If we are investing €3bn in delivering rural broadband it should remain in public hands

Seán Sherlock TD
23 October 2019

Ceann Comhairle,

I move the motion.

I am sharing time with my colleague Brendan Howlin.

The Labour Party believes that if the Government is to spend over €2.9 billion of public money on a broadband network, over 25 years that such a network should be owned by the State.


You’d have to look long and hard to find anyone outside of the Government who would disagree with that.


The question of rural broadband is not about whether we should deliver it.

Everyone agrees that we should have comprehensive broadband for every home and business in this country.


Everyone wants the benefits that it will bring, and Labour wants equality of access to high speed broadband across the country.


But this will be nearly €3billion given to a private monopoly, which will own the network forever and the proposed contract will last 25 years, but what then?


The private monopoly will then be in a strategic position to charge significantly more to users.


We are not so much as selling the family silver as paying someone to take it off our hands.


Generations to come will wonder at the ineptitude of handing over such a strategic asset to the private sector.


Fine Gael will have to answer for this in a General Election – why are they committing to hand over a network, we will pay for, where the risk has been all but removed, to a private operator.

The purpose of this motion is for the Dáil to make a clear statement on where we stand on ownership.


In a Dáil where decision making has become debased, this is now an opportunity for a meaningful vote on Thursday.


We will not be accepting the Sinn Fein amendment which makes a weak declaration on public ownership.


The Governments own counter motion neglects to mention that the gap funding model would only work if there was strong competition between bidders rather than the farce of a tender process we had.

The other possible ownership structure that was left on the table was discarded by this Fine Gael Government and is not mentioned in the Government motion.


That option was a full concession model where ownership would revert to the State.


So we know that the choice was made by Fine Gael Ministers to pursue this flawed model where the price has trebled from €1 billion to €3 billion.


In terms of public procurement seeking value for money on behalf of the public, what happened under this Government was not serious. It was a joke.


So let us remind ourselves of how we got to this point.

You cannot have a competitive process with only one bidder.

The argument that the remaining bidder is there simply because it outlasted its two competitors is not true.


First, Labour left two options on the table, a commercial stimulus model and a concession type arrangement.


Following a recommendation by Denis Naughten, the Government chose the commercial stimulus model or so called gap funding model.


Under this model the private sector would finance, design, build, own and operate the network, under contract to the Department.

In other words, this Government rejected the alternative full concession model, where the asset is handed back to the State after 25 years.


Denis Naughten said in his explanation that

“I am advised that under a full concession model, the entire cost of the project would be placed on the Government’s balance sheet, with serious implications for the available capital funding over the next five to six years.  Given that both models will deliver the same services and be governed by an almost identical contract(s), I cannot justify reducing the amount of money available to Government for other critical priorities such as climate change, housing and health, over the next six years”.


His advice turned out to be completely wrong.


The Minister chose a model that surrendered a publicly funded asset to the private sector – and yet still the cost of the project is on the public balance sheet and eats into the funding available for the rest of our capital programme.


Second, Minister Naughten decided to allow Eir to split out 300,000 profitable households from the rest of the population. Eir withdrew once it had secured this prize.


The ESB-Vodaphone bid (Siro) withdrew after that was allowed to happen.

The truth is that the terms of the State’s offer were fundamentally changed once Eir was allowed to redraw the map. Siro were more than entitled to leave at that stage.


What was left was Granahan McCourt bidding for the 500,000 hardest to reach households.

We saw this consortium reconfigure itself in various ways, including a State purchase of the remaining private shares in eNET from the consortium for an undisclosed price.


And then we found out about a series of meetings and dinners.


And now we are sleep-walking into confirming a disastrous deal, on no other justification than “I’ve started so I’ll finish”,  which pours public money into private pockets.


What the Minister needs to do even at this eleventh hour is to take this service in-house.


He should cancel the bid and instruct the officials in his Department to get on the phone and talk to the ESB about how the State can deliver broadband itself.


As a former bidder, the ESB will know exactly what is required to deliver broadband to the remaining 500,000+ households, and will have detailed knowledge of how it can use its own publicly-owned infrastructure of masts to deliver this.


We have every right to use the State’s own resources to deliver this plan.

No one doubts the importance of getting this plan delivered for households and businesses. Given the central importance of access to information and knowledge for social inclusion, personal development, equal access to goods and services, and a range of economic opportunities, the importance of providing broadband Internet to the whole population cannot be understated.


The Government talks up the risk of an unacceptable delay if the National Broadband Plan collapses.

But equally unacceptable would be a situation where private enterprises have so much monopoly power that the people end up paying far too much for the delivery of this vital service when State companies could have delivered it for a lower cost.


I would also refer those interested in further reading on this issue to the work and expertise of Prof Dónal Palcic and Prof Eoin Reeve from the University of Limerick.


Before I conclude, in respect of our motion, I also want to put on the record that our preference was to bring a bill, to put in law our view, and that of the members of the Joint Committee, that a broadband network that we will pay for must remain in public ownership.


However that bill was deemed not in keeping with standing orders.

Standing Order 179(1) says a bill which involves the appropriation of revenue or other public moneys other than incidental expenses shall not be initiated by any member, save a member of the Government.

We were not proposing to appropriate money.

The Ceann Comhairle’s ruling on our Bill is based on an assumption that, if the contract is signed but is frustrated because of a change in the law, then the State becomes liable to pay compensation.


But if no contract was signed before the bill became law it would be in keeping with standing orders.


I do not see how it is possible to say, as Standing Order 179 (1) appears to require, that the Bill does indeed involve the appropriation of public money unless and until we know as a fact whether or not such contracts have indeed been signed.


And, incidentally, if no contracts had been signed by the date of introduction of the Bill, it would take a great deal of persuading, that the actions of third parties subsequent to that date could make a Bill that complied with standing orders, out of order.


It seems to me that it would lead to an impossible situation if private members in drafting legislation, and the Ceann Comhairles Office in ruling on compliance, had to take into account not only the existing factual state of affairs but what may be a future factual state of affairs at the time a Bill is passed – but without evidence that any factual inquiry has been made to ascertain what the facts are or are likely to be.

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