Sunday 21 July 2019

Adrian Weckler: 'Nice try Eir, but no thank you'

Taoiseach Leo Varadkar said he was ‘all ears’ about the broadband process. Photo: Steve Humphreys
Taoiseach Leo Varadkar said he was ‘all ears’ about the broadband process. Photo: Steve Humphreys
Adrian Weckler

Adrian Weckler

So what happens now? Simple - the Government says it will not accept the company's €1bn alternative to the National Broadband Plan.

It is turning the cheaper plan down because Eir's proposal, officials claim, cut all sorts of corners and saddled rural homes with much higher bills.

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Furthermore, Eir is fine with this decision. Its senior executives say they won't challenge it.

Not only will they let this one rest, but they won't even protest if the State keeps some 90,000 homes in its 'intervention area' that Eir has said it will connect itself. At least, this is what the firm's chief executive has said. That would appear to be that.

So was last week's hoo-hah just a useless storm in a teacup?

For Eir, absolutely not. It very adroitly repositioned itself in two ways.

First, if anything goes wrong with the current National Broadband Plan, Eir is now the first fallback option that the body politic will instantly turn to. And because Eir has defined the terms on which it would do the project, it is already ahead of State negotiators.

Second, Eir has skilfully repositioned itself as a professional, lean, no-nonsense telecoms company that can get on with something at a much lower cost than the 'bureaucrats' would have us take.

Ryanair's Michael O'Leary couldn't have put in a better performance. That €1bn figure Eir kept mentioning is the most memorable part of last week's NBP argy-bargy.

It will hang like a ghost over the process for the last, tortuous months before the contract with Granahan McCourt (National Broadband Ireland) is signed.

Taoiseach Leo Varadkar, battle- hardened throughout this process, took a slightly devious position on the controversy. He said he was "all ears", appearing to leave the door open to a rethink. It was a bit of a facade. His officials were telling him that the Eir proposal was a non-starter without tearing up the government tender and all of the protections that the current plan has for rural householders. (For a more in-depth look at these specific differences, see my analysis on independent.ie).

He just needed time for those officials to put down the obvious discrepancies in writing, go through the formalities of getting those confirmed by Eir through a "response" from the firm, and then let the issue slide away when Eir didn't pursue it.

He was helped in no small measure by the ESB's director of strategy, Denis O'Leary. O'Leary was called before the same Oireachtas committee a day after Eir's CEO chucked her Molotov cocktail into proceedings.

The TDs present really just wanted to know one thing: could the ESB deliver the National Broadband Plan for something akin to the €1bn Eir was talking about?

No way, said O'Leary. He admitted that, as a 95pc state-owned entity, if the ESB was directed by the State to deliver broadband, it would probably have to do it. But for the type of money Eir was talking about? "No," he said.

This was a pivotal moment in the week's NBP crisis. Had O'Leary even hinted that the ESB could deliver rural broadband for significantly less than the estimated €2.7bn currently in play, it would have been real ammunition for those itching to argue that the State is simply paying too much for the outcome being received. But O'Leary, a seasoned, sharp operative, actually praised the tender process, calling it "very fair".

Through testimony supported by charts, he explained why Siro - the joint venture between Vodafone and the ESB - had pulled out of the NBP. It was, he said, because of the way that Eir had created "doughnut" configurations around the rural towns central to the delivery of the NBP broadband. Eir had done this when it picked off some 300,000 of the intervention-area rural homes for its own commercial rollout.

O'Leary was not in any way bitter or angry about this, putting it down to the world of business and justifiable tactics.

But it matters when it comes to how policymakers feel about Eir, especially in the context of fresh considerations as to whether the company is a potential plan-B option for the State.

Eir, some politicians feel, would be rewarded with a massive state-subsidised contract - and giant new national network - having torpedoed the previously viable rural rollout plans of the State.

Eir obviously has a very different take on this. It believes that it had - and has - every right to commercially service broadband wherever it can.

Furthermore, it points out that if its fibre-to-the-home broadband to 300,000 rural homes is good enough for officials (including the telecoms regulator ComReg), why is it being painted as such a no-no for the rest of the rural residents currently without broadband?

Isn't the overall policy goal simply to get good broadband to as many people as possible?

There are still other issues that will bubble under before, during and after the National Broadband Plan contract is signed.

The most practical one is that almost no deadline has been set during this process. So even though the Government insists that a contract will be signed by November, it's anybody's guess whether it will be. That could have a knock-on effect on rollout dates. I remember in 2015 when my prediction of 2023 for the NBP was regarded as a preposterously gloomy one. But there is no way now that it will be finished by then.

Other objections abound. A substantial minority believe that the whole idea of connecting rural premises at taxpayer cost is an unjustifiable reward for bad planning. Others genuinely believe in alternatives, such as satellites from Elon Musk or 5G (somehow without the 6,000 new masts this would require).

But while we'll still debate these issues, they're somewhat moot. Last week, the Government gave an illustration that its mind has been made up. It is sticking with the current process.

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