The construction by the State of its own rural telecoms network, at a likely cost of hundreds of millions of euro, is one option being considered by the Government as part of its delivery of the National Broadband Plan.
A draft plan for intervention by the State, which has promised to bring high-speed broadband to every home and business in the country by the 2020, lays out five options for ownership.
These range from one where a company is given a State subsidy but retains ownership of the network, to a 50/50 joint venture, through to one where the public sector builds, finances, owns and operates the network itself.
The draft strategy published by the Department of Communications, Energy and Natural Resources, says that while the option where the State would subsidise but not own the network looks the most affordable and practical option for the State, it is too early to say which is optimal.
Although former communications minister Pat Rabbitte last year put the cost of delivering the plan at up to €500m, the department will not divulge what its current estimate is.
However, officials say that estimate was based on a model where the State would subsidise the capital costs of the network, but the company would own the assets.
But if the model adopted was one where the Government built, owned and operated the network, it would cost considerably more, departmental sources say.
Around 750,000 premises or 38% of the population are in areas where there is no high-speed broadband, and where private operators say they do not intend offering it because it is not commercially viable to do so.
Therefore the Government has said it will step in to provide a high-speed broadband service to every premises in the country by the end of 2020.
Its draft intervention plan sets a number of objectives, including that the service must be high-quality, reliable, affordable and available from a range of service providers, who in turn will have to provide a range of product options.
The service will have to be future proofed, with bidders for the contracts having to set out in advance how they will achieve this.
The proposed plan also requires that the service provides value for money for the State’s investment, at the least cost possible for the exchequer.
The draft strategy states the service will have to offer a constant minimum download speed of 30Mbps, a minimum upload speed of 6Mbps and be available without interruption 99.95% of the time.
It also aspires to the delivery of a high-speed broadband service to every premises in the country by the end of 2020, with 60% of premises in the intervention area connected by the end of 2018.
But it also recognises that between 1-2% of premises may be so remotely located that delivering a service may prove prohibitively high.
The strategy proposes that bidders who achieve as close to 100% coverage as possible will receive higher marks, as will those who propose alternative solutions to providing a service to those premises in the remotest of locations.
“Since becoming Minister for Communications, my approach has been to honestly point out the scale and challenge of the project we are delivering,” Alex White said in a statement.
“It takes time and detailed planning to deliver a programme of this scale and ambition. It is an infrastructure for the future. We will only be doing it once, and we intend to get it right.”
Under the proposals, services offered must be affordable on both a wholesale and retail basis, with affordability measured by benchmarking with similar services outside the area where the state is intervening, to ensure an urban rural divide does not emerge.
It may, however, be necessary for the operators to offer higher speed services to businesses that want them, although they will likely have to pay extra for them.
The draft plan proposes that any state-funded network should be open to all telecoms retailers on a wholesale basis, with regular reviews to ensure consumers are getting affordable prices.
All orders for connection to the network in an area where the state has subsidised access will have to be completed within 12 weeks, with 90% provided within eight weeks and 80% within two weeks, it says.
While new houses built during the minimum 20-year period of the National Broadband Plan contract will also have to have access to the service, the draft proposals state, although where construction costs are high broadband providers could be able to charge a connection fee.
The strategy does not specify by what method the broadband must be delivered, but it does envisage a system of penalties will be put in place to ensure targets and requirements are met.
Measures will also be put in place, the plan proposes, to ensure smaller local fixed wireless operators are able to compete with larger national or regional operators and incumbents when it comes to offering retail services.
The plan suggests a single tender process, with the country divided up into at least two to three equal areas of population which can be bid for.
Bidders will also be able to tender for the entire area across the country where the state proposes to intervene, but those doing this must also bid separately for the two to three individual lots.
The draft strategy is now being opened up to public consultation, which will run until 14 September.
After that an updated version of the map showing which areas require state intervention in order to bring them high speed broadband will be published in November, before procurement gets under way at the end of the year, and contracts are concluded by mid 2016.
The department’s hope is that the first premises will be brought online by the end of 2016.
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