Q&A: Govt agrees €3bn National Broadband Plan, what next?

The Government has agreed a €3bn plan to roll out high-speed broadband to over 540,000 homes and premises in rural Ireland over the next seven years.

Here, Juno McEnroe outlines the agreement, its cost and the rollout plan.

How much will this cost and how long will it take?

The contract with National Broadband Ireland is €2.97 billion over 25 years.

This is to ensure a high-speed network providing 150 Mbs is made available in at least 540,000 premises, mainly in rural Ireland.

130,000 of these connections will be made in the first two years while 70,000 to 100,000 properties will then get access per year thereafter.

The conclusion of the initial contract, including legal issues, will take up until the autumn and the first shovels should then go into the ground.

Why has it taken this long to agree?

A plan to connect the whole country was flagged in 2010 and it was promised that there would be “broadband everywhere” by 2012.

By 2014, the then Fine Gael-Labour coalition proposed connecting 1,100 villages at an estimated cost of over €500m.

Officials say they did not include high-speed access for the entire country, market costs or maintenance of a network.

By December 2015, after assessing options, officials told the government broadband for over 770,000 premises could cost over €1bn. This was a pre-procurement estimate. However, providers Eir later successfully bid and removed over 330,000 private premises that were easier to connect.

The estimate for the state-backed plan suffered a huge loss with the more commercially viable premises out of reach for 25 years. This laid the ground for the much higher €3bn cost.

What is the plan to connect homes and premises?

The plan will bring bigger benefits than just Netflix. In the long run, the government says households will be able to access the likes of health services, while connections will also help local tourism and education.

Once up and running, customers will be offered bundles or packages, which will include television, phone lines or home security systems on top of broadband access.

A flat €100 connection fee has been agreed for all premises. It remains to be seen if out-of-reach homes could be asked to pay more on top of this. Services will be offered by different providers, but officials say the cost and options will be regulated and competitive.

Under the contract, connecting all homes could take up to seven years. Nonetheless, NBI must have a presence in every county within the first two years under the terms.

Speeds of up to 150 Mbs per second are promised, even during peak usage hours.

What will households actually pay once the network is rolled out to an area?

There will be a €100 connection fee, a flat rate for all parts of the country.

Connection must be complete within a limited timeframe or fines will apply. Different providers using the NBI connections will offer different bundles or packages, including broadband. Officials say users will get value for money by being able to switch providers.

If I live on the side of a hill in Donegal, will it cost me more to get high-speed broadband?

No, under the 25-year deal a property cannot be passed by NBI without being connected.

That is provided the owner or occupant wants broadband. If, however, one property is located several miles away from others, there may be a proposal for a wireless service as an alternative.

It is estimated that 1% to 2% of the targetted areas in the plan may go with wireless if fibre can't be connected to the property.

This could be down to infrastructure problems, such as rivers or roads or property rights. These exceptions could number up to 10,000 properties around the country.

Why won't the state own the network if we are paying a staggering €3bn for this service?

Officials say the cost of a state-owned broadband plan connecting the same amount of homes, with new infrastructure including poles and ducts and telecommunications, would cost “multiples” of the €3bn now set to be agreed with the McCourt consortium.

But undoubtedly, taxpayers will question why we are spending so much on a project that will be not be owned by the state. Instead, there will be an option to buy it out after 25 years.

Officials point to the fact that NBI are essentially renting Eir's infrastructure, including its existing 1.2m poles, to roll out the connections to homes. This rental agreement will make up an estimated €1bn of the total €3bn deal.

How confident are officials and the government that this plan guarantees 'value for money'?

Even senior civil servants behind closed doors have mixed opinion on this. The perception is the final cost is now multiples of what was flagged several years ago.

Not so, says the government, as the original estimate in 2014 of €500m was for 1,100 villages and not the entire country.

Furthermore, there are wider benefits, it is claimed, including allowing households the ability to work at home, savings on work travel time and download periods.

Privately, officials say, if completed in line with the contract, the broadband plan will “make Ireland the envy of Europe”.

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