Business Technology

Thursday 17 October 2019

81,000 face paying thousands 'just to connect to broadband'

Varadkar demands assessment of €1bn high-speed internet offer

Taoiseach Leo Varadkar. Photo: Damien Eagers/INM
Taoiseach Leo Varadkar. Photo: Damien Eagers/INM
Adrian Weckler

Adrian Weckler

Up to 81,000 homes face new broadband connection fees running into thousands of euro under Eir’s replacement National Broadband Plan, Government officials have warned.

Communications Minister Richard Bruton’s office has branded Eir’s proposals “unaffordable” to a large number of rural residents.

The officials also said that all 540,000 homes would face higher connection charges of €170 under Eir’s plan, which the company says can be rolled out for €1.7bn less than the State’s estimated €2.7bn bill. Eir disputes the figures presented by the Government, saying the number of costly “non-standard connections” would be lower than department estimates.

The row comes after Taoiseach Leo Varadkar told the Dáil he would consider the company’s alternative proposals to the State’s long-running procurement plan if they stacked up financially.

“If this can be done at a much lower cost to the Exchequer then I’m all ears,” he said.

“My concern, and that of the department, is that rather than Eir making up the difference, a big part of it would be met by imposing higher connection charges and fees on those 500,000 homes, farms and businesses in rural areas than are imposed on those in urban Ireland.

“That would be a serious problem for us and would go against the original objectives," Mr Varadkar said.

"What we need to assess now is whether what they're now saying is a genuine offer, whether it stacks up, and whether a further procurement process would take a very long time, whether it would be compliant with EU procurement and State aid."

But he said that it would be "a big turnaround that the company is now saying that it can do the project for €1bn", when it originally submitted a €2.7bn bid.

Eir chief executive Carolan Lennon threw the National Broadband Plan (NBP) into fresh chaos this week when she said the firm could connect rural homes to fibre broadband for less than €1bn.

However, Ms Lennon said all of the strict guarantees and customer service arrangements associated with the NBP would have to be rescinded, in favour of a less onerous approach currently operated by Eir in rural areas.

This has led Government figures to question the validity of Eir's alternative proposal, with officials claiming the two plans "are not like for like".

The Department of Communications has asked for "a detailed note" from Eir "setting out all the assumptions made and the financial model underpinning the €1bn".

A Department of Communications spokesman said: "The figure quoted by Eir of €1bn, whether for capital build or for subsidy, is still unclear, as are how Eir's assumptions would comply with State-aid requirements.

"This is markedly different to the €2.7bn, which is exclusive of Vat, that Eir submitted in their indicative bid in September of 2017.

"The Eir €1bn, on the face of it, does not include the cost of connection for non-standard connections which are estimated to be in the region of 81,000 premises across rural Ireland.

"Effectively those premises would be required to cover the full cost which would be in excess of Eir's standard connection charge of €170, excluding Vat, from their own funds.

"This is at odds with our fundamental objective of ensuring all premises have access to high-speed broadband at affordable and comparable prices to those in urban areas."

Irish Independent

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