25. Deputy Sean Sherlock asked the Minister for Communications, Climate Action and Environment his views on whether the national broadband plan will deliver actual broadband; the number of times he or his officials have met with tender companies for the project; the dates on which those meetings took place; and the reason one competitor dropped out of the tender process. (Question 42026/17 asked on 04 Oct 2017)
Deputy Brian Stanley: My question relates to the national broadband plan.
I want to raise with the Minister the fact that we have no timeframe for its completion, or even a tender date for the completion process. Does the Minister feel that he has sufficient control over the tender process, given developments in recent weeks? Will the cost to the State be excessive? I am very concerned about this.
Deputy Sean Sherlock: Can I just have some guidance before the Minister answers? I thought that this question was in a grouping, a Leas-Cheann Comhairle. How will this now be handled? Forgive me.
An Leas-Cheann Comhairle: It is a Priority Question.
Deputy Sean Sherlock: There are three priorities on the same issue, however, and they have been grouped.
Deputy Timmy Dooley: I would be happy to let the same question from all three of us be answered.
An Leas-Cheann Comhairle: The others can raise questions, even though their questions are not priorities.
Deputy Sean Sherlock: To be helpful, a Leas-Cheann Comhairle, Questions Nos. 23, 24 and 25 are all on the subject and are being taken together.
An Leas-Cheann Comhairle: They will get 18 minutes.
Deputy Sean Sherlock: Just to clarify, Deputy Stanley will respond to the Minister’s answers to him and then-----
An Leas-Cheann Comhairle: They will get 18 minutes and I will be sensible about it. We will go one-to-one for the first question, perhaps, and if time is running out for the other questions then maybe we can-----
Deputy Brian Stanley: I have only one priority.
An Leas-Cheann Comhairle: Was Deputy Stanley’s question No. 24 or No. 23?
Deputy Timmy Dooley: There is no point in myself and the Deputy standing up and repeating the same question. We can use that time for something else.
An Leas-Cheann Comhairle: Yes. Let us just be sensible. Starting with Question No. 23, the Minister will have sufficient time to respond.
Deputy Denis Naughten: I propose to take Questions Nos. 23 to 25, inclusive, together.
Before responding to the question, I wish to inform Dáil Éireann that, as of today and under the commercial stimulus provided under the national broadband plan, Ireland has now become a global broadband leader with 13% of premises outside of our cities now with direct access to pure fibre, 1000 megabits per second, super-fast broadband. I am not aware of any other country on the planet that has achieved this particular milestone.
The procurement process for the national broadband plan state intervention phase will select a bidder, or bidders, who will roll out a new high speed broadband network to remote and rural areas not served by commercial operators. The successful bidder or bidders will build, maintain and operate this State intervention network for the next 25 years. Last Tuesday, 26 September 2017, was the closing date for bidders to submit their “Detailed Solutions” in the procurement process and I can confirm that my Department received submissions from two bidders. These bidders were Eircom Limited and the Granahan McCourt, Enet, SSE, John Laing Group plc consortium. This is a significant and positive milestone in the process and the path to a digitally equal Ireland. The submissions received means that we are at the final stages of this procurement process. This complex procurement process is being effectively managed by my Department’s specialist NBP team. This detailed and extensive engagement has included over 150 hours of competitive dialogue between the NBP team and bidders, focused on the more than 2,000 pages of contract documentation provided to bidders. My Department’s specialist team is now evaluating these two submissions.
The Department’s team comprises a broad mix of expertise and experience which is ensuring a well managed procurement with the objective of delivering a quality and future-proofed solution for Ireland. The team is supported by expert consultants including KPMG, Mason Hayes Curran, Analysys Mason and Price Waterhouse Coopers. These teams include specialists in procurement, project management, engineering, commercial and financial analysts as well as legal advisors. There is also additional oversight in the form of a steering group, which oversees the strategy development, and a procurement board which oversees the procurement process. Both of these groups are chaired by my Department and comprise independent expert advisers. The National Development Finance Agency is providing specific assistance to the process as financial advisor to review the financial aspects of the project and act as an independent reviewer and evaluator on the value for money aspect of the national broadband plan. Just ahead of the closing date for “Detailed Solutions”, SIRO formally communicated its withdrawal from the national broadband plan procurement process. In doing so, however, SIRO remains strongly committed to its original commitment to invest €450 million to provide pure fibre broadband, 1000 megabits per second, to 51 towns across Ireland on an open access basis. As of the end of last week, some 100,000 premises have been passed by SIRO. Notwithstanding SIRO’s decision, the fact remains that this procurement process is a highly competitive one involving two strong operators in the telecommunications field. As the level of State subsidy required for the national broadband plan will be determined through the competitive tender process, it would be premature and not in the public interest to discuss costs while that procurement process is still in train.
When I was appointed Minister 16 months ago, only five out of ten premises in Ireland had access to high speed broadband. Today that is closer to seven out of ten premises and by the end of next year that will have risen to almost eight out of ten. By 2020, through a combination of commercial investment and State intervention, more than nine out of ten premises in Ireland, at least 91%, will have access to high speed broadband. Commercial operators have already committed to provide high speed broadband services, well above the minimum targets, to almost 1.8 million premises before 2020. This includes Eir’s commitment to 300,000 additional premises by end of 2018; Enet and SSE’s plan to provide high speed broadband to 115,000 premises in the west and north-west regions by 2019; SIRO’s plan to deploy to 500,000 premises in 51 regional towns; and Virgin’s plans to expand its high speed service to an additional 200,000 homes.
Just 12 months ago I released the 3.6GHz spectrum for auction. As a result Ireland is the first country to have successfully concluded a spectrum auction to facilitate the roll-out of 5G. We are therefore in the vanguard of Europe in deploying 5G nationally by both fixed and wireless operators. This allows them provide faster fixed wireless and mobile services to their customers. A number of the successful bidders are now looking to deploy fixed 5G and I have been informed by one company that it expects to cover 85% of the land mass of Ireland by 2019. This spectrum release clears the way for operators to enhance greatly the quality of existing services, extend coverage to new locations and more easily introduce market leading innovations and services across Ireland, in both urban and rural areas. In a welcome development, Imagine has already commenced the deployment of enhanced broadband services using advanced LTE fixed wireless technologies, particularly in rural and often more remote areas previously considered not to be commercially attractive. The other operators who secured spectrum - Vodafone, 3 Ireland, Eir mobile and Airspan - are actively developing their strategies so that they can commence commercial roll-out at the earliest opportunity.
While the commitments by commercial operators, underpinned by competition and technological advances enabling alternative and more cost-effective network and service deployment, has accelerated the delivery of high speed broadband services, the Government will continue to progress the procurement process under the NBP as quickly as possible. This will ensure the Government’s objective and commitment of providing high speed broadband to every premises in the country will be achieved. I am confident that the combination of existing commercial investment and State intervention will make Ireland an exemplar in Europe and beyond, in terms of providing high speed services to all citizens regardless of where they live.
An Leas-Cheann Comhairle: I will give the Minister some extra time because of the importance of this. It will be one-to-one now for the first three questions. I call Deputy Stanley.
Deputy Brian Stanley: The Minister spent a lot of time talking about what the commercial companies are doing, particularly with regard to what is already happening. This has very little to do with the State. I am aware that SIRO has committed to 51 towns. There is a problem when it comes to the 300,000 households now cherrypicked by Eir, however, because Eir has a stranglehold on matters. If one looks at any county in the country one can see exactly what Eir is doing with its mapping process. It is occupying positions on roads where there are groups of houses and villages but not getting to the hard to reach places. Eir already has the infrastructure in place and copper wire already running through many houses. The Minister and his officials have not thought this through very well. When it comes to long-term competition in the area of rural broadband, there is very little incentive for Eir, if it wins the contract, to ramp this up and roll it out speedily. It can do it as slowly as it wants and turn the roll-out of it on and off. It is in the command position because of the 300,000 households but also because it already has copper going to many rural homes. The Minister knows the reasons SIRO pulled out of the process. It was because of the competition aspect and it said so in its statement, but any competitor that would be in the race to get this contract would have to roll it out much quicker because Eir already has a cable going to a house. It is already getting €30 or €40 a month from that house.
An Leas-Cheann Comhairle: Thank you, Deputy.
Deputy Brian Stanley: There is no incentive for it to roll out the fibre quickly to the house for the reason that it will not get anything extra out of it, or very little, whereas any competitor would have to reach the household and connect the fibre to it to get any payment of any kind. I do not believe the Department has thought that through.
An Leas-Cheann Comhairle: I ask the Minister to observe the allotted one-minute timeslot.
Deputy Denis Naughten: First, and it is not me who stated this, because no one in this House has believed me when I have said it on numerous occasions, but Adrian Weckler, in the Irish Independent on 6 July, who stated: “It is very possible that much of the current private-sector fibre rollouts from Eir...and...SIRO [and now Enet] would not [have happened] without the spectre of the National Broadband Plan hovering in the background”. He is one of the experts in this field and not exactly a fan of mine. That is what he has said in this regard. Therefore, I would reject the Deputy’s comment.
The reality is that by the end of next year the vast majority of villages in Ireland will have up to 1,000 Mbps pure fibre, super fast broadband available to them. That would not have been contemplated 12 months ago. The Deputy said that the winning bidder, whoever that may be, may drag their heels, or that one of them may drag their heels on the roll-out. I will cite the example of the Eir commitment agreement that I have signed. There are quarterly targets set out in it and penalties built into it if the company fails to meet those targets. Whoever the winning bidder or bidders are, they will be tied into similar targets with similar penalties and funding held back until they achieve those targets.
Deputy Timmy Dooley: The Minister said that SIRO informed him just before close of business last week that it was not going to participate in this bid contract. The dogs in the street have known for the past six months that SIRO was not going to bid for this. That should have been no surprise to the Minister. Folklore has it that he was on bended knee to SIRO to remain in the race because he wanted to have at least the rules met with respect to having an effective competitive process. He does not have an effective competitive process now because it is down to two entities and there are two contracts to be awarded. That would be fine if we were speaking, to some extent, in isolation but the real losers here are the 520,000 households-----
Deputy Denis Naughten: No, 542,000.
Deputy Timmy Dooley: -----or 542,000 who are no closer to having broadband.
We have all sorts of experts and the Minister has identified them. Do we have a project management expert as part of that? The Minister listed an array of what he has at his disposal. Surely there is a project manager. Every project manager that I have met requires, as per project management 101, a start date and a finish date. Could the Minister enlighten us as to when the contract will begin? When will the contractor be able to put a shovel in the ground and begin the roll-out of broadband, and what is the projected end date? The Minister can have all the other fancy teams in place. He can dispute whether SIRO is affected by whatever. Adrian Weckler’s comments are all relevant but they are only relevant in the context of when this process begins.
Deputy Denis Naughten: The quicker broadband is delivered to rural Ireland, the better. If it comes on a hare’s back it cannot come quickly enough. We are all agreed on that. A significant amount of work has been done, which I will come to in later parliamentary questions, in facilitating the maximum deployment by the commercial operators in this regard. It is a complex procurement process. It is also an unusual one in that we are going through a competitive dialogue procurement process. It means that one is slower to sign the final contract, but it also means that the physical deployment will take place quicker.
As I have said previously, this is a 25-year contract. None of us can afford the mistakes that were made in the past in terms of the electronic voting machines or even the national broadband scheme which was obsolete the day it went live. Irrespective of what side of the House we are on, we are all committed to this. In fairness, every Member’s heart is in the right place on this but we have a significant challenge. We must get it right and we will get it right, and it will stand the test of time.
Deputy Sean Sherlock: I want to focus on the procurement process. Notwithstanding what I believe to be the Minister’s bona fides in seeking to get this project over the line, and I believe him to be genuine, we are getting bombarded with metrics, statistics and the use of a language that for many people who do not have broadband is indecipherable in terms of the political rhetoric around this.
The first question I have is very simple. Do EU rules on procurement allow the Minister to descope or make a tender less attractive to certain vendors, thus favouring others while the tender process is live? If SIRO has pulled out of this process, what is to stop it or any other bidder, who might not partake in this tender, from looking at the legal position and saying it signed up to a process and the Minister, the State or the Government has now made that process less attractive for it as a tenderer or bidder and why should it not take legal action to protect the investment and commitments it has made?
The public is confused and I am confused because I do not believe that the transparency and the information that we require on this is adequate at this time. I do not believe it is right for the Minister to use the cover of the fact that this is a competitive tendering process. As Deputy Dooley said, it is down to two entities at this stage. The Minister can hardly use the cover of the tendering process in the language he is using to explaining the process itself. What were the original EU rules on procurement? What was the language that was used by the State in regard to the EU so as to protect those people who have now come out of the process on the basis that the original tender is less than what was articulated and advised to them in the first instance?
Deputy Denis Naughten: I thank the Deputy for acknowledging the fact that we have now moved from a situation where the proposed intervention area, which comprised 900,000 premises across rural Ireland, is now down to 542,000 premises. The European Commission has been kept fully updated on an ongoing basis on all of this. It is fully conscious of every aspect of this, from the pre-notification decision that was made in July 2015. It is being kept fully information throughout this process.
I wish to address an issue that has been raised by a number of people. It has been said that we do not have a competitive process because there are only two bidders in it. I will cite this example again. If one is building a one-off house in rural Ireland, one would probably go to one’s neighbour to price the cost of it and get a second price for it, and if a similar house had been built in another part of the country, one would ask the owner of that house how much they paid for the construction of it. That is what we have done here. We have two competitive bidders in the process. We also have independent advice on the likely cost. We know what the indicative cost of this will be, the level of State support that is required and what will be the bids that come in for it. We have a very competitive process. I, as Minister, am not going to undermine this. A predecessor of mine is still involved and named, and my Department is still named, in legal cases that are taking place in the courts. I am not going to go down that road. I am keeping a watching brief over this. There are specialist teams involved with this on a day to day basis and I believe the project, once the contract is signed, will deliver far more quickly than people expect. Further, it will deliver not just for the next five or ten years but for the next 25 years.
Deputy Sean Sherlock: The Minister did not answer the question about-----
An Leas-Cheann Comhairle: Let us have some agreement. We will take three short supplementary questions together and then have one answer from the Minister.
Deputy Timmy Dooley: If he has all the information and knows what the price is and that the companies have the capacity to roll it out, how in God’s name has the Minister found himself involved in such an intricate and open-ended scheme and that he cannot ask his own people to give us a beginning and an end in terms of the process? While the process remains open-ended, the Minister knows full well that it probably will not be completed by the time he leaves office. That he wants to protect the State is a fine statement for the Minister to make - so do I - but at some point he has to do his business or get off the pot. The reality is that households, young people, businessmen and farmers are crying out for access to this service. They are looking in here and wondering how it could be so complicated because the Minister keeps telling us that he has all this information and that it is a matter of picking one or the other to do it. He has done his deal with Eir, which will roll it out to 300,000 homes in a flash. Surely to God it is not beyond the Minister’s capacity or that of those in his Department to identify one or two people to deliver this and get it done.
Deputy Brian Stanley: The Minister has been saying for a week that the tender process is competitive and everything is okay with it but he knows and I know that it was significantly skewed once SIRO pulled out. It is also skewed by the fact that Eir has gone in and cherry-picked the 300,000 households. I welcome every connection that is made. We want to see connections. However, if a county council wants to put a new front door on a house and the front door costs €501, it has to get three tenders for it. Any public body or local county council doing that type of work would have to get three tenders for it. Here we have a multi-million pound project with hundreds of millions of taxpayers’ money going into it, but we have no control over it and this House, the democratically elected Parliament of the State, has no answers at this point, and we are this far down the road.
The reason it is complex is it is a muddle and a mess. I told the Minister that this has become the plaything of capitalism. It is no longer a State broadband scheme. All the taxpayer will do is shovel the money into it. That is my concern. On its roll-out, the 300,000 Eir households will not cover huge areas that are awaiting the national broadband plan. A constituent of mine who is living between Geashill and Mountmellick and is running a business has almost no broadband. It is chronically slow. Eir is rolling out to within 800 m of that business but it cannot get coverage across the length of six football fields. This constituent contacted the Department directly and was told that the Department thought it would take three to five years before they would get it. These people cannot wait five years. The businesses in counties Laois and Offaly and other counties throughout the country cannot wait five years for it.
Deputy Sean Sherlock: The Minister mentioned the auction for the 3.6 Ghz spectrum, if I am not mistaken. I would like to know the justification for it. My understanding is that there is not a definitive definition of 5G at this point in time. There is no proper definition because the technology is moving at such a quick pace and the innovation cycle is getting a lot shorter. What is the justification for the auction? What permutations will that auction have and how will it impact the provision for communications for the Garda and the emergency services in the country? Will they be adversely affected as a result of the auction?
We have not had in the Minister’s own words an explanation or an understanding from his perspective as to why one of the bidders pulled out. We have read a lot in the press but we, in this House, as I understand it, have not heard directly from the Minister himself as to his perspective on why SIRO pulled the plug.
An Leas-Cheann Comhairle: I call the Minister.
Deputy Sean Sherlock: In his own words-----
Deputy Denis Naughten: Deputy Sherlock can read the blacks of last week when I read exactly the reason. As I have said here today, it was a commercial decision that the company took and, as the Deputy knows, it uses a different route to the door to that of the other two bidders.
Deputy Stanley spoke about the requirement to have three tenders. That is grand when we know what type of a door we want and how many windows and panels we want in it. We are not dealing with that.
Deputy Brian Stanley: We do know what we want.
Deputy Denis Naughten: The Deputy does not.
Deputy Brian Stanley: This has been debated here for six years.
Deputy Denis Naughten: This is the fundamental difference. What we are doing has never been done anywhere else in the world. I am open to correction on this but, as of today, we have broken all records. Some 13% of premises outside of our cities have access to pure fibre. This is not happening anywhere else in the world. We are at the cutting edge. Vint Cerf, who was at the Digital Data Summit on 16 June, said that Ireland is working on “one of the hardest problems” we know about, which is a “[h]ighly distributed, highly rural, low density population”. He continued, “So your success in this will be a real beacon for other populations that have this similar sort of rural population.” The globe is looking at what we are doing.
It is a different procurement process, which adds to the challenges, but this is about a 25 year contract. It is not just about the here and now but the medium and long term as well. We do not want a system that is installed and obsolete before it becomes operational, as has been the case in the past. Public money was spent on electronic voting machines and the personnel, payroll and related systems, PPARS, which was obsolete before it even went live. We will have a system that not only meets the needs of the current generation but future generations of this country, particularly those in rural parts of Ireland. We will have a situation where the people of Ballymacward by this time next year will have better broadband than is in Brooklyn, New York.
Deputy Sean Sherlock: I asked a question about the auction of the 3.6 Ghz spectrum.
Deputy Denis Naughten: It will not have any impact on the emergency services. It is being auctioned by ComReg and allows for the deployment of the new innovative technologies. Initially it will be 4G plus, but trials are already being proposed on 5G. There will be pilots by some of these companies.
Deputy Sean Sherlock: What is 5G?
Deputy Denis Naughten: It is 300 Mbps.
An Leas-Cheann Comhairle: The Deputy and the Minister will have to have a chat afterwards.