The Department of Communications, Energy & National Resources has released the shortlist of three companies competing for the contract to deliver broadband to rural areas around the country.
Eir, Siro and the Granahan McCourt/enet consortium will go forward to an additional round of negotiations with the Department on the rollout of a national broadband network capable of delivering a minimum connection speed of 30Mb/s – in line with the EU’s Digital Single Market plans.
Unfortunately both the scale of the project and the funding model have been revised. Some 170,000 homes and businesses expected to be serviced by private operators are still unable to get reliable connectivity and will be added to the initial goal of connecting 757,000 premises by 2022.
Furthermore, instead of ownership of the new network reverting to the State after 25 years as per the initial full concession announcement, the successful bidder will self-finance the build and commit to a universal service obligation. This ‘gap funding’ (commercial stuimulus) model will keep the project off the national balance sheet and save the exchequer up to €600 million.
Minister for Communications Denis Naughton said his department had commissioned detailed costings, “down to every individual home in the Intervention Area” and on that basis, had modelled the likely cost of each ownership model.
“While I recognise the potential long-term value in the state owning any network that is built, I am advised that under a full concession model, the entire cost of the project would be placed on the Government’s balance sheet, with serious implications for the available capital funding over the next five to six years.
“Given that both models will deliver the same services and be governed by an almost identical contract, I cannot justify reducing the amount of money available to Government for other critical priorities such as climate change, housing and health, over the next six years.
“I am confident that we can put in place measures to ensure that services continue after 25 years, in the case of the commercial stimulus model” Minister Naughten said. In this regard, he noted that he has already raised the question of a universal service obligation [USO] for high speed broadband, at EU level. He is also in discussion with ComReg about a form of USO in areas where commercial providers have already built high speed broadband networks, but where issues might arise with new-builds.”
“The NBP aims to deliver high speed broadband to every home, school and business in Ireland. This is being achieved through a combination of investment by the telecoms sector, primarily in cities and towns across Ireland, and a state-led Intervention, predominantly in rural areas, where there is no certainty that the telecoms sector will invest.
“I have a responsibility however to ensure that nobody is left behind.”
The contract is expected to be awarded by June 2017 with work to begin that year.
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