Govt must be cautious with National Broadband Plan and not 'end up with another Eir'

A top academic says that there should be more oversight of the National Broadband Plan with strict penalties if targets are not reached.

Dr Paul Davis head of the Management group of the Faculty of Business in Dublin City University warned that the Government must be cautious of dealing with an investment company as there is a risk “that we will end up with another Eir.”

He told RTE radio’s Morning Ireland that the promises about governance for the plan seem very weak.

“When you look at what we did re ministerial appointments with the national children's hospital, where we had full control over the board and we were unable to control the costs and the runoff of the way that process was put in place, and now we have a private board with only one ministerial appointment hopefully reporting back on a monthly/quarterly basis.

“I'd like to see a lot more oversight and I'd like to see a lot more clarity on the way the contract is going to be structured to ensure we get these reports and also what penalties will be in place, not what subsidies, but what penalties will be in place for not achieving the targets that are set out.

We have to be cautious of the risk that this is an investment company and may take a more short term view of looking at turning the company over in a very short term.

“Most of the value in the company will be created in the first five to seven years when the initial infrastructure goes in, after that we're into maintenance, there's nothing in the contract to stop the company selling, therefore the risk is that the company will sell itself off within five or seven years or even sooner once the value is created and that poses a big risk that we'll end up with another Eir on our hands, outside control of the government and probably not succeeding in what we set out to do.

“When you look at what they're promising it is dependent on the Eir network so it's not dependent on what they're doing.

"They are dependent - that as much as possible of the network infrastructure means reusing existing poles and ducts - we have to assume that they're of a standard and that can be rolled out sufficiently and that, more importantly, Eir will want to do that for a reasonable price.

“If I was Eir and I was a wholesaler I'd be looking at this and saying I've got a sole bidder on the other side of the wholesale market, I'd take advantage of that.

“We have no idea what the final cost will be. This is a commercial decision, this is the Government saying this is what they believe it will be and hope it will be, but it will be a commercial decision.

“This may be what the government feels it is going to contribute to, this is not necessarily what it will actually cost in which case National Broadband Ireland may not have sufficient funds to pay Eir to do the business.”

Dr Davis warned that by the time the roll outcomes through, new technologies could be in place that would offer a cheaper solution so taking a technology-neutral approach is a risk.

“There's a high-risk strategy here of investing in something that we believe is technology neutral for 25 years.”

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