Rollout of high-speed broadband across rural Ireland to begin in autumn at cost of €3bn

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Rollout of high-speed broadband across rural Ireland to begin in autumn at cost of €3bn


Waiting game: Many parts of rural Ireland are still lacking in high-speed broadband
Waiting game: Many parts of rural Ireland are still lacking in high-speed broadband

THE rollout of high-speed broadband to the most remote parts of the country will begin this autumn at a cost of €3bn.

Ministers have signed off on a plan that will see every home and business offered fibre broadband, regardless of their location.

While officials in the Department of Public Expenditure have privately argued the plan does not represent value for money, the exact opposite advice has been put forward by the Department of Communications.

They believe high-speed broadband will ultimately change the fabric of rural Ireland and be worth at least €12,000 to every impacted home.

Independent.ie understands it will take up to seven years before every home is connected.

Homeowners will be expected to pay a one-off connection fee of €100 and can then buy services from existing companies like Eir, Vodafone, Virgin Media and Sky.

A new company, National Broadband Ireland (NBI), is to be established by the only bid left in the tendering process Granahan McCourt.

A source said ministers believe there is no other option but to proceed with the project.

Sources revealed the expected cost has jumped from around €1bn in December 2015 to €2.97bn now. This is due to a number of factors including the removal of around 300,000 of the easiest homes to access.

NBI will be using existing infrastructure to bring fibre cables around the country. The will effectively piggyback on the existing network of telephone polls and ducts which are maintained by Eir.

The company is expected to have a staff of 1,500 people and will receive a State subsidy for 25 years.

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They will be under an obligation to continue maintaining the fibre offering for another 10 years without a subsidy, but NBI will own the cables at the end.

A target of reaching 133,000 homes in the first two years has been set. After that between another 70,000 to 100,000 homes will be added to a broadband line.

Overall the intervention areas covers 540,000 homes and business. NBI will also be expected to provide a connection for any new homes building during the lifetime of its contract with the State.

A cost benefit analysis provided to ministers by the Department of Communications estimated access to high-speed internet.

It suggests the financial benefit to every home will be in the region of €12,000. For a business this jumps to €15,200 while farmers will benefit to the tune of €7,200.

Among the wider benefits will be:

  • Reduced traveling time due to the ability to work and access services from home.
  • Remote health monitoring and diagnosis.
  • Digital learning.
  • Smart farming.

Speaking after a marathon four-hour Cabinet meeting, Taoiseach Leo Varadkar said it’s his job “to imagine the future and think about what’s it’s going to be like”.

“When I do that, I think of things like homeworking. Already some multi-nationals employ a quarter of their staff from home. They require high-speed broadband and secure connections.

“At the moment, many people living in Rural Ireland are excluded. I have seen students in small rural and island schools being able to study subjects like physics by video-link to a larger school. This will be even more common in the future,” he said.

“As a doctor, I am fascinated by technological developments in healthcare. Remote medicine is emerging all over the world. Access to broadband affects many parts of Ireland, and it requires a national solution. So that we can connect with the world, with family members, with businesses, with new ideas and new ways of doing things.”

Communications Minister Richard Bruton said the investment will be justified.

 “The state has invested just €400m in broadband from 2002-2016. In the period 2002-2021, €36.9 Billion will have been invested in Roads and €10.8 in water infrastructure,” he said.

A small number of the most remote homes in the country will not be provided with fibre-to-the-home due to geographical reasons or excess cost.

NBI will have the option to offer a fixed wireless service if it is quicker to install or more cost efficient. The contract caps the number of homes that can be considered outside the standard approach at 2pc, which is less than 10,000 customers.

The contract between the State and Granahan McCourt will not be signed for another three to six months. This is to allow for final details around subcontractors to be teased out.

The deal includes a ‘claw-back’ mechanism that allows the State to claim excess profits if take-up is higher than predicted or if expenditure is lower.

Political reaction to the Cabinet decision is expected to be damning.

While most parties agree the project should go ahead, there are many questions about the final cost and future-proofing.

Already, Fianna Fáil’s expenditure spokesman Barry Cowen has said Fine Gael “made a balls of it”.

He argues it will “cost a fortune” and taxpayers “will get “no return on ownership”. At the same time, he said rural Ireland “can’t wait any longer”.

Labour Party leader Brendan Howlin said the Government was creating a monopoly for one company to control the market.

He believes a decision on awarding the contract should be delayed while all the evidence around alternatives, including using ESB’s network, is assessed.

“The Government simply wants to court popularity for the next few weeks,” he said, adding: “Fine Gael once had a reputation for financial prudence, that seems to have been shredded.”

Online Editors


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