National Broadband Plan will be a gamechanger for regional development – Minister Humphreys

7th May 2019

The Minister for Business, Enterprise and Innovation, Heather Humphreys, today welcomed Government approval to appoint a Preferred Bidder for the National Broadband Plan.

The National Broadband Plan is a key commitment in the Programme for Government and is a core component of Project Ireland 2040 which is the overarching vision for the National Development Plan 2018-2027 and the National Planning Framework.

Speaking at the announcement of the Preferred Bidder for the National Broadband Plan, Minister Humphreys said:

“The internet and digital technologies are transforming our world in every walk of life and in every line of business. In Ireland and globally the economy is becoming increasingly digitalised due to the wide range of economic activities enabled by information and communications technology. If we are not fully prepared for this fourth industrial revolution, then as a country we will be left behind.

“I warmly welcome Government approval today of a Preferred Bidder for the National Broadband Plan. This is an important step towards delivering high-quality broadband to every home and business in this country.

“I firmly believe this project will be a gamechanger for rural Ireland and will be critical to supporting the attractiveness of regional locations for investment. The provision of high speed broadband is as important for businesses today as electricity and water. 

“I have met numerous businesses across Ireland who are being hindered in their development by the lack of quality broadband. This reduces the ability to do business online and, in some cases, even to carry out simple everyday transactions such as using a card machine to make a payment. These are now basic requirements to run a business and as a Government we simply cannot abandon homes and businesses in rural locations where the private sector will not step in.

The Minister also noted the importance of the National Broadband Plan to delivering other ongoing Government strategies such as Future Jobs Ireland and the Regional Enterprise Plans.

“The National Broadband Plan will be vital for the delivery of Future Jobs Ireland as we prepare for the next stage of our economic development.

“High speed broadband will help diversify the rural economy and offer further options for flexible working arrangements, particularly remote working. We already have a number of companies in Ireland who offer remote working to their employees and this trend is only going to increase in the future.

“The ability to work in regional locations can help to take the pressure off our cities and can mean substantial savings for employees in terms of rents and property costs while also reducing the need to commute leading to a better work-life balance.

“Last year the National Competitiveness Council warned that the delivery of high-speed broadband across the country remained a clear, and ongoing, competitiveness concern. As a Government, that is a message we simply cannot ignore.

“The National Broadband Plan will be one of the largest investments in rural Ireland in the history of the State, akin to rural electrification.

“If it was cheap and easy to deliver high speed broadband up every laneway and bóithrín in this country, then the commercial sector would have done it a long time ago. That hasn’t happened and so today the Government has made the decision to intervene to ensure that over one million people in rural Ireland are not treated as second class citizens. We have made a decision to end what is, at present, a digital divide in this country between those who have broadband and those who do not.

“If we are serious about regional development then, as a country, this is something we simply cannot afford not to do.”

NOTES TO EDITOR:

About National Broadband Plan

The Solution

The appointed Bidder’s solution is to set up a wholesale open access company dedicated to the rollout of a predominantly fibre to the premises (FTTP) network in the Intervention Area, which will be capable of delivering a future-proofed high speed broadband network, initially providingservices of 150Mbps to the majority of homes and up to 1Gbps to heavy data users and Small and Medium size Enterprises.

The Technology

As required by the State Aid Guidelines for Broadband, the NBP procurement process adopted a technology neutral approach, i.e., it did not specify a fixed or wireless preference to address any market failure identified.

However, all three bidders proposed FTTP (Fibre To The Premises) based proposals, enabling them to meet the 30Mbps minimum speed requirements, and ensuring that the network is future proofed against advances in technology.

A mobile 5G service is not a suitable alternative to fibre to the home broadband, for many reasons as outlined by Comreg and others. Mobile coverage of 30Mbps to 99.5% of the country would require an additional 6,000 new masts around the country (double what we have now), would take over 10 years, would have insufficient capacity and signal would be significantly affected by home insulation, hills etc.

Following media and political commentary, a report was prepared by Analysys Mason (5 December 2018) at the request of the Department which re-examined the most appropriate choice of technology for the NBP Intervention and whether 4G and 5G mobile or fixed wireless access would be a better choice than the Bidder’s proposed solution based on fibre. 

The conclusions from that report were that FTTP remains the most appropriate approach for the NBP Intervention and that 5G Fixed Wireless Access (FWA) may be used in only very specific, targeted circumstances. In addition, in Analysys Mason’s view, 4G and 5G networks cannot match the Bidder’s proposed FTTP solution in all material respects: cost, quality of service, deliverability and future proofing.

The Alternatives

The government today also noted a number of alternative options which have been considered in recent months. From that work, it was clear that the analysis shows that all of the alternative options identified would take longer to reach 100% of the Intervention Area premises compared to the current plan (or in some cases 100% would never be achieved), may be more costly, in most cases would require a consultation on a new strategy as well as a new procurement process and State aid application, and may not provide the level of future proofing required under the Commission’s strategy, Connectivity for a European Gigabit Society. The relevant  paper is available here.

Consideration was also given to mandating an existing State body, such as the ESB with this function. The clear advice from the Attorney General was that this would be counter to both procurement law and state aid law for this to be done outside of a new procurement process. This view has been supported in separate senior level discussions in late 2018 on the NBP between the Department of Communications and the European Commission.

Ownership

As much as possible of the network infrastructure will comprise the re-use of existing poles and ducts, which NBI will lease from existing infrastructure owners. Infrastructure re-use in this manner ensures the State complies with State Aid guidelines, environmental sustainability best practice, and minimises costs.

Ownership of any other network assets procured by NBI will reside with NBI. NBI will be required to manage these assets over the lifetime of the project, and will be liable for the associated costs where network assets are required to be maintained or replaced.

Governance

There are a comprehensive set of protections and legally binding obligations set out in the Contract which include:

• A suite of key performance indicators to ensure the service is maintained appropriately
• Significant penalties to address under performance
• Substantial oversight arrangements to monitor progress, costs and take up etc.
• Extensive monthly, quarterly and annually reporting requirements on NBPco
• Significant checkpoint reviews at various stages in the project
• Standalone Board responsible for the ringfenced operations and day to day management of NBPco with Board required to report to Minister monthly/quarterly and annually.
• Ministerial appointee to the Board.
• Independent audit of accounts
• Charge over the assets of NBI for the duration of the Contract
• Ability to “step-in” to manage and direct build and operations where there are material compliance issues.

Project Timeline:

The rollout will commence in Q4 2019 with significant pre-mobilisation activities on going over the next number of months. While the majority of premises will be passed in the initial 5 years the overall rollout will be concluded within 7 years.

Statistics:

NBP stats

• Approximately 540,000 premises (plus new premises to be built)
• 1.1 million people (23% population)
• 56,000 farms (68% of national total of farms)
• 44,000 non-farm businesses (mostly small and micro)
• 674 schools

NBI’s plan to deliver

• Address 96% of land mass
• Broadband to 23% of premises Nationally
• Circa 540k premises
• any new premises built in the intervention area are included approx. 30k

The NBI network will involve:

• Over 1.5 million poles
• Over 15,000 km underground ducts
• Up to 146,000 km new fibre cable
• Running along 100,000 km of the road network
• 150Mbps broadband product available for consumers upgraded to 300Mbps by year 6 and 500Mbps by year 10
• Up to 1Gbps products for businesses, also upgraded to 2 Gbps by year 11 and incrementally beyond that.
• Primarily FTTH will be deployed, with 2% - 5% premises via a high standard wireless connection which will also be upgraded over time.

High Speed Broadband Map

County Coverage Statistics Q4 2018

*These figures represent planned rural deployment and will reduce once premises are passed.

Investment by County – please note this does not include VAT & contingency

Investment by County

The Department of Business, Enterprise and Innovation (DBEI) plays a key role in implementing the Government’s policies of stimulating the productive capacity of the economy and creating an environment which supports job creation and maintenance. The Department also has a remit to promote fair competition in the marketplace, protect consumers and safeguard workers.

For further information please contact Press Office, D/Business, Enterprise and Innovation, press.office@dbei.gov.ie or (01) 631-2200

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