the National Broadband Ireland’s head of deployment and construction, who is visiting the onsite crew.
The company responsible for maintaining Ireland’s underlying national telecoms network, Eir, hasn’t always been able to say what condition every part of these ducts and chambers are in, he says.
“Some of it is in really bad shape. What might have been pegged as a day’s work here could turn out to take a week or more.”
Lately, the state of Eir’s ‘neglected’ network has become the subject of tense, summit-level meetings between Eir’s CEO, NBI officials, Ireland’s telecoms regulator (Comreg) and Ministers at the Department of Communications.
The stakes are high. The country is well behind on its NBP rollout targets, which had been set at 115,000 rural homes and businesses by the end of January. With just six weeks until that milestone, there are only 35,000 ready to be connected.
Next year looks more promising, with construction on 150,000 premises started. While the majority of these are expected to be ready sometime next summer or autumn, executives concede it’s doubtful that its standing target of 200,000 by the end of next year will be completed.
“We’re looking at somewhere between 115,000 and 130,000,” said NBI CEO Peter Hendrick.
That’s at least 70,000 homes that may face another Christmas without the ability to reliably Facetime relatives abroad or watch Netflix as an alternative to pubs and restaurants, and whatever the latest variant of Covid will be at that point.
So what has caused the actual delays?
“In the early stages, Covid was a big issue,” says Mr Malone. “At one point, 40pc of workers at one of our main contractors were out with it.”
But lately, NBI’s finger of blame has started to point in another direction: a creaking national network that NBI claims is in worse condition than was thought.
“Eir’s network has been underinvested for decades,” says David McCourt, NBI’s chairman. “It’s got to the point where it’s holding us up.”
This matters, he says, because the bulk of rural fibre upgrades depend on using Eir’s infrastructure, whether that’s poles or underground ducting. Whereas cities and large towns have seen rivals such as Siro and Virgin Media put down alternative networks, in rural areas, Eir’s pathways are largely the only option. And while Eir is obliged by law to keep these routes functional for telephone services over existing copper lines, it doesn’t have to make them fibre-friendly in any way.
“We’ll come across a blockage and inform Eir, who might take a week to clear it,” says Mr Hendrick. “But then there’ll be another one a little further along and we have to go back and repeat the process.”
NBI says that it has asked for a licence to clear network blockages itself, without having to apply to Eir. But while the telecoms regulator has introduced a ‘self-install’ measure to partially allow for this, NBI says that it doesn’t work efficiently because it still requires Eir’s intervention. This, NBI argues, will keep a large chunk of the process in the slow lane.
A spokesperson for Eir declined to comment on the subject of blocked ducts or pampered infrastructure. But its executives say the company is complying with its obligations to co-operate with the National Broadband Plan.
“Building communications infrastructure is challenging and complex, but, using Eir’s own infrastructure, we have continued to expand our fibre network, despite the pandemic, storms, and all other challenges,” said an Eir spokesperson.
Eir executives also point to the fact that its company rolled out fibre to over 300,000 homes in rural towns and townlands almost three years ago, a process that took them just 24 months.
Asked about this, NBI executives argue that those were the “easy” rural premises to connect, not the ones up mountains or on remote boreens with no poles and blocked ducts.
Smaller delays include some minor acts of sabotage.
Gardaí in Wicklow are investigating damage to a number of telephone poles erected by NBI to bring fibre broadband to the local area. The poles, which occupied a stretch of road near Kippure, were illegally cut down and piled in a heap at the side of the road.
Regardless of who or what is to blame for the delays, the consequences could not only put back the arrival of broadband to hundreds of thousands of rural residents by up to a year, it could mean the extension of the long term rollout itself.
According to NBI executives, the plan may now take seven-and-a-half years instead of seven.
While Communications Minister Eamon Ryan has repeatedly stated an intention to seek an acceleration of the rollout timetable, NBI says that it has not yet been able put in place any formal timetable for that to happen.
How does this kind of delay affect taxpayer subsidies? Is the public paying for something that isn’t yet being delivered? Department of Communication officials insist that this isn’t the case.
To date, the government says it has paid out €132m in subsidies to NBI. The contract could cost the taxpayer up to €3bn. Speaking to the Irish Independent this week, a spokesperson for the Department said that NBI was only being paid public cash as it hit pre-defined rollout “milestones”.
While the Government has refused to specify the milestones in detail, they are understood to relate to infrastructure completed and connection availability to homes and resellers.
According to the National Broadband Plan contract, audited costs must relate to “works, services, equipment and materials” attached to the building process.
Recently-published accounts for NBI show interest payments of up to 12pc accruing to loans made by investors in the project.
Asked whether this amounted to taxpayer money exiting the project into the pockets of private equity funds, Mr Hendrick said that this wasn’t the case.
“None of the subsidy that we got relates to interest payments or any shareholder,” he said, adding that NBI will not be profitable for “several years”.
Mr McCourt said that he has invested €26m into the project and that private equity firms do not own a majority interest in the rollout company.
Last week, questions were raised in the Dáil about the financial activities and structure of NBI, with Sinn Féin leader Mary Lou McDonald asking whether media reports of NBI becoming majority-owned by US private equity funds were true.
Minister of State at the Department of Communications, Ossian Smyth, said that the ownership of the company had not changed.
Several TDs remain critical of key NBP contract provisions remaining redacted, including provisions relating to key milestones and subsidy payments.
NBI executives and Department officials claim that redacted provisions protect commercially sensitive features of the contract from suppliers potentially overcharging for services or materials.
Last week, the telecoms regulator said that EU rules will prevent it asking Eir to provide access to poles in rural areas at a discounted price from the usual commercial rate, a move that would have cut the taxpayer subsidy on the bill.
Mr McCourt said he is actively seeking “long-term capital” for the project.
He said he is pitching the National Broadband Plan to potential investors as a template for what might be achievable in other countries around the world.
“Ireland is behind the curve when it comes to exporting IP,” he said.
“This could be an example for other countries to follow.”
Neither the Department of Communications nor NBI say they’re concerned about reports of imminent ‘encroachment’ by Eir into NBP intervention areas.
At least 25,000 homes in NBP-marked rural zones may now be ‘passed’ by Eir under its own fibre expansion plans, leading to fears of overpayment by the taxpayer for homes already covered by private operators.
A spokesman for the Department of Communications said that this would be a matter for NBI to decide on whether or not to connect such homes, but that the taxpayer would not be out of pocket due to contractual conditions around connections.
Mr Hendrick said that NBI will look at the homes on a “case by case basis”.