CIO Folder: Rural digitisation

Leslie Faughnan

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17 September 2018 | 0

Ireland is facing a digital disaster and a national planning cul-de-sac. The outdated National Broadband Plan is already six years old — published in August 2012. It was updated in December 2015 in a document titled “Ireland’s Broadband Intervention Strategy” as a result of more than 40 submissions received in public consultation in July that year.

Six years is a lifetime in ICT. The NBP promised by 2015 “A minimum of 30Mbps for every remaining home and business in the country – no matter how rural or remote”. In 2015 the only progress was that public consultation. To date, not a single cable or connection has been laid under the NBP. In the meantime, the telecomms companies have expanded their coverage to reap profits from growing markets where expansion is economic for them. Small towns frequently have a choice of multiple Internet providers with fibre speeds and often have two or more metropolitan area networks (MAN).

“The NBP is urgent, not least in rescuing our national aspirations to be a digital leader and encourage FDI and our own indigenous economic growth. The NBP is now impracticable, and the government is frankly hanging on to a shredded dream”

But rural Ireland continues to be neglected, largely because it is not a viable market for private companies. This column’s home village, population 1,400, has far more households in the 5-6 miles radial ‘suburbs’ than in the village itself. They are principally private houses rather than farms, roadside one-offs or in developed small clusters. This is a pattern repeated all over Ireland, where detached new houses are built on rural family land or purchased sites within a short distance from schools and villages or towns. The majority of internet-craving households are not in isolated sparsely populated areas but in the ‘suburbs’ of smaller urban areas or on main roads. The 90+ MANs in Ireland are confined to urban streets/roads, with a minimum cost of €270 for even a 25-metre individual link.

Farms are another matter, equally significant. Farms are businesses, often with employees, who deal with a plethora of state compliance regulations and communications, from herd registers to grant applications to the CAP Single Payment Scheme. Almost 100% of farmers rely on mobile phones for communication, but nowadays have a PC for secure record keeping and more elaborate submissions to agricultural authorities. They also commonly have longish drives from the roads which poses an additional obstacle to wired internet connection.

Electrification example
Under the Rural Electrification Scheme, which ran from 1946 to 1979, farmers and isolated households paid a subsidised charge per pole to carry electricity supply to the main premises. Although the Scheme lasted over 30 years and consumed over a million poles and 75,000 miles of line, the bulk of the work was carried out in the 50s. The last district to be connected was the Black Valley in Kerry, which gained its first landline service in 2007 and still has no mobile reception.

In many ways Rural Electrification is a national and social model for the NBP. An exemplar, perhaps, given that it was a state scheme carried out by a state body, the ESB. The NBP relies on commercial partners under complex contracts. Rural Electrification project management was free to respond to unanticipated exigencies or change its practical plans, only rarely requiring the consent of the Minister.

We can take it that the withdrawing companies feared the rigid contractual obligations and dubious business returns. Enet* is the sole remaining tender contender and the smallest company. It has under 100 employees and will depend on sub-contractors to provide high speed internet in the NBP to 542,000 rural homes and businesses. The withdrawal of its major infrastructure partner SSE has left a void that is impracticable with a motley assortment of sub-contractors. This is not to take from the expertise, experience and professionalism of Enet, with 14 years’ experience as the leading provider of 94 government MANs. But it is, to be pedantic but to the point, a small enterprise, an SME.

While it is probable the Enet is capable of managing the NBP roll-out project adequately, in the opinion of this column it is time to re-think the NBP as a matter of government urgency. It is out of date. The NBP aspirations — and targets — have been overtaken by events. Dublin city has commonplace domestic internet speeds of over 150mbps to a max of 360mbps through Virgin cable. Businesses and universities and data centres enjoy gigabit speeds.

But there is a rapidly growing chasm in the divide between the internet wealthy and the digital poor, mostly urban vs. rural. The NBP is urgent, not least in rescuing our national aspirations to be a digital leader and encourage FDI and our own indigenous economic growth. The NBP is now impracticable, and the government is frankly hanging on to a shredded dream.

Gross mistake
It is a gross mistake for the government to attempt to save face by preserving the NBP tender mechanism with only one candidate. The national, necessary objectives of advancing Ireland’s technological capacity is dependent on universal Internet. Like Rural Electrification, which dragged us forward in the latter decades of the 20th century, Rural Digitisation is essential socially and economically in the 21st.

And urgent. An ever growing list includes communications and entertainment (how long will live TV/video last?), news, remote working, videoconferencing (Skype upwards), telehealth, Internet of Things, interaction and data sharing with business partners, the state, friends and family, education and research (Open University and growing Irish equivalents), small business and start-ups, individual professionals and artists, etc.

The need for greater Internet speeds is growing with progress. The out-dated promise of 30mbps minimum should be 100mbps or higher. We are way behind. The current target date for minimum 30mbps speed is the end of 2020: two years to go and the estimated three-year project does not even have a signed contract. By 2020 or 2021, that 30mbps speed will be primitive and some of the top level services will not even be available at that speed.

The NBP attempted to make a commercial deal, supported by state incentives and “An initial stimulus package of €275 million for the NBP….” In retrospect, that was a mistake. As the private sector contenders examined the project in depth, on by one they rejected it with the exception of Enet. If their collective judgement was that that the NBP contract was not viable, something is obviously wrong. To be relatively simple, the primary questions were about capital investment and yields over the 25-year span of the operating contract. Clearly, the majority of the contenders judged that the proposition — or the proposed contract — was dicey.

Cost estimation
The estimated cost is €1.5 billion and likely to escalate given the practical difficulties of laying over 110,000 kms of fibre optic cable (approximately the same as electricity lines in the Rural Electrification Scheme) and connecting isolated individual premises. Potential subscribers need not get the access for free — a subsidised charge could be made as an incentive to priority.

Half a billion, €500 million annually for about three years, is potentially a great investment. Relatively cheap, as it ensures our digital capabilities for the foreseeable future. More important from our national economic point of view, it is a backstop to prevent us sliding down the index of competitive countries, in the EU after Brexit as well as competing for other international trade.

But it is primarily a national investment, urgent and necessary. It must be looked at again as the NBP contract now has only one contender. By all means Enet should be involved, possibly as the lead, but the government should abandon the NBP as written, take over directly, revise the terms and get on with it and above all directly fund the investment. Internet service providers can then compete for the profitable operational contracts.

 

* Eir and Enet/eNet prefer to be spelt eir and enet, contrary to editorial/typographic conventions

 

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