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Dáil
‹ Leaders' Questions

Broadband network ownership

Summary

Deputy Howlin challenges the Government’s decision to use a privately owned, gap-funded broadband model, warning that taxpayers may ultimately have to reclaim the network. The Taoiseach argues that private ownership will incentivise upgrades, extend high-speed access to 750,000 premises and release State funds for other priorities.

Can the Taoiseach explain the rationale that led the Government, yesterday, to approve the gap-funded model for delivering broadband? This will entail a 26-year contract with private providers, at the end of which the networks will be privately owned. The reasons publicly given for the decision were that this would be cheaper than direct State funding and would be off balance sheet so as to free up capital spending elsewhere. We have poor broadband in this country, particularly in rural areas, because of the decision by Fianna Fáil to privatise Eircom in the biggest economic mistake this country made until Fianna Fáil's even more disastrous mistake in giving the blanket bank guarantee in 2008. This Government is about to repeat that mistake. Just as the State was ultimately required to buy back the West Link toll bridge for €600 million, ensuring that the private company, National Toll Roads, received a staggering €1.15 billion return on its investment of €35 million to build the bridge, as estimated by the Department of the Environment, Community and Local Government, we will ultimately have to reacquire the broadband infrastructure in exactly the same way.

Fine Gael agreed with the Labour Party that vital infrastructure networks, such as the electricity and gas distribution networks, should be kept in public ownership. We came to that agreement over the past five years, albeit after a battle, but now that understanding of the importance of the distribution systems for a vital resource seems to be gone.

As the Taoiseach knows, the previous Government had two options when we decided this last December. One was the model he decided on yesterday, the so-called gap funding model, or a full concession model whereby the asset, after the 25 years, came back into public ownership. Will the Taoiseach accept that yesterday's decision is short termism and not in the public interest? Will he agree that all relevant documentation and all the advice given to Government on this matter should be laid before this House in order that we can make a collective determination before this matter is finalised?

Comment on this
Enda Kenny The Taoiseach Fine Gael

We do not intend to repeat what happened with Eircom. This is not a publicly owned system. What is involved is extending broadband for the last mile to many businesses and houses in areas throughout the country that are deemed not to be commercially viable. It is an extension of the existing system. It is not a national publicly owned entity like the Eircom network. That is the first point.

The second point is that a choice has to be made. If we leave a situation where the State takes over the assets after 25 years, there is no incentive on whatever company or companies that own that system, from the tenth or 15th year onwards, to upgrade it, keep it in good shape and have it ready for handing over to the State. Why would they?

The intention is to be able to provide more than 750,000 individual premises with high quality, high speed broadband. That will deal with 100,000 kilometres of road network and 96% of the land mass of the country. That is what is involved here. It is anticipated that a contract will be awarded in 2017.

Deputy Howlin was an esteemed member of the Government dealing with public expenditure and reform and he knows that the choices to be made are always difficult, but in terms of the choice here, if we go for a fully owned public model, as the Deputy points out, the efficiency and the reduction in costs in the gap model adopted by Government yesterday on the recommendation of the Minister for Communications, Energy and Natural Resources allows for serious sums of money to be spent on other issues like schools, primary care centres, hospitals and so on. That is a choice that has to be made, and the Government made its choice clearly, but I repeat that this is not a national publicly owned entity. This is an extension of privately owned facilities, and for that reason, the Government came down on the side of the gap funding model proposed by the Minister for Communications, Energy and Natural Resources which will result, by independent regulation, in premises and businesses having access to that during and after the 25-year period but also to allow for the saving of serious sums of money that can be spent on other facilities people need throughout the country.

Comment on this

Nobody would dispute for a second the essential nature of rolling out broadband. That is why it features so heavily in the capital plan the previous Government adopted. The issue is the ownership of the network. A briefing document on ownership was distributed by the Department yesterday. It was a net decision on ownership. The Taoiseach says it will not be another Eircom. I believe it will be. If it does not remain in public ownership, we will be required at some stage to take it back into public ownership.

I was fearful, when this issue was divided between two Departments, that it would not be taken as seriously as it should be. Does the Taoiseach not accept that there were two proposals to Government yesterday? The first was the commercial stimulus or gap funding model which would see private contractors having ownership of the network at the end of the 25-year period, and the second was a full concession model. The Government's document states that the asset is handed back to the State after 25 years under the second model. Why was that model not accepted?

Will the Taoiseach put all the documentation before the House so we can see the basis for the decision and in the spirit of new politics - so-called - that we can have inputs in to making the correct long-term decision for the people of Ireland?

Comment on this
Enda Kenny The Taoiseach Fine Gael

The Deputy seems to have the documentation there, if not all of it, and I will see that the Deputy receives the rest of it. The point is that the Deputy is either mistaken or is being deliberately misleading. Deputy Howlin knows that the network is not a nationally owned public entity.

Comment on this
Seán Sherlock Deputy Sean Sherlock Labour Party

But what is going to be rolled out is.

Comment on this
Enda Kenny The Taoiseach Fine Gael

The extension here is an extension of privately owned facilities to provide access to proper broadband speeds for 750,000 individual premises.

Comment on this
Seán Sherlock Deputy Sean Sherlock Labour Party

Financed by the taxpayer.

Comment on this
Enda Kenny The Taoiseach Fine Gael

The choice the Government has to make, and had to make, is this: if one wanted to be a fully owned public entity after 25 years there is absolutely no incentive whatsoever on the company or companies to upgrade and improve that facility-----

Comment on this
A Deputy

There could be an obligation.

Comment on this
Enda Kenny The Taoiseach Fine Gael

-----for handing over to the State in the latter part of that. The opportunity-----

Comment on this
Enda Kenny The Taoiseach Fine Gael

-----based on the decision made by Government, on the recommendations of the Minister for Communications, Energy and Natural Resources, is one that would allow access to an upgraded and proper facility-----

Comment on this

Will the Taoiseach allow us to-----

Comment on this
Enda Kenny The Taoiseach Fine Gael

-----for all those businesses-----

Comment on this

I thank the Taoiseach.

Comment on this
Enda Kenny The Taoiseach Fine Gael

-----throughout the country, and at the same time allow for significant amounts of money to be available for spending in other areas that we have all been-----

Comment on this

I thank the Taoiseach.

Comment on this
Enda Kenny The Taoiseach Fine Gael

-----contacted about such as schools and hospitals-----

Comment on this

It is short-termism.

Comment on this

We need to conclude Taoiseach.

Comment on this
Enda Kenny The Taoiseach Fine Gael

-----and primary care centres, roads and facilities throughout the country. That is the choice-----

Comment on this

Will the Taoiseach allow the matter to be debated?

Comment on this
Enda Kenny The Taoiseach Fine Gael

-----and the Government has made its choice.

Comment on this