Ivan Yates: Time to pull the plug on broad­band de­ba­cle

Irish Independent - - News Economy - Ivan Yates

YOU’VE heard of Mur­phy’s Law – what can go wrong, will go wrong. But per­haps you haven’t heard of O’Toole’s Law – Mur­phy was an op­ti­mist. The Na­tional Broad­band Plan (NBP) has op­er­ated un­der O’Toole’s Law. Since 2012, ev­ery set­back that could scup­per pro­vi­sion of na­tion­wide ru­ral broad­band has con­trived to be­devil suc­ces­sive gov­ern­ments’ false dawns.

The lat­est twist in the saga is that for­mer com­mu­ni­ca­tions minister De­nis Naugh­ten ap­par­ently acted ap­pro­pri­ately in con­duct­ing 18 meet­ings, five din­ners and nine phone con­ver­sa­tions with the re­main­ing bid­der, Grana­han McCourt. You don’t need an in­de­pen­dent as­ses­sor’s re­port to re­veal the of­fi­cial and min­is­te­rial des­per­a­tion to keep any player at the ta­ble.

Au­di­tor Peter Smyth’s re­port high­lights the vague loose­ness of de­part­men­tal pro­to­cols in deal­ings with ten­der­ing, the weak­ness of reliance on the in­di­vid­u­als’ bona fides, and how Naugh­ten re­sign­ing made the re­view aca­demic any­way.

Broad­band is the key to se­cur­ing sur­vival of ru­ral en­ter­prises and com­mu­ni­ties much more than re­tain­ing sub post of­fices, Garda sta­tions, ru­ral pub­lic trans­port or oneteacher pri­mary schools.

Com­mu­ni­ca­tions min­is­ters are like 26A buses. There’ll be an­other one com­ing along soon. Procur­ing cost-ef­fec­tive na­tion­wide broad­band is a one-off op­por­tu­nity.

We’ve seven broad­band providers in Ire­land: Eir, Voda­fone, Vir­gin Me­dia, Sky Ire­land, Pure Tele­com, Rip­ple Com­mu­ni­ca­tions and Digi­web – with an ad­di­tional host of niche re­tail op­er­a­tors of ISP in­fra­struc­ture and mi­crowave broad­band net­works. The pace of tech­no­log­i­cal de­vel­op­ment is so rapid that any sin­gle so­lu­tion won’t work. In­stead, hy­brid con­fig­u­ra­tions of com­mer­cial fi­bre and wire­less tech­nol­ogy are re­quired.

The in­sur­mount­able dif­fi­culty with de­liv­er­ing on Taoiseach Leo Varad­kar’s ‘per­sonal cru­sade’ is that most of the play­ers in the mar­ket aren’t now in­volved in the ul­ti­mate con­sor­tium to de­liver the NBP.

First the with­drawal of Siro. Their €450m joint ven­ture be­tween Voda­fone and the ESB, es­tab­lished in 2015, plans to con­nect 450,000 cus­tomers with speeds of up to 1,000Mb per sec­ond, spread across 50 medium-sized towns. This rep­re­sents a par­al­lel uni­verse to the NBP.

The sub­se­quent de­par­ture of Eir from the NBP process sig­nalled the death knell for a sus­tain­able cred­i­ble ten­der­ing com­pe­ti­tion. Fa­cil­i­tat­ing their strat­egy to ex­tri­cate 330,000 homes from the orig­i­nal NBP strat­egy favour­ing its own com­mer­cial roll-out scup­pered Siro.

These de­par­tures ef­fec- tively drove the tax­payer NBP ex­po­sure through the roof, by leav­ing it with only one pu­ta­tive oper­a­tor.

But then even the re­main­ing bid, which had the cred­i­bil­ity of a con­sor­tium led by both Enet and SSE, pro­ceeded to fall apart over the sum­mer as the con­trac­tual dead­line loomed.

First it was SSE, a pub­licly listed UK util­ity gi­ant with mas­sive au­to­mated billing sys­tems. It has a sig­nif­i­cant foothold in the Ir­ish elec­tric­ity mar­ket through Air­tric­ity.

But then the whole­sale oper­a­tor – and ISIF-owned – Enet it­self dis­ap­peared from the fi­nal con­sor­tium, leav­ing us with the lead role of Grana­han McCourt Cap­i­tal.

All in­cum­bents came to the same con­clu­sion, that ex­e­cut­ing 110,000km of fi­bre-op­tic ca­ble into the most re­mote parts of the coun­try would cost in ex­cess of €1.5bn, with no guar­an­tee as to the num­ber of cus­tomers tak­ing up the ser­vice. They aban­doned up to €10m each on wasted ter­mi­nated ten­ders, rather than put good money af­ter bad.

They con­cluded reg­u­la­tory and gov­er­nance cri­te­ria didn’t pro­vide a sus­tain­able busi­ness case for share­hold­ers. They can’t all be wrong.

De­spite hav­ing skin in the sec­tor, they re­lin­quished the op­por­tu­nity to lever­age their es­tab­lished net­works of telecom­mu­ni­ca­tions as­sets into

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