Sunday 18 August 2019

Government will dismiss Eir’s €1bn broadband offer

Company won't challenge rejection, say sources, with €3bn Granahan McCourt deal set for autumn

Eir CEO Carolan Lennon
Eir CEO Carolan Lennon
Kevin Doyle

Kevin Doyle

The Government is set to dismiss Eir's offer of an alternative rural broadband rollout, despite the possibility of saving up to €2bn.

And Eir will not challenge the rejection, company sources said, leaving the state's proposed €2.9bn contract with Granahan McCourt set to be signed "by the end of autumn".

Government sources say Eir's proposal is vague, cuts corners and would leave individual households facing higher bills.

Ministers continue to publicly state they are open to a fresh approach to rural broadband but senior sources say they have no intention of reconsidering the project.

The move is likely to spark further questioning from critics who say the cost of rolling out broadband to every rural home is too high.

"There are cheaper alternatives being put on the table," said Professor Eoin Reeves, head of the Department of Economics at the University of Limerick. "With the financial headwinds we currently face, the Government should not proceed with the current tender plan."

However, while officials in the Department of Communications have written to Eir seeking more detail, they are "highly sceptical" about Eir's intervention and say there has been a "change in tone" to their interactions with the company in recent weeks, sources told the Irish Independent.

Officials from the Department of Communications met with Eir as recently as three weeks ago but the broadband proposal was never raised.

"The Eir idea is a watered down version of the National Broadband Plan. It removes most of the obligations on them and at the end you'd have a network that is less regulated," said a source.

The NBP commits Granhan McCourt to providing a connection to half a million homes, farms and businesses, primarily in rural Ireland.

The cost of reaching homes in some of the most remote parts areas will be heavily subsidised by the taxpayer.

Eir has made clear its alternative proposal is based on its current fibre broadband service and the Government would need to abandon the current rules and regulations attached to the current National Broadband Plan.

A Government source said this is a "social commitment" that will not change as to do "would transfer huge costs back on to the consumer".

Finance Minister Paschal Donohoe said he wants to know how Eir is now in a position to put forward a plan that is at "a lower cost than the proposition they were discussing when they were inside the tendering process for the National Broadband Plan".

Asked if he believed Eir were being mischievous, the minister said: "What I'm more focused now on doing, rather than making a judgement on what their intentions are behind what they are doing, is understanding if the proposition they now have would make a difference against how we deliver the National Broadband Plan."

He said the Government would engage with Eir in an attempt to fully understand what is being proposed.

"At the committee appearance earlier in the week they indicated they could offer 100pc coverage.

"They also indicated they would be able to deliver contact to the home, this is why the Department of Communications has written to them and is going to meet them," Mr Donohoe said.

"Given that the current contract for the National Broadband Plan hasn't been signed, I don't think it would be fair for me to indicate what we're going to do apart from saying that we need to understand what Eir are proposing."

Irish Independent

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