Broadband monopoly in rural areas ‘very likely’, committee hears

It is “very likely” Ireland is creating a monopoly on rural broadband through the National Broadband Plan, an Oireachtas Committee has heard.

Representatives from Comreg, the statutory body responsible for the regulation of the electronic communications sector, appeared before the committee on Thursday, which is examining the National Broadband Plan (NBP) process.

Green Party leader Eamon Ryan voiced concerns about the current state of the plan, and having only one interested party in taking on the project.

A rural monopoly would still be subject to regulation if found to have significant market power.

“Are we creating a monopoly? In large chunks of the country, in terms of future network ownership, once we sign this contract that’s the monopoly in place isn’t it?,” he said.

“We’re effectively creating a monopoly here, the actual ownership and use of the network is a monopoly for rural Ireland.

Jeremy Godfrey, commissioner for Comreg, agreed that competition could be an issue.

“It’s very likely there will only be one network in rural Ireland, which means it is less likely for network competition,” he said.

“A rural monopoly would still be subject to regulation if found to have significant market power.

“They could also be potentially subject to regulation if it turned out that contractual obligations could no longer ensure open access.

“It may be a monopoly but it would still have obligations under the contract.”

The NBP has caused considerable consternation since its inception, including the withdrawal of communications company Eir from the original tendering process after 18 months, and the shock resignation of former communications minister Denis Naughten after it emerged he held a number of meetings with David McCourt, Granahan McCourt’s chief executive.

The US-based investment firm is now the government’s preferred bidder for the contract.

The committee is now investigating how the process of selection and the current plan came about.

Under the plan, the total cost to the taxpayer is capped at just under three billion euro.

The roll-out of the scheme, which will bring fibre broadband to 1.1 million people across the country, will begin at the end of the year.

Eir told the same committee last month it is “certain” it could roll out a national broadband plan for Ireland for under one billion euros.

However, members of the government have since said that Eir’s figures “don’t add up”.

The opening statement made by Garrett Blaney, of Comreg, told the committee that a new EU directive allows member states to use a universal service obligation (USO) to provide broadband coverage even if it is uneconomic to operate, meaning a loss to the state.

Mr Blaney made clear that a USO cannot be used for rural broadband in place of the NBP.

The USO can only be used as a safety net and last resort for remaining coverage after commercial and public policy efforts like the NBP have been exhausted.

“The USO is not intended to replace the NBP or commercial roll-out but instead only to be used to ensure remaining premises can be connected where others cannot achieve this,” he said.

- Press Association

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