Should the Government ditch the National Broadband Plan and focus on wireless for rural areas?

Imagine CEO Sean Bolger at the launch of his firm’s broadband roll-out
Adrian Weckler

Adrian Weckler

Should the Government ditch the National Broadband Plan and trust a wireless operator to follow through on a promise to connect 400,000 rural homes and businesses? This is now a big question for Richard Bruton, the Taoiseach and more than a million Irish people in badly-served broadband areas.

Imagine Communications, the wireless broadband provider well known for its previous WiMax service, now says it plans to connect 400,000 of the 540,000 rural homes earmarked for state-subsidised rural broadband connection.

Chief executive Sean Bolger said this is to be a €300m commercial roll-out, with no state subsidy required. It will, he said, deliver speeds of 150Mbs to rural homes and business, a level currently in excess of the Government's high-speed broadband criteria.

A home or business will get access by an antenna on the roof, which will connect to a nearby mast. It will be faster than current roof-aerial broadband because of new spectrum Imagine is using.

So can the State now save €1bn of taxpayers' money? Is there any need for us to subsidise a buildout in rural regions? After all, this wireless company says it will do almost all of it, right?

But will it? Before the State decides to walk away from a guaranteed fibre broadband network for anyone who wants it in rural Ireland, it should ask some very detailed questions about the exact detail of what's being proposed.

I did exactly that last week and found a roll-out schedule that may be much less ambitious, or certain, than commonly reported.

Here's what's actually being proposed - 325 wireless 'sites' (such as masts) are to be put up in various locations, each touching an NBP intervention area, by June of next year. Imagine Communications is restricting the number of households it will connect per site to "between 300 and 400", even where there are many more homes in the area, because of 'contention' (where the service slows down if too many people use it, something that largely doesn't happen using fibre).

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So there looks set to be a maximum of 130,000 homes (possible fewer) able to access the planned broadband service when its main phase will be rolled out by June of next year. That's a maximum of about 25pc of the area that needs to be covered under the NBP.

And that is as far as Imagine's guarantee seems to go. So how does it all get to the 400,000 figure touted in the headlines, you might ask?

"We'll be led by demand," Bolger says. "It's like in-fill. We can add more sites with the demand." This is the system that Imagine uses at present. As its website makes clear, Imagine asks local communities to let the company know that there's a certain quota of homes ready to pay for its broadband. Then it builds a site or a mast and offers the service.

So it's not a question of the network being built as a basic piece of infrastructure. It's a case of it being built only if individual communities can convince Imagine to build it based on what will make a commercial return. And beyond the initial maximum of 130,000, it seems it will all be on a very piecemeal basis.

In terms of a guarantee to rural Ireland, there are none under this system.

Bolger himself acknowledged this last week, when he told an Oireachtas Public Accounts Committee that the NBP as constituted might actually be needed "if we don't deliver".

Should the State halt or change a long-term concrete plan based on this?

There are some who believe we should. The National Broadband Plan will, after all, probably cost somewhere between €1bn and €1.5bn. Should the Government be continuing with this projected spend if there's a chance that the private sector might do some of the job on its own commercial terms?

This is where tough decisions may have to be made.

Right now, the lack of proper broadband in rural areas is bleeding the land dry of young people and community-sustaining businesses.

This is why the concept of a National Broadband Plan, even one subsidised by the State to the tune of €1bn, has been broadly supported since its inception seven years ago. It really is something of an infrastructural emergency.

While Imagine says that it supports the concept of a National Broadband Plan, it is reserving its position on whether or not it might now challenge the process under EU state aid rules.

Bolger said as much to the governmental Public Accounts Committee on Thursday. "There is a risk that unnecessary market intervention and cost could lead to difficulties with State Aid Approval," he told the Committee on the subject of the NBP.

The risk here is that Imagine might follow through on this, arguing that its 130,000-home rural roll-out should prevent the Government's 540,000 rural roll-out for EU state aid reasons.

So what should the Government do? How, or at what point, should it stand the current process down while Imagine tests the rural market to see if communities will ask it to set up masts?

In Ireland, we have a precedent for this: Eir's famous (or infamous) 300,000 rural fibre build. To take the 300,000 out of the NBP intervention area, the Government insisted that Eir sign a binding contract with penalties if the company didn't follow through. The company signed and, two years later, those 300,000 rural homes almost all now have proper fibre broadband.

There's no such arrangement likely here. Indeed, a Communications Department spokesperson said Imagine has not even formally submitted plans for their NBP area roll-out.

So what is the Government's duty, here? Imagine believes a compromise is possible, where the NBP is changed to become a backhaul-only rollout, allowing private operators like Imagine to connect households. This would be a sea change for the Government and might send a tender back to the drawing board, with years more to wait for another.

Sunday Indo Business


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