European Commission approve €2.6bn state aid for broadband plan

European Commission approve €2.6bn state aid for broadband plan

The European Commission has officially approved Ireland’s controversial National Broadband Plan (NBP), under EU state aid rules, at a value of €2.6bn.

The commission announced that in its opinion the potential benefits to competition in the Irish broadband sector outweigh the negatives represented by the intervention of the State.

That decision removes one of the few remaining barriers to the enaction of the plan, the contract for which was previously awarded to National Broadband Ireland, the company representing the Granahan McCourt-led consortium, the sole bidder.

The EC’s competition commissioner Margrethe Vestager said that the scheme will “help households and businesses in areas of ireland where private investment is insufficient”.

The Commission assessed the plan under state aid rules and particularly its own 2013 broadband guidelines.

It said that the plan will eventually provide a network capable of supporting download speeds of at least 150 megabits per second, upload speeds of 30MB, and will aid to “stimulate the development of a modern digital economy” in rural Ireland.

Once established the state-subsidised network would offer wholesale access to private operators, thus incentivising private investment in providing online access in the various target areas, the commission said.

Current Communications Minister Richard Bruton welcomed the commission’s decision, saying the new plan will deliver high-speed broadband to 1.1 million people, while allowing remote working which will “ease congestion and reduce emissions”.

Mr Bruton said that the commission’s decision would allow the government to proceed towards the signing of the NBP final contract.

Without broadband it will be significantly more difficult to attract new jobs to rural areas and develop new enterprise opportunities and it will be more difficult to retain the jobs that currently exist in these areas.

"We will make sure that rural Ireland is not left behind,” he said.

Ireland’s NBP has been in the works since first being announced in 2012, and aims to supply high-speed internet to areas of the country where no such broadband connections are available and which the private sector has expressed no concrete interest in expanding into.

The plan was finally approved by the Government at a projected cost of €3bn last May.

However, it has been beset by delays and controversies, including the dropping-out of all competitive bidders apart from Granahan McCourt, and a series of undisclosed meetings and dinners between former Communications Minister and independent TD Denis Naughten and David McCourt, CEO of the successful bidder, which eventually forced Mr Naughten’s resignation in October 2018.

The NBP has also faced accusations that its tendering process was not fit for purpose, while private mobile telecommunications operator Eir previously told the Oireachtas communications committee that it could have delivered the plan for significantly less than its final-contracted amount.

Meanwhile, the plan that ownership of the NBP infrastructure should revert to private ownership after 25 years was the subject of harsh criticism in the Dáil, with the communications committee recommending that decision be reversed in a recent report on the matter.

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