Eir ready to 'reach a deal' with Government on National Broadband Plan replacement - chief executive
Eir’s chief executive says that her company is ready to “reach a deal” with the government on a replacement to the National Broadband Plan.
The move comes as Eir continues to chip away at what it calls the “expensive and unnecessary” conditions of the state’s rural rollout process.
In an email to Eir staff, Carolan Lennon said that Eir is awaiting a response from the government to its most recent letter outlining its approach.
“If we could reach a deal with the DCCAE on rural broadband we would build up the resources needed to ensure we can deliver both at the same time,” she said, referring to the company’s other broadband rollout plans in cities.
“We await the Department’s response and if at any time in the future it would like to look at a commercial model to deliver NBP then we will engage seriously with a view to delivering it.”
Ms Lennon told TDs and Senators last week that Eir could roll broadband out to the 540,000 homes in the government’s ‘intervention area’ for under €1bn including Vat, but only if the current delivery, price and transparency conditions attached to the National Broadband Plan were dropped.
The government rejected Eir’s comments, saying that the company would have to cut too many corners and raise prices too much to deliver it under the standards required by state aid. A new process would take “at least” three years to decide upon, a spokeswoman said.
The Department of Communications’ top civil servant, Mark Griffin, also told TDs that it would be illegal under state aid rules to dump the NBP process and hand €1bn to Eir.
However, Fianna Fail has urged the government to slow or stop the state-sponsored rollout to further examine Eir’s alternative proposals.
Eir’s chief executive denies that the company is trying to disrupt or slow down the NBP process for its own commercial reasons.
“We did not go to the Committee to try to get back into the NBP,” she said. “It is not our intention to publicly clash with the [government]. I have turned down interview requests from the media as all of the pertinent facts have been laid out before the Oireachtas Committee
We left the process for good reasons and those reasons have not changed. We were asked to attend the Committee and went in with the aim of providing total transparency to the Oireachtas and to the Irish taxpayers. We are the largest telecoms company in Ireland, we are experts in building a rural FTTH network and we are the only people who know how much that costs, so I feel we have an obligation to share that hard-won insight and experience.”
She said that Eir’s alternative rollout would be based on its broadband network to 300,000 rural premises, which is almost completed, “for less than €1 billion if we were to use the same tried and tested process”.
“There are of course conditions that would have to be met to enable the delivery of the programme at that cost. These conditions include the removal of expensive and unnecessary complications and a change of process, to follow the methodology we used on the rollout of our rural 300,000, now 340,000.
“While this network would not be exactly the same as envisioned in the NBP, it would be exactly the same as the 340,000 and it would deliver the same policy objective.”
However, Ms Lennon did not say that the company is formally proposing such a plan to the government.
Nevertheless, officials from the Department of Communications poured cold water on Eir’s €1bn alternative rollout in front of a joint Oireachtas committee yesterday..
“If we had to start a new procurement process for whatever reasons, we estimate that it would take at least three years, taking account of the requirement to consult on a new strategy, the procurement rules which mandate particular timelines, State Aid notification, a new CBA and evaluation,” said Mark Griffin, Secretary General of Department of Communications.
”Further time would be required to mobilise and commence rollout.”
Mr Griffin said that in that three years, over a third of the 540,000 premises allocated for the state-funded rollout would see their homes “passed”, ready for connection.
He also said that the government is legally prevented from quickly taking up Eir on its offer of an alternative rollout outside the current National Broadband Plan’s structure.
“From a purely legal perspective the Government could not accept such an offer [from Eir] even if it were made, given procurement and state aid law. The State cannot simply mandate and fund directly outside a procurement process any economic undertaking to carry out a project of this nature.”
The programme director for the National Broadband Plan, Fergal Mulligan, also told the Oireachtas Committee that Eir’s connection charges would see much higher costs passed on to rural homes owners.
"If we use the Eircom model, consumers would be paying €1,000 or more to connect," said Mr Mulligan. "We know the costs are different [in the NBP area] to Eir's 300,000 area. Eir were very specific about that before they started.”
Government officials also said that they hope to conclude a contract with the existing ‘preferred bidder’ for the National Broadband Plan contract, National Broadband Ireland, “in the next few months”.