Joint Committee on Transport and Communications debate -
Wednesday, 26 Sep 2012

National Broadband Plan for Ireland: Discussion

Chairman

We are now in public session. The purpose of today's meeting is to discuss Government plans for the nationwide roll-out of broadband provision, as announced by the Minister for Communications, Energy and Natural Resources, Deputy Pat Rabbitte, under the heading Delivering a Connected Society - A National Broadband Plan for Ireland. I begin by welcoming our first group of witnesses, namely, Mr. Conal Henry, chief executive officer, and Mr. Niall Beirne, head of marketing, from e|net; and Mr. Maurice Fitzgerald of MKC Communications. Witnesses are advised that by virtue of section 17(2)(l) of the Defamation Act 2009, they are protected by absolute privilege in respect of their evidence to the committee. However, if a witness is directed by the committee to cease giving evidence in regard to a particular matter and he or she continues to do so, that witness is entitled thereafter only to a qualified privilege in respect of his or her evidence. Delegates are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Witnesses are further advised that the opening statements they have submitted will be published on the committee's website after the meeting.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable. I now invite Mr. Conal Henry of e|net to make his opening statement.

Mr. Conal Henry

I thank the Chairman and members for the opportunity to put forward our views, as representatives of e|net, in regard to public policy in the area of broadband provision and the roll-out of metropolitan area networks, MANs. Members will have received copies of our PowerPoint presentation, which I will go through now. The first slide sets out a brief history of the MAN project, what has been achieved to date in this regard, and our view on how it has affected public policy. Unfortunately, parts of the slides are obscured from view.

There is not a huge amount of detail available on them, but, as well as being an aid for members, they help to remind me of what I am saying.

The company that runs the State's metropolitan area network, MAN, infrastructure is e|net. There are 94 such networks in towns and cities across Ireland. They were deployed in areas in respect of which it was agreed between the State and the European Union that there was a market failure in the provision of telecommunications infrastructure. They operate on what is termed a wholesale open-access model. The critical point is that e|net does not provide services directly for consumers, which means people cannot contact us by telephone in order to purchase access to broadband services. That is why one will never see e|net logos, brands or advertising throughout the country. This may be the reason people are of the view that there is a low profile to the business. It is a wholesale business and our customers are the telecommunications operators. We focus very much on ensuring the latter provide services on the metropolitan area networks.

The company's headquarters are located in Limerick and it employs 51 people. That number has risen significantly in the past couple of years. I will not go into too much detail on the history of the company. We have, however, been operating the metropolitan area network infrastructure since 2004, when we won the first licence to do so for a period of 15 years. We won another licence in 2006 to service a further 66 towns. In 2008 and 2009 we conducted an analysis of the impact of the metropolitan area networks on the first 27 towns in which they were put in place. We discovered that in the five years before the networks were put in place, the towns involved were winning approximately 22% of new IDA Ireland-foreign direct investment jobs. In the three years after they were up and running the average figure in this regard was above 80%. The impact of metropolitan area networks in attracting foreign direct investment and related jobs to towns such as those to which I refer is significant.

One of the points I would make on e|net and the metropolitan area networks is that I do not believe the latter have solved all of Ireland's broadband problems. In addition, I am not stating Ireland does not have problems with broadband. However, the networks have been a significant policy success in the context of the increasing competition in regional areas, reducing the cost of telecommunications in these areas and bringing jobs to them.

I will now comment on how the networks operate. The company - e|net - sits in the middle of a complex operational arrangement. Where we sell services to licensed telecommunications operators, we provide them on the metropolitan area networks. We also use other networks connected to the metropolitan area networks to Dublin in order to ensure the traffic on the metropolitan area networks actually gets to the capital and onto the Internet. The networks remain at all times in the ownership of the State. Technically, ownership of each metropolitan area network rests with the relevant local authority. Therefore, ownership of the Cork MAN rests with Cork City Council and Cork County Council. The networks are publicly owned. We have spent considerable amounts of money on maintaining and extending them and such extensions also remain in public ownership. We have actually built the equivalent of two new metropolitan area networks with moneys procured from our own shareholder funds, but these remain in State ownership. That is part of the return to the State. There is also the fact that the networks have been enhanced to a considerable degree since we assumed responsibility for them.

We have a very strong policy partnership with the Department of Communications, Energy and Natural Resources. We are obliged to operate the metropolitan area network infrastructure in an open-access, carrier-neutral way to ensure all operators are treated in the same way. Our achievements in the areas of jobs, competitiveness and the cost of telecommunications are demonstrable. It is a very useful model and platform through which policy can be developed. It is our opinion that metropolitan area networks and e|net, in partnership with the Department of Communications, Energy and Natural Resources, have done a good job in dealing with the policy challenges in 2004. We stand ready to help and provide support in dealing with the policy challenges which emerged in 2009.

On how e|net fits into the telecommunications market, if members look at the top part of the diagram on the slide on display, they will see that we are all consumers of communications services. We all use broadband and actually use the communications market for many more purposes than used to be the case. For example, 20 years ago people probably only used it to make telephone calls. Then they began to use fax machines and after that they stated to access the Internet via dial-up connections. Most of us now spend a large part of our time on these networks. We use them not just for telephony but also to access broadband services. The metropolitan area networks are also increasingly being used for entertainment purposes. UPC, one of the major cable TV operators, is distributing its entertainment content via the networks. This is going to become much more common. These are the services that are being deployed over the networks.

Between us and the services to which I refer are the service providers. Members will have heard of most of these operators, both large and small. We have named a few of them - Eircom, Vodafone, O2, 3, UPC, Imagine, Cable and Wireless, Verizon, BT and Smart - on the slide on display. Members can see beneath that list of names a much smaller group of companies and entities which actually operate networks. There are a lot fewer networks in Ireland than there are operators. Networks are critical; they are the roads and the operators are the trucks. There are plenty of truck operators, but there are not as many road networks. In Ireland there are five networks of varying geographical extent. The primary network is that operated by Eircom. This is an incumbent network which theoretically reaches every home and business in the State. BT's network is extensive in Dublin and also runs along the railway lines. Electric Ireland, in the form of ESB Telecoms, ESBT, has a telecommunications network which runs along its main high voltage infrastructure. UPC has a cable TV network that is extensive but only in the major urban areas. Infrastructure is provided by e|net in 94 regional towns, in most of which the only other network available would be that provided by Eircom. However, this is provided on a different basis. Underneath this again there is a great deal of State-owned infrastructure that is very useful in deploying telecommunications infrastructure. For example, CIE can put fibre in place along its rail network, Electric Ireland has it across its electricity network, Bord Gáis has a telecommunications subsidiary, Aurora, the NRA has ducting which is very useful for telecommunications networks and there is a company called Shared Access which works with the OPW to provide telecommunications infrastructure.

There is a complicated layer of telecommunications in Ireland and e|net is very much focused on the provision of telecommunication networks for other telecommunications service providers. The next slide contains a list of some of its customers. If someone is operating in any of the 94 regional towns to which I refer and accessing any of these services, he or she is probably using a metropolitan area network without realising it. I want to try to nail one of the myths that nobody uses the metropolitan area networks. They support 3G mobile coverage, cable TV and normal mobile coverage. Certain high profile retailers are connected to the networks and if one is making a credit card payment in one of their shops, the traffic in this regard is carried across them. The networks are in the background and if we decided to switch them off in the morning - we have no intention of doing so - people would lose mobile signals, credit card payment details, TV signals, etc. Their disappearance would be very noticeable. As a result of the fact that e|net does not have a really recognisable brand and that the metropolitan area networks are often connected indirectly to consumers and businesses, what we do is not so noticeable. This has been a problem for us as we have developed the business. Many believe the networks are in the ground unused, that they are very expensive to use and so on, but that is not the case. The cost of using them, benchmarked against that of any other fibre infrastructure anywhere in the world, is hugely competitive. It is important to realise that metropolitan middle mile infrastructure, which is what the metropolitan area networks are, was not necessarily intended to bring directly connected fibre to every home and business in a particular town. This infrastructure was put in place in order that all the different types of telecommunications services could be connected to it and that we could inject lower cost and higher performance into the networks through the use of that fibre.

I referred to jobs. The next slide shows some of the regional, high value foreign direct investment companies connected to the metropolitan area networks.

I will mention two, EA Games and Northern Trust, that announced jobs in recent weeks, which are end users of the MANs. They will buy services from one of our customers. We do not sell to EA Games or to any of those companies. Our customers sell to those and we find that they enjoy those services.

A significant proportion of the public sector and public sector premises are using the MANs and have been able to reduce the cost of their communications significantly. If the telecommunications costs of regional public sector entities were reduced by 10% to 15%, which we think the MANs may well be supported in doing, that alone would be enough to pay for the investment that was made in the MANs in terms of the original founding investment. A great number of public sector entities are getting their communications services better and more cheaply than they did in the past. That is as much as I want to say about e|net and the metropolitan area network infrastructure.

I may be telling members something they already know but I want to share my views on why we think broadband is important and why broadband as an area of policy is one that cannot simply be left to the market and forgotten about. The most important aspect of broadband as a component of the economy is that it is a proven driver of economic growth. We have a number of studies on a range of different, important and well-respected economic analyses - if members would like to read them, I have a booklet I can share with them - showing that high quality broadband will increase the economy somewhere between 1% and 2%. I do not need to remind members that an extra 1% to 2% growth may well be the difference between our doing or not doing the IMF plan. This is an engine for economic growth and that has proven to be the case. If one thinks about why that is the case, one will note that many of the world's markets are moving online. Members will know this as they purchase products online. They buy tickets online. The economy is moving online. The better served this country is in that economy, the better it will perform in it. We have some problems in this area. We know that Ireland has an online balance of payments deficit. Irish consumers buy much more online than Irish businesses sell online. A business needs more communications infrastructure to sell online than a consumer needs to buy online. Much of this comes down to the quality of the communications infrastructure, which is a critical component.

I would explain this by asking members to reflect on the building of canals in the 18th century, railways in the 19th century and electricity infrastructure in the 20th century, and communications infrastructure is the critical national infrastructure for the 21st century. It will define the winners and the losers. The most interesting point is that by the end of each of those centuries, every country had its critical national infrastructure but the countries which got it first and built it best derived the most and the longest lasting economic advantage from it. The British built the canals first, the US built the railways first and they had a century of economic advantage from that, long after everybody else had caught up. It is the same with communications infrastructure. The countries that have the best communications infrastructure will attract the best communications jobs and companies, develop the strongest communications in the economy, and by the time all the other countries have an infrastructure to match, it will be too late. We really believe that.

The interesting point about broadband is that it is not only about the economy. There is barely an area of public policy that is not heavily affected by broadband and broadband quality. To take the example of health care, the only way we will be able to deliver health care in the 21st century is outside the hospital. We know that our hospitals cannot carry the number of sick people we will have in the 21st century. We need to look after our patients at home much more and the only way we will be able to do that is by new medical communications technology and the only way we will be able to deliver that is through appropriate infrastructure. The only way we can offer services like that is if those services are available on a ubiquitous basis.

Communications is a green technology in that we can significantly reduce our emissions through the use of technology such as video-conferencing and teleworking. We can significantly make an impact towards reaching our emissions targets.

In education we are already rolling out at 100 Mbs, and the Minister has talked about industrial strength broadband in schools, and that has a significant impact on education. The difference between reading Martin Luther King's speech on paper and seeing him on screen in a classroom giving that speech at the Washington Monument is transformational.

In terms of traffic on our roads, the gain that can be made is simple but powerful. If we could reach a point at which people were working from home on one working day in 20 - that could consist of one worker in 20 who works permanently from home, or all workers working one day in 20 from home - it would take 5% off peak traffic loads. Peak traffic loads define the size of the road network we need to build. If we can reduce peak traffic loads by 5%, we would probably get a two- to three-year break in road traffic growth. That is a significant economic break. This stuff drives the economy. It is critical for health care and education and has benefits in most public policy areas. It is an area policy-makers cannot ignore and I do not believe they are.

It had been policy for a long time that communications and communications infrastructure was a matter for the private sector. There is an important point in that respect. We have spoken about the benefits to the economy and to the State of next generation broadband or top quality infrastructure but a strange pattern globally in telecommunications is that most of that benefit is not coming to the network service providers.

To return to the example of members, if they reflect on the volume of communications services and communications networks they use and the amount that is spent on those compared with when they used those networks only to make phone calls, economically the average customer spends about the same now when they are practically living on those networks compared with what they spent on them in the past. For whatever reason and whoever is at fault, communications network service providers have not managed to earn any more revenue, despite the explosion in the use of their networks. The members will know this. They will know it from their bills, which are broadly in line with what they have been in the past.

With regard to the communications sector in terms of its revenue, the ComReg statistics track the size of the Irish economy. This explosion in the use of communications services and the quality of communications services has led to no growth in communications revenue. If one is trying to build new networks, that is a disaster because there is no upside, and that is difficult. We have felt for a long time that we are not getting new high quality communications infrastructure because of Eircom and its financial problems, and to an extent that is true, but there is a much more insidious underlying factor here, which is that the business case for communications service providers for new builds is pretty marginal, particularly where it is not competitive to build more than one. We believe this is an area that requires State intervention.

On EU policy, this is beginning to be understood and agreed in policy across Europe and globally. The EU, as part of its digital agenda for Europe, set targets that everyone will have basic broadband of 30 Mbs and up to 50% of consumers will be using 100 Mbs by 2020. If it is left to the private sector to achieve those targets, that will not happen. There is no business case to do that. There is a business case to do some of it but not to do all of it. What drives a business case is cost and revenue. This work will be done in areas where it is cheaper to deploy network and areas that are cheaper to deploy network are high population density areas.

The former Minister, Eamon Ryan, supported subsequently by the Minster, Deputy Rabbitte, commissioned the next generation broadband task force to examine where exactly the operators would have networks and to compare that with the digital agenda for Europe targets. Essentially the next generation broadband task force report, which I hope the members have read, states that the industry is certainly good for the first 50%. Therefore, 50% of homes and businesses in Ireland will have 100 Mbs quality broadband available to them by 2020, and that is great. That is as good as most countries are looking at. Not many countries, particularly the EU 27, are looking at much better than that. With regard to the other 50%, the last 30% are rural areas. It is very clear that there is not going to be any new provision of fixed line network there paid for by the private sector and that some form of State intervention is needed.

On the middle 20% it is less clear. These are the smaller regional towns, including Monaghan, Letterkenny and Drogheda. The first 50% essentially is Dublin, Cork, Galway, Limerick and Waterford. The middle 20% comprises our regional towns and the last 30% comprises rural areas. The larger urban areas will be okay and a policy intervention has been announced for the rural areas. The State will support the development of broadband networks to the tune of €175 million. In the other regional urban centres it is less clear how they will be addressed. We would have some concerns about those areas but there is no need to worry yet. However, policymakers need to keep an eye on it because no operator is announcing any fixed line development plans in those areas. It will take a new or upgraded fixed line network to deliver the kind of broadband homes and businesses in those areas will require.

The Minister's announcement of €175 million for the rural areas is an excellent policy. Having discussed this with other stakeholders in the industry, we believe that economically that should be enough to do it. However, only one thing will be built in these areas, and if that one thing is a monopoly, it would be bad. Whatever gets built with this €175 million, we need to ensure it is open and competitive and that all operators are allowed to provide services over it. Otherwise we believe it is very good policy. However, we remain concerned for the middle 20% of urban areas.

That concludes our discussion of e|net's stance on broadband policy and I would be happy to take questions.

Chairman

Mr. Henry drew an analogy with the canals and railway lines. Where does Ireland stand in that regard?

Mr. Conal Henry

In terms of infrastructure competitiveness, we are probably in the middle of the class and are not at the bottom of the table. We have a disadvantage in that our population distribution is very bad in terms of the cost of deploying infrastructure, which shows up in our infrastructure competitiveness. We are slightly in the bottom half of the EU 27, but we are improving.

Deputy Michael Moynihan

I thank the witnesses for their presentation. Mr. Henry is correct in saying that broadband infrastructure and penetration are vital for industry and personal use. People have made decisions on where to live based on broadband availability, and newspaper property advertisements often refer to broadband availability. Given the difference between broadband availability in large urban areas and other areas, it could give rise to an urban-rural divide. Some people have been willing to take extreme measures to get broadband at home. People want to work from home and Mr. Henry spoke about the one day in 20. Many more people would work one or two days a week from home if they had the cover. There needs to be a drive to ensure every community has broadband cover. I believe the Minister referred to it as the electricity of this generation. We saw the consequences of some places such as the Black Valley in Kerry being left to the very end.

Ireland lies 17th out of 27 in the European league and other countries are far ahead of us, not just in the large urban centres but right across their communities. We need to work hard on the issue and raise it to the top of the agenda. Mr. Henry has presented figures on industrial employment and uptake of jobs and so on, which confirm my opinion that those are based on the large urban centres with connectivity to top of the range broadband facilities. If we are serious about having a balance across the population, this committee needs to put its energy into ensuring it is throughout the country.

Deputy Michael Colreavy

I thank Mr. Henry for his very clear presentation. I live in Manorhamilton, a small town in north Leitrim which has a MAN. Many people were sceptical when the MAN was being installed in Manorhamilton. Mr. Henry talked about attracting new industry, but there is another aspect. Industry that was based in Manorhamilton long before the MAN would probably not have remained without that MAN infrastructure. Anyone living in the west or north west understands how essential a good communications network is. Traditionally, in all aspects of infrastructure there is very little north of a line from Dublin to Galway. The roads tend not to be as good and so forth. This is where there are some isolated pockets of industry, as opposed to farming villages or market towns, and these are spread throughout the west and north west. I do not believe we exploit them enough but we are very glad to have the MANs in Manorhamilton, Sligo, Bundoran and Ballyshannon.

Mr. Henry spoke about the vision for the future for the middle range of towns and more rural areas. Is e|net working with Government on the overall telecommunication plans and the different solutions? Is it working with Government on realistic timeframes for getting things done or does it just respond to requests from Government to do something? What is the level of information share between e|net, which has a vision, and Government, which has a project to do?

While both public and private money has gone into the MANs, the State and semi-State sectors are not exploiting the technology that is being made available to them. We sometimes put in infrastructure without changing how we work in Government and semi-State offices. We still operate with 19th century paper record systems and outmoded communications systems within and between Departments. I doubt if Mr. Henry's office has any input into that sort of thought process by Government. However, he may be aware of such analysis. In fairness it is probably a question I should be asking of Government and not of e|net.

Deputy Ann Phelan

I apologise for missing the presentation and forgive me if my question has been answered. Broadband is now a basic need for anyone setting up in business. The point has been made that high speed broadband is a major consideration in deciding where to establish a business. To what extent has our landscape mitigated against trying to lay the fibre? Have we missed an opportunity in not combining the cables with the motorways which have gone through rural areas? Would it be possible to use motorways in future to deliver broadband?

Deputy John O'Mahony

I thank Mr. Henry for the presentation. I am looking at the location of the networks throughout the country, particularly in Kiltimagh, Knock, Claremorris, Ballinrobe, Ballina and Belmullet in County Mayo, which is my constituency. I know these were chosen because of the lack of facilities or broadband but a number of gaps exist in Roscommon and Clare. Why is the pattern as it is? I agree that broadband attracts jobs and I was in Claremorris when the network was switched on. Does Mr. Henry have any indication of how successful the MANs are? Does a table exist of places where the MANs are used and where they have been most successful?

Mr. Conal Henry

Deputy Colreavy asked whether we work with the Government on developing a vision. The relationship between policy and industry is far stronger and deeper than it has ever been in my eight years' experience in telecommunications in Ireland. The next generation broadband task force was an excellent development as it formally invited the CEOs of the major telecommunications companies - one can discuss whether e|net is a major company but I was one of those CEOs - and the dialogue was instructive for policy and the industry. On a quarterly basis e|net has the opportunity to discuss our business and wider issues through the arrangements in place with our concession agreement. This quarterly liaison process works well and includes officials from the Department and a local authority county manager. It is an excellent process in which to discuss issues. While it is focused on issues associated with the metropolitan area networks, the dialogue is instructive for us all. There is always room for more discussion and sharing but I do not have fears about a lack of access to policymakers or concerns that we cannot get our views across to policymakers.

The point made on the State and the semi-State sector not exploiting the technology and changing the way we work is correct, but relative to our colleagues in France, Germany and the UK I do not believe we are any worse off. Good work is being done. The Revenue online service is excellent technology. The work being done on HEAnet with regard to third level and second level institutions can be breakthrough. I will not mention the name of a particular school because I do not have its permission to do so, but it is in receipt of 100 Mb broadband and all first year pupils have been given an iPad instead of a set of books. This is transformational, as much for the orthopaedic health of the pupils as anything else. The Department of Finance has a vision on how it wants to aggregate central services, and areas of the public sector are doing very interesting things. It could be brought up a level and made more visionary and coherent, but this is a challenge that exists in the public service in its entirety.

To answer Deputy Phelan, the landscape in Ireland is definitely an issue. We have a sparsity of population and the bungalow in the corner of a field effect. It is far more cost effective to deploy networks to clusters of buildings. We do not have clusters of buildings, we have large numbers of isolated buildings and this makes the average cost per home in Ireland significantly higher than the average cost per home in other countries. If one wanted to fix Ireland's broadband problem and decided to forget about the industry and just write a cheque to fix it once and for all, it would cost approximately €2 billion. This is big, but not that big. This is not what we suggest doing, but if one were Roman Abramovich and decided to bring fibre to every home in Ireland, this is what it would cost.

The motorways were not a missed opportunity. Most of them were built with ducting, which is piping along the side, and this removes 90% of the cost of building a fibreoptic network. The other 10% is with regard to deploying the fibre. However, we have concerns about what has been done as it has not been particularly well mapped so it is not exactly clear what is in place. We also believe the current charging structure is a little high. However, these can be changed so opportunities exist and we will certainly pursue them.

I apologise to Deputy O'Mahony for what happened at the weekend.

Deputy John O'Mahony

I detect there was very high use of broadband in Donegal yesterday.

Mr. Conal Henry

There was, yes. In particular, there was a large uptake in Donegal town.

We were not involved in choosing the towns. We applied to be the metropolitan area network operator after the networks were built. The decisions on how and where to build them were made by the Department in consultation with each local authority. At no point were we involved in this. We could have added value to it but from a procurement point of view it would have been difficult to bring us in without having a fair procurement for the second phase of the towns.

With regard to the question on the most successful MANs, it depends on how one defines success. Revenue per MAN largely tracks population so Cork is the biggest. There are outliers which overperform and underperform. Letterkenny is very strong relative to its population whereas Waterford is quite weak relative to its population. We believe this is because of the nature of the industrial bases there. Letterkenny is more technologically based with call centres whereas Waterford has a more industrial base, although this is purely a guess. In smaller areas, Manorhamilton and Carrick-on-Shannon in Leitrim do very well and there are many jobs there. In Mayo, Ballina is strong while Kiltimagh and Claremorris are getting strong. It is a very interesting picture and I would not say we have developed any science in understanding exactly what happens where, other than that it largely tracks population.

Chairman

Is everyone happy?

Deputy Ann Phelan

What does Mr. Henry sees as the future for broadband? We are at the third generation. What does he see as the next generation?

Mr. Conal Henry

The technology used to provide the service is always changing and 4G mobile, known as LTE or long term evolution, will be very impressive technology. It will be available in Ireland after the upcoming spectrum auction.

We are not involved in that at all so I am not at liberty to talk about it. We do not have any horse in that race. What I describe will allow mobile operators to deploy the next generation of fast broadband. I am not a technologist so the members would need to talk to one. I do not have much visibility beyond what I have outlined.

It is important that the members understand the role of fibre. Fibre, although a technology of sorts, is actually a means of distributing the technology. There is nobody in communications globally saying the position of fibre distribution will always remain the same. Traffic is gathered, largely wirelessly these days from a Wi-Fi or mobile network, and distributed in a wired way over fibre. Fibre uses the physics of light. One fibre the width of a human hair could carry all the voice traffic in Western Europe. With regard to physics, fibre is exponentially better than certain other technologies. Deploying fibre will create the capacity for whatever types of technology are being used by the consumer. The more fibre, the better the quality of all the networks. MAN networks, WiMAX broadband, 3G broadband, LLU broadband and cable television broadband are all coming onto the fibre networks. Fibre is critical to all the technologies.

Deputy Ann Phelan

Since fibre is so important, it has considerable implications for planning, especially if there is ever to be a housing boom again in Ireland. Sometimes we close the stable door after the horse has bolted. If we had planned for fibre broadband, it would have made life particularly easy. Australian planning guidelines require the installation of updated technology before houses are built. Perhaps we should consider this with our local authorities in respect of the planning process.

Mr. Conal Henry

We were heavily involved in that regard. In the past three years, we worked with a number of local authorities to help them to develop plans to include a stipulation on open-access fibre for all new developments. It was just as all the building stopped, unfortunately.

Chairman

I thank Mr. Henry, Mr. Beirne and Mr. Fitzgerald for attending. I am pleased we are making so much progress. I look forward to hearing from the delegates again.

Sitting suspended at 10.53 a.m. and resumed at 10.55 a.m.

Chairman

Officials from the Department of Communications, Energy and Natural Resources are present to brief the committee on the Department's recently launched national broadband plan, Delivering a Connected Society - A National Broadband Plan for Ireland. I welcome Mr. Aidan Dunning, Secretary General; Ms Kathleen Licken, assistant secretary; and Mr. Kenneth Spratt, Mr. Aidan Ryan and Ms Finola Rossi.

By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of the evidence they give to this committee. If they are directed by the committee to cease giving evidence in regard to a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should neither criticise nor make charges against any person or entity by name or in such a way as to make him, her or it identifiable.

Members are reminded of the long-standing parliamentary practice to the effect that the should not comment on, criticise or make charges against a person outside the House or an official either by name or in such a way as to make him or her identifiable.

The opening statement submitted to the committee will be published on the committee's website after this meeting. I invite Mr. Dunning to make his presentation.

Mr. Aidan Dunning

I thank the committee for the invitation to attend this meeting to discuss the development of broadband infrastructure in Ireland. As the Chairman indicated, I am accompanied by officials from the Department: Ms Kathleen Licken, assistant secretary; Mr. Kenneth Spratt; Mr. Aidan Ryan, technical adviser; and Ms Finola Rossi, assistant principal officer.

The Department has circulated to committee members a copy of the Government's recently published national broadband document, Delivering a Connected Society - A National Broadband Plan for Ireland. The plan, launched by the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, on 31 August last, will be the main focus of my opening statement. The Minister's target, as outlined in the report, is that at least half of the population will have high-speed broadband by 2015. The specified targets in the plan for the remainder of the population are to be implemented over the lifetime of the Government.

We have circulated to members the report of the task force on next-generation broadband, published last May. The task force was chaired by the Minister. The report and the deliberations of the task force helped inform the content of the plan. The importance of high-quality broadband as enabling infrastructure for economic and social development is accepted at both domestic and international levels. International experience and research support the view that high-speed broadband, in particular, is a key requirement for growth and jobs.

In a study completed for the European Commission, the McKinsey Global Institute estimated that the Internet accounts for an average of 3.4% of GDP, and as much as 6% of GDP in advanced economies. The study notes that SMEs with a strong web presence have been shown internationally to grow twice as quickly and export twice as much and create twice as many jobs as those with a minimal web presence. The Internet is, therefore, critical for business growth and development. It has a positive impact on many other facets of modern society, including entertainment, education, e-health and e-government. Widely available high quality broadband can also assist with regional and rural development.

Before outlining the key elements of the national broadband plan, I will refer briefly to the current position on broadband provision nationally. Considerable progress has been made in recent years on both the coverage and speed of national broadband infrastructure. The improvement is reflected in the fact that, over the past five years, the number of broadband subscriptions in the country has increased from approximately 600,000 to almost 1.7 million. Some five years ago, basic broadband speeds of between 1 Mbps and 2 Mbps were the norm. Now, typical speeds of up to 10 Mbps are becoming the norm, with speeds as high as 150 Mbps in some areas.

It is estimated that private investment in broadband infrastructure across all platforms over the past five years amounted to some €2.5 billion. This investment has greatly improved the quality of broadband infrastructure. For example, investment by UPC has resulted in availability of over 100 Mbps already to some 35% of the population. These figures are set to rise, with UPC recently announcing the introduction of 150-Mbps services and expecting to expand the footprint over which these services are available.

Eircom has indicated a commitment to major fibre-based investment, which will significantly improve fixed-line fibre-based broadband availability to significant segments of the population. Other service providers also have invested to improve the coverage and speeds of their broadband offerings. Investment in mobile broadband has led to an exponential increase in the number of mobile broadband subscribers from 45,000 five years ago to almost 600,000 at present. Wireless broadband solutions are particularly important for Ireland given our low density of population and high percentage of rural population, which makes the provision of high-speed-fixed-line broadband in these areas very costly. Notwithstanding these positive developments, there remains an unacceptable digital divide between rural and urban areas. A key commitment in the national broadband plan is to tackle this divide decisively.

As joint committee members are aware, there is no national State-owned telecommunications company in Ireland. As alluded to, the private sector has invested significantly in broadband infrastructure with very positive outcomes. On foot of various Government decisions, the taxpayer over recent years has also funded targeted investment, largely in areas where there was evidence of market failure. It is estimated that approximately €300 million of Exchequer investment in broadband has occurred in the last decade. This has included measures such as the fibre-based metropolitan area networks, MANs, which have greatly improved available broadband infrastructure in approximately 93 cities and towns; international connectivity projects, including Global Crossing and Kelvin, which have facilitated access by Ireland’s enterprise sector to international trading opportunities via new sub-sea cables; the national and rural broadband schemes, which have ensured basic broadband coverage for virtually every premises in the country; and the 100 Mbps to second level schools project, which will deliver high speed broadband to every second level school in the country by 2014, thereby enabling students to acquire and engage with the digital world, which is crucial to the modern economy.

A central feature of the State interventions is that they have been strategic and targeted in nature. Where the market and private investment can provide, there is no need for State funding, especially in the current very difficult fiscal climate. In any event, such intervention would generally not be permissible under EU state aid rules. This principle also has guided the Government’s approach to Exchequer-funded investment under the new national broadband plan. As the Minister put it in his foreword to the plan: "Notwithstanding the constraints imposed on the Exchequer at present, Government will intervene where – but only where – it is evident that the market will not deliver.” The national broadband plan is a clear expression of the central importance of broadband infrastructure to the achievement of wider economic and social objectives. The plan was formulated following a comprehensive consultation process. A central element of this process was the next generation broadband task force, which was established and chaired by the Minister. The task force included high level industry experts and considered a wide range of issues through five working groups which examined appropriate targets for broadband speed, demand stimulation, the removal of barriers perceived to hamper investment, spectrum policy and the potential role of State entities in facilitating the roll-out of high speed broadband. The task force published its report in May of this year and was itself subject to a public consultation process. This report was very valuable in informing the thinking that went into the consideration and final content of the national broadband plan. The plan itself was launched by the Minister on 31 August last, just three months after completion of the task force report.

The central commitments in the plan relate to the availability of high speed broadband throughout the country. In summary, these commitments are that 70 Mbps to 100 Mbps will be available from the commercial market operators to more than half the population by 2015, at least 40 Mbps and in many cases much faster speeds to at least a further 20% of the population, and potentially as much as 35%, which will include smaller towns and villages, and a minimum of 30 Mbps for every remaining home and business in the country, no matter how remote. Implementation of the plan will improve radically the quality of Ireland’s broadband infrastructure. It is an investment in Ireland’s future. This improvement will have an impact on all areas but will be especially pronounced in smaller urban centres and in rural areas. In this way, the digital divide to which I referred earlier will be decisively addressed.

While a significant element of the commitments will be delivered via private sector investment, the plan includes an indicative investment by the State of €175 million where intervention is necessary to ensure the targets will be met. This is likely to be focused mainly in areas of low population where there is no commercial case for investment by the private sector. The plan also addresses other areas that have an important impact on the provision of broadband infrastructure, namely, stimulation of demand for broadband, barriers to the provision of broadband infrastructure, spectrum policy and the potential contribution of infrastructure owned by State entities to the roll-out of high speed broadband. Implementation of the plan will be progressed urgently given the priority attached to it by the Government. A key milestone in this regard will be the completion of a formal mapping exercise to determine the exact position in respect of existing and planned broadband services throughout the country. As members will appreciate, this will be a major exercise on which the Department will require outside assistance, including from the commercial broadband operators. The outcome of the mapping exercise will inform the procurement process for State intervention. Key factors will be to ensure no gaps with regard to the coverage and speed targets set out in the plan, as well as optimal value for money for the State, including guarding against unnecessary investment in areas where the industry will deliver the targets. State intervention will also require EU state aid approval. The final level of intervention will be determined following the public procurement process when a competitive tender process will be concluded. In addition, the other elements of the plan will also be progressed by direct initiatives and cross-Government action. In this regard, it is the objective to publish a national digital strategy by the end of this year. This will be an important element in the drive to stimulate demand for broadband. A particular target will be small enterprise and the SME sector generally, in which the current level of online presence is unsatisfactory and may be hindering the sector from availing fully of trading opportunities.

The national broadband plan aims to change radically the broadband landscape in Ireland by providing the framework necessary to ensure the delivery of high quality, high speed broadband infrastructure. The key, of course, will be delivery on the commitments, and the plan sets out a strong framework backed by Government to ensure this.

Chairman

I thank Mr. Dunning for a comprehensive overview of the position. It undoubtedly will lead to many questions from members and I call first on Deputy Moynihan.

Deputy Michael Moynihan

I welcome the departmental officials and thank them for the presentation. The delivery and upgrading of the broadband network is one of the major issues facing society in respect of economic and social development in the future and is a major priority. I wish to ask questions on a number of issues. The delivery of broadband also has the potential to create a huge divide between urban and rural areas and between isolated locations and less isolated urban and large centres of population. This was evident in the presentation made by the previous delegation with regard to networks and the major urban centres. When young people who have gone through college and have had the benefit of high quality broadband contemplate setting up a small industry at home or whatever, their first question concerns the availability of broadband because it is the connection into the 21st century and the world beyond.

The Secretary General mentioned a number of matters in his presentation. He noted that the outcome of the mapping exercise will inform the procurement process for State intervention. He might provide members with some clarification regarding this exercise. For example, when is it likely to be before the Department? When does the Department hope to have all this information ready?

Mr. Dunning also mentioned how Government intervention will only take place when it is evident the market will not deliver. While members understand the parameters within which the Government must work, what State intervention is proposed under such circumstances? As for the cost of broadband connection to the consumer, is Ireland's relative position above the European Union average?

While I welcome the plan announced, I would love to believe we will be able to get to those speeds in the timeframe envisaged. That would be a great plus for the country. We are all aware of people with a particular expertise who have developed businesses in the remotest parts of the country, but the one issue holding them back is connectivity to broadband. The plan is very ambitious, but how realistic is it that we will get to those speeds and achieve the targets set in the timeframe envisaged?

Deputy Michael Colreavy

I thank Mr. Dunning and his officials. As this is just my second meeting, I may ask questions that have been asked previously.

I very much welcome the national broadband plan. It is achievable and has the potential to do much to bridge the urban-rural divide, but it will require a mix of technologies. Deputy Michael Moynihan mentioned the gap analysis. I know the findings of previous gap analyses did not reflect what was happening on the ground because it was not in the interests of some companies to reflect exactly what was happening. What parameters will apply to the analysis and how will we determine the areas in which direct government intervention will be required?

I take at face value that what is set out in the plan will be achieved within the timescales outlined. However, is there any unit of the Department looking at State use of the technology available? I sometimes refer to our use of technology as being like building a very good road but continuing to cycle instead of taking a car - it might be good for the environment and better for our health, but it does not get us to work any faster. Is the Government - local, State and semi-State bodies - exploiting the technology available to the fullest extent? There are huge savings to be made, for example, in terms of paperless offices. Are we making full use of technology and maximising the savings in terms of Exchequer spending?

Deputy John O'Mahony

I do not want to repeat questions asked. Mr. Dunning mentioned high-speed broadband for schools. I understand this is being progressed in my constituency of County Mayo. Will he update us on the progress made and how soon all schools will be connected? Will the programme be delivered on time? This will benefit schools, but is there any way it will help local communities, local industry and local businesses? Will they be able to tap into it until they have their own facilities?

Mr. Dunning also mentioned international connectivity projects, including Global Crossing and Project Kelvin. Will he update us on these projects? Deputy Michael Moynihan asked where we stood in comparison with other countries in Europe. With regard to the targets set to be met in coming years, are we chasing the curve? In other words, as soon as the targets we have set have been met, will everybody have moved on ahead of us globally?

Deputy Ann Phelan

I am very happy to hear about the mapping process because policy and future developments should always be based on accurate data. However, the issue of most interest to me is next generation broadband, the roll-out of 4G systems, next generation mobile services and spectrum options. What role will the Government have, if any, in setting parameters? Will it have any role in the roll-out of next generation broadband? We are closing the gap and broadband services now seem to have a significant footprint in how we do and will conduct business. I am interested in the level of interaction between the Department, local authorities and the planning process in making future plans. When we build in the future, will the availability of high-speed broadband be part of the planning process?

Deputy Patrick O'Donovan

I apologise for being late and for the fact that I must leave early.

I agree with Deputy Ann Phelan. County and city development plans should include provision for broadband. There is no point in providing sites for industrial facilities or housing if basic broadband infrastructure, which is as important as water and sewerage, is not available. With regard to mapping, has the Department engaged with the local authorities in the context of projected housing, commercial and industrial development after we emerge from our current difficulties? Has it engaged on where the population is likely to increase? If we are rolling out broadband, it should be rolled out in areas where there will be a demand for it in the short, medium and long term.

Somebody came to my constituency office a week ago who was infuriated because of the way he was being passed from Billy to Jack and Jim to Mary and back to Billy again in his efforts to find out how he could access a broadband service. He is at a major competitive disadvantage. I would like to see provided a one-stop shop, as is in place for water and electricity services. However, there appear to be a multiplicity of agencies which aspire to become or are involved in the delivery of broadband services around the country, whether they be county councils, enterprise boards, Leader companies, development boards, the Department, commercial entities or telecommunications businesses. Perhaps there should be just one location in each local authority area at which people could access the technical expertise they require. There is a disjointed approach in moving the programme forward.

I agree with Deputy Michael Colreavy that while the national broadband plan is ambitious, it can be delivered. However, it needs to be delivered in a coherent fashion. That is not happening because of the multitude of agencies with an input or which want to have one. They are sticking their shoes in the door and trying to wedge their feet in. This is making it more difficult to deliver the service. I again refer to the man who came to see me about broadband services. His business is at a competitive disadvantage in comparison with similar businesses in Limerick city.

He does not have access to broadband. He has access to bog-band, so to speak. The speeds are slow, it is unreliable and it breaks down constantly. He told me it depends on whether the wind is blowing in a certain direction, whether someone's hedge grows higher than it should or whether there is a rock in the way. That is no way to be carrying out business in 2012. We need to have employers in all the regions. It is remarkable that in Finland, which has a much lower population than even ours and the population density is even more dispersed than ours, there is high speed broadband in Lapland. We cannot get high speed broadband in west Limerick.

Deputy Noel Harrington

I apologise for missing the beginning of the presentation. I have gone through it and I very much welcome it. I welcome the work that has been done by the Department on the broadband and digital strategies. I have a few questions, which may have been answered.

How does Ireland shape up, both globally and in a European context, in terms of broadband speed and bandwidth? We have heard, for example, that UPC is delivering up to 150 Mbps in urban areas, but that does not give the full picture. As a nation, in general terms, where are we placed?

Much of the pressure on us often comes from domestic users of broadband but the focus here should be on the benefits to the economy and on job creation that broadband should be delivering. We are competing with countries in eastern Europe where the perception, rightly or wrongly, is that they are streets ahead of us in terms of connectivity. The message is not good. In my opinion, we are better than the perception but we need to see the figures and get that stacked up.

The high speed broadband for schools, is a fantastic initiative and is welcome. In talking about the economic impact in terms of creating jobs of providing broadband at speeds of 100 Mbps, did anyone ever consider looking at industrial parks and technological parks in many areas that have enterprises - not the main urban centres but the smaller provincial towns and villages? Did anyone look to see whether we could roll out 100 Mbps to those areas to create jobs? In many of the schools, 100 Mbps may be gilding the lily. If one is talking about an economic advantage, however, could that be the next strategy?

Deputy Ann Phelan mentioned co-ordination with the local authorities, as did Deputy O'Donovan. Further to that, and also on an economic issue, does the Department liaise directly on projects or strategies with IDA Ireland, Enterprise Ireland and the enterprise boards? We all are aware that IDA Ireland looks at the urban areas, chiefly on sites of 80 acres or more where it will deliver projects. Critical to its projects, as we heard in the previous presentation from e|net, was the availability of the MANs and the success it has had. If we are to deliver more than 100 Mbps in some other areas, it would seem logical that the Department should be saying to IDA Ireland and Enterprise Ireland that the infrastructure is available in an area which may not be on their radar and in which they could create jobs. They could get a land bank that may be not as difficult to acquire as in more urban areas and, with some encouragement, be able to deliver industry into places that normally would not have been thought of. That goes for the enterprise boards as well.

Following on from that, while it has not been mentioned in the presentation, could the witnesses give members an overview on how we compare internationally on tier 1 connectivity in attracting into the country the large multinationals that need such infrastructure?

Recently, a large online multinational created 26 jobs in a rural part of west Cork, which is where the focus was rather than bringing them to Sir John Rogerson's Quay or wherever in Dublin and where they would be able to work from home delivering the back office services this company would demand. While everything is going grand, there is the obvious difficulty of technical hitches. We should have moved on from that. I will notify the Department on the matter and hope we can get some resolution. It seems industry is going ahead in that regard and we want to encourage that type of activity where a new template would be offered to large multinationals to facilitate them in having staff work from home two or three days a week, five or ten days a month, or whatever the case may be. It would increase quality of life, decrease the traffic on the roads, and so on. We should encourage that and I would ask the Department to consider it as well.

Deputy Terence Flanagan

I offer my apologies as well for being late. I wish to ask the Secretary General whether the national digital strategy is in line to be published towards the end of the year. Are there supports from Europe toward Ireland's national broadband plan? Under the plan, €175 million is set aside to be invested. Will we receive any help from the European authorities in that regard? Does the roll-out of the broadband involve masts as well as having to dig to install physical infrastructure? Can the Secretary General explain the background to the installation and the upgrade of the current network?

Chairman

There were many questions for the Secretary General and we will give him a little time to answer some of them.

Mr. Aidan Dunning

I thank the Chairman and members. I will start with a general comment before getting into the specifics. It picks up a little on what Deputy Harrington said. The Government decided on a national broadband plan because there is an acceptance that there must be a step change in terms of broadband speeds and the quality of our broadband infrastructure. That is because there is a strong acceptance that it is key to economic and social development. I referred in my speech to the real and tangible improvements that have been made in recent years. One is seeing increasingly, in terms of foreign direct investment, FDI, that Ireland is proving to be a strong attractor in information and communications technology, ICT, and related areas where high level broadband connectivity is particularly important. The fact we have improved our infrastructure, primarily on the back of private investment, is a good indicator that we are on the right track, but much more needs to be done.

On the implementation of the plan and consultation and liaison with the industrial agencies, the Department spoke to the industrial enterprise agencies, Forfás and our Government colleagues about the formulation of the plan. There is general acceptance on their side that this is a good advance for IDA Ireland and Enterprise Ireland when it comes to selling Ireland in terms of us being serious about upping the game in the provision of broadband at that general level.

A key commitment in the plan is to address the perceived issue which is undoubtedly a fact, that there is a significant divide between urban and rural areas. Through the national broadband scheme and other competitive provisions, rural areas have access primarily to basic broadband, which is 1 Mbps to 2 Mbps. The plan gives a commitment that it will be 30 Mbps in every household, no matter how remote. That is a major commitment and it will take a little time. I can go into the intervention and how it will be done. Unfortunately, one cannot merely wave a wand so that it will happen overnight. This will be especially important, however, in terms of economic and social development and development of industry in rural areas.

That is the general backdrop I wish to outline in explaining why the Government has placed such critical importance on this issue. We spent a lot of time with the task force in putting this together and we consulted widely, both within the Government system and with commercial operators.

I hope we have found the correct balance in a context of straightened resources.

Deputy Moynihan expressed interest in the mapping exercise, which will be crucial to the Government’s intervention in this area. As we noted in the plan, it is clear that the industry is going to deliver a significant amount of high speed broadband. It is already doing so, with 150 MBps available to approximately 30% of the population, albeit in urban areas. Significant speeds are also available via private investment in other parts of the country. We have to use the resources available to us to ensure, as with all good policy making, that we target our investment at achieving the optimal outcome. The mapping exercise is important in this regard.

The exercise comprises two elements. First, it will ensure that whatever procurement results from it will be able to achieve the targets set out in the plan. That will require consultation with the telecommunication companies to understand their investment plans and subsequently mapping the country to identify the areas in which we need to provide infrastructure. Second, it will ensure optimal value for money for taxpayers in the procurement process. There is a third element involving approval for state aid, but I am confident we will manage this once we structure the procurement process correctly. Any intervention by the taxpayer of a member state has to receive approval from the EU.

We hope to complete the mapping exercise by next year. It is a major exercise covering the entire country, although we do not expect to begin in certain urban areas. As I do not want to get bound up in red tape and bureaucracy with the European Commission, we are going to proceed carefully and with expert advice. On foot of the mapping exercise we will devise a procurement process which will be open to all commercial operators and, from our point of view as guardians of the taxpayer’s money, will attempt to derive maximum benefit from the private sector contribution. Clearly, however, the Exchequer will also be contributing. We will use co-funding to meet, at a minimum, the targets set down, particularly in the second and third categories of small towns and rural areas. We do not yet know the level of State intervention required for the project but it will be sufficient to meet the targets while also providing value for money. The timeframe is realistic, as Deputy Moynihan noted.

In the context of the digital strategy, certain steps can be taken to increase demand for broadband, thereby helping the private sector to develop markets. By 2015 we will have made major progress on high speed broadband and our aim is to implement the remainder of our targets for smaller towns, villages and rural areas over the lifetime of this Government. These rural areas are largely covered by the national broadband scheme at present and are being upgraded to 2 Mbps or 3 Mbps in October 2012. We will commit to provide speeds of 30 Mbps in a few years’ time.

Deputy Colreavy asked about the State’s use of technology. He is correct that enormous benefits can be derived through the State leveraging the technology facilitated by good broadband connections. An e-government strategy has been launched by the Department of Public Expenditure and Reform, which has primary responsibility in this area. At European level we are regarded as relatively advanced with our e-government strategy but the digital divide once again comes into play. It is easier to access e-government with better broadband. There is potential for online provision in a range of areas, such as e-health and e-learning.

Reference was made to broadband in schools. Considerable work has been done by the Department of Education and Skills in primary schools but more work needs to be done on implementation of broadband in secondary schools because speeds at primary level are, understandably, not as fast as at secondary level. We also need to work with the third level sector. The State is proactive in leveraging technology and this will be part of the implementation process. Deputy O’Mahony also asked about broadband provision in schools. His constituency of Mayo is on this year’s list for the roll-out of services and by the end of the project a total of 278 second level schools will be able to access speeds of 100 Mbps. The 78 schools involved in the pilot project have been operating successfully for the past two years and we have been receiving positive feedback on their experience. This year we are rolling out broadband to 200 schools, most of which are located in the west and mid-west.

Chairman

Can Mr. Dunning provide a list of those schools for the benefit of the committee?

Mr. Aidan Dunning

Yes; 27 secondary schools in County Mayo will get broadband speeds of 100 Mbps.

Several speakers asked about international connectivity and our position on the scale. As with all statistics, assessments of our position have varied. The OECD produced an assessment with which we are somewhat unhappy because it failed to take account of mobile broadband penetration. None the less, it is accepted as a harmonised approach. I acknowledge that further work needs to be done in respect of several of the OECD’s tables where we lag other countries. However, Singapore, which is at the top of the tables, has a population of 5 million in an area the size of County Louth. It is not costly to supply 100 Mbps to every household because the population is very dense. It would cost billions of euro to supply 100 MBps to every household in Ireland because of our topography and the fact that some 40% of our population live in rural areas. The population density in Ireland is 67 people per square kilometre, compared to 253 in the UK, 505 in South Korea and 7,000 in Singapore. These countries look great on advertised speeds but it is not necessarily the case that the offers are being taken up. There are other ways of measuring broadband provision. Akamai is an organisation which produces statistics on the speeds made available, as distinct from advertised. Ireland fares relatively well empirically in respect of the speeds that reach homes and business. We are ranked 13th globally and seventh in Europe for average peak connection speeds provided as distinct from advertised.

The purpose of the plan is to move us up the scale. We will easily beat the targets set out by Commissioner Kroes in the EU digital agenda

, both in regard to ubiquity, which we already have, and in regard to where we will be on speeds by the mid-term of the plan. The most difficult part of the plan is the target that 50% of the European population will have subscribed to 100 Mbps by 2020. It is a very ambitious target because it does not take account of peoples' circumstances or needs. Certainly by 2020 we hope to have availability up to that level but whether 50% will have subscribed is a matter of choice. This brings me back to the digital strategy and the importance of convincing people that it is in their interests to subscribe to broadband.

The spectrum auction was mentioned by Deputy Phelan. We are not involved in spectrum auction, which is a very sensitive issue. The process is under way at the moment and is being conducted completely by ComReg. We look forward to a positive outcome. I hope it will make available a very rich spectrum that will, in time, enable fourth generation broadband to be rolled out. That would be of huge benefit to rural areas in particular and enable much higher speeds than are currently available in those areas. It is probable that even with that level of connectivity and speed, there will be some Exchequer intervention required in those areas to make it a commercial proposition. Apart from the broadband aspect of it, there is also a significant Exchequer benefit in terms of payments made by service providers for the use of the resource. It is, after all, a national resource. Hopefully the payment will be significant this year and over the period of the licences. I emphasise again that the Department and the Minister are not involved in the auction. It is being run on a sealed basis by ComReg as we speak.

The issue of local authorities was also raised. In my speech I referred to a number of what I would call complimentary issues to the key issue of speeds, including the digital strategy and the local authorities. Clearly, local authorities and the planning system are crucial to enable service providers to provide the speeds and to do the work required, whether it be through civil works, the erection of masts or anything else. We had some very good engagement with our colleagues in the Department of the Environment, Heritage and Local Government in the run-up to the production of the plan. That will be ongoing.

We also have had very good engagement with the local authorities. I am very hopeful that, as we proceed on the various strands of the plan, the local authorities will be able to facilitate us through planning systems that will be encouraging of the roll-out of broadband. The local authorities very much recognise the importance of this for their areas. We see potential barriers, however. We are all aware that certain controversies can arise from time to time in regard to the location of infrastructure, whether it be telecoms, energy, roads or whatever, but we will be working very hard on this. We set up a group before the plan was produced to examine this whole area. That group will remain in existence to scope out guidelines - or something stronger, if necessary - that will enable the planning system to accommodate what needs to be done. This is something that is very much on our radar at present.

Deputy O' Donovan mentioned the multitude of agencies and the frustration of consumers. In that context, I would refer members to callcosts.ie, a website run by ComReg. It sets out the broadband speeds and offerings that are available in each county in Ireland. I have a copy of the most recent data, from July, which makes for very interesting reading. It shows that across every county there are various packages available. In the 1 Mbps to 10 Mbps sector, for example, there are 75 plans available in County Clare. If one moves up the chain to the 20 Mbps to 30 Mbps sector, there are still significant numbers of plans available in every county. That website is very useful. However, it does not drill down within each county and I am sure that is what the representations made to Deputies would be about.

Chairman

Yes, that is the issue.

Mr. Aidan Dunning

I am sure people contact Deputies to say that they happen to be living in a particular place and cannot get broadband there. The national broadband scheme, NBS, was designed primarily to deal with areas where there was no broadband availability. While it is only basic broadband, it has been a success in terms of making broadband available to over 200,000 premises that did not have it before. The take-up has not been as high as we would have hoped when we launched the scheme in 2008. We estimate that there are just over 40,000 customers at this stage of the NBS. That scheme is operated by service provider 3, with whom we came to a contractual agreement. A certain amount of Exchequer investment went into the scheme but it has proven to be a success in terms of opening up the broadband world to people who did not have that opportunity before. We also have anecdotal evidence that the scheme has induced other operators to compete in NBS areas, including Eircom. That is all to the benefit of those areas.

Even after all of that, we are aware that there may be areas that cannot be reached at all. We have initiated a rural broadband scheme which is being scoped out at the moment but again, under that scheme, we can only go into areas where the European Commission is satisfied that there is no other service provider. The evidence to date indicates that there is at least one service provider in all of these areas and if that service provider can make an offering available, we cannot go in and offer the rural broadband scheme. The NBS is working well and the contract lasts until 2014. We cannot go into those areas until that contract ends but I would envisage them being the target for a minimum of 30 Mb after that date. The experiential difference that will make, to individuals and particularly to enterprises, will be enormous. I will provide the committee with details of the aforementioned website, which would be very useful for members to have at their disposal.

The issue of broadband for schools and the concept of extending it out to enterprises in business parks or other locations was raised. The reality is that the broadband for schools project is a contract for high speed broadband for schools only. We had a certain amount of resources at our disposal in the Department. As a developmental Department, we felt it was very important that we do our bit, in conjunction with our colleagues in the Department of Education and Skills, to upgrade the digital skills of the work force of the future. That is what we are doing and we are starting in the areas where connectivity is poorest, mainly in western areas of the country. Roll out for the next 200 schools will be in those areas. By the end of 2014 we expect all of the 800-plus schools to have that facility. However, it will only be for the schools. We do not - and will not - have the resources to go beyond that. In any event, in many cases, service providers would be open to speaking to enterprises in towns about providing tailor-made broadband solutions.

We are trying to improve the speeds in the smaller towns which do not have the requisite speeds they would like. That is the second segment, so to speak, of the three point targets in the pillar I set out at the start of my presentation.

On the last point from Deputy Harrington, I have dealt with the large multinationals. Ireland's success in that area in recent years, notwithstanding our economic travails, has been outstanding and that is seen to be the case throughout the world. Broadband connectivity has contributed to that, as has international connectivity, which was mentioned. We have Project Kelvin, Global Crossing and some others. I attended the launch of the EirGrid interconnector last week, which is a fantastic feat of engineering of which this country should be proud. It will make a huge difference in terms of energy provision, but alongside the electrical cables there is also Internet connectivity. That will improve the situation in that regard. For an export oriented country such as ours, it is crucial we have good international connectivity. All of what I have said will deliver that. I hope I dealt with most of the points raised.

Chairman

Mr. Dunning said he received co-operation from the local authorities, especially on the infrastructure that will be put in place, and I presume that will include masts that will be erected in different local areas.

Mr. Aidan Dunning

Masts?

Chairman

Yes. The health concerns associated with these masts are a major issue and I presume every public representative has encountered this in their county. We attend meetings on this issue at which there are self-appointed experts proclaiming that the health impact of these will cause people's deaths. People in these communities are genuinely concerned about them. We need to address the health concerns about them and to have something on this to which we as public representatives or the local authorities can refer. It is underestimated how emotive people are about this issue. It would be disappointing if such groups were to spring up throughout the country as the broadband infrastructure is being rolled out. Therefore, this is an issue that needs to be addressed between the Department and the local authority. I am being constructively critical in saying that heretofore the issue was not addressed and people are very worried about it. It is an issue the Department needs to address.

Deputy Michelle Mulherin

I have a concern about a matter and I wonder if I heard Mr. Dunning correctly. He mentioned that people within areas identified as electoral districts for the delivery of broadband services under the national broadband scheme would not be eligible to be considered for an alternative means of delivery of broadband services until 2014. Is that what he said?

Mr. Aidan Dunning

No. What I meant in that respect is that we have a contract with Exchequer funding with 3 whereby we subvent the scheme to a degree to allow provision in those electoral districts. My understanding is that other operators can go into those electoral districts now and offer an alternative provision. We cannot do so. The Exchequer cannot subsidise that provision.

Deputy Michelle Mulherin

Does that apply to the rural broadband scheme where there is a requirement that people in these electoral districts have reasonable phone coverage, which in many areas they do not? Coming from a rural constituency, I am concerned about the number of people who do not have access to broadband or accept very poor broadband coverage. In terms of the interaction between the delivery of the next step under the rural broadband scheme and the national broadband scheme, do those people have to wait before they will be serviced under the rural broadband scheme? A request was issued for people who did not have broadband access to notify the Department. Some people did not get to do that. Can those people still come forward and advise that they live in a rural area where they cannot receive broadband and seek to be serviced under the rural broadband scheme?

It is stark to visit some primary schools in a rural county such as Mayo where I am from and note the differences between them. These schools embrace digital technology but a fundamental requirement of that is access to broadband. Some of these schools have access to it and some do not. The learning environment for children in schools that do not have the same access to digital technology compared with children in schools that do is very marked. In line with what has been done for secondary schools, it is important that a minimum acceptable standard be delivered to primary schools as soon as possible.

Deputy Ann Phelan

On the Chairman's point on masts and mobile phone masts, and this is probably not Mr. Dunning's direct area of responsibility, it seems the use of mobile phones has increased exponentially. If the health impact of masts is such that they are detrimental to people's health, surely the health problems should have increased exponentially with the sale of mobile phones. The World Health Organization, WHO, has done a good deal of work in this area. This matter does not come directly under the remit of Mr. Dunning's Department, but perhaps he would communicate with the Department of Health on this. Has that Department noted any rise in the health problems in this respect? If it is logical that mobile phones have an effect on people's health, more people should be reporting that their health is in danger because of the use of mobile phones. It is very difficult to deal with this issue because we do not have any hard and fast evidence on it. Anecdotally, most people have a major fears of masts in any guise. We find that is also the case with wind turbines because, anecdotally, they are supposed to have an effect on people's health. If we had some evidence of that it would be helpful to local authorities and to us in our deliberations.

Deputy Michael Colreavy

The issue I wish to raise is not on the agenda, so I might talk privately to the Secretary General about it after the meeting.

Chairman

Yes.

Mr. Aidan Dunning

To pick up on the point made by the Chairman and on Deputy Phelan's point about the health issues relating to mobile phones and masts in general, it is an issue that is of concern to us because mobile broadband will be an important element in terms of delivering the plan, particularly in rural areas, and to do that masts are an important part of the infrastructure. It is primarily a matter for the Department of Health, and the Department of the Environment, Community and Local Government to a degree, in terms of their planning role. We liaise with them. There are international standards within which service providers must stay, and I understand they are monitored by the United Nations which sets the limits. They provide guidance to the public bodies, which are the planning authorities, and also to the health authorities. Those standards are accepted internationally. There are masts throughout the world. They are not just in Ireland or the United Kingdom; they can be found everywhere. An attempt is being made to have a harmonised system in place, and I understand that is the case, and the requirement in Ireland is that the service providers would meet that.

There may be a separate issue in terms of engaging with local communities and reassuring them in that regard. We have evidence that in other areas in the past, the level of engagement was not optimal, which has led to problems arising subsequently. The service providers need to be aware of this and there is an onus on the Department, the Government and our colleagues in other Departments to try to improve situations. This is something we will raise with colleagues in the Department of Health and the Department of the Environment, Community and Local Government.

However, my understanding is that a framework is there and the key point is to get the information to the people.

Chairman

On that point, the issue is to get the information out to the people. Meetings are springing up nationwide when people see planning permission for masts. Public meetings are held and there is much misinformation about. As clarity of information and the exact position is what is required, perhaps the witnesses might discuss that in-house to ascertain how to make it more widely available in a more structured way, if possible. This would alleviate a huge number of problems for all concerned.

Mr. Aidan Dunning

We already have some examples under the national broadband scheme, NBS, where the service provider went out and engaged quite proactively in certain parts of the country.

Chairman

Very good.

Mr. Aidan Dunning

It made a big difference.

Chairman

That is the kind of measure I mean.

Mr. Aidan Dunning

In response to Deputy Mulherin, there is an onus on the service provider, under the NBS, to provide an acceptable level of service in the electoral district areas. There are sanctions to be applied, if necessary. We have not received a huge number of complaints. While there certainly were some at the outset, there have not been many recently in respect of the quality of service. The rural broadband scheme cannot operate in the national broadband scheme area. It must be for houses outside the NBS area for which problems still exist. However, we can only provide assistance where no other service provider is available to that individual. The evidence we are getting, having undertaken a highly comprehensive trawling exercise, is that service providers are making offers. Moreover, people who had applied to us via the rural broadband scheme are accepting offers. This is the reality of the position.

Deputy Michelle Mulherin

Is it still open for people to apply to be considered under that scheme?

Mr. Aidan Dunning

No; the closing date has passed and it is closed. It was a long period.

Deputy Michelle Mulherin

Yes.

Chairman

I thank the witnesses for all the information they provided to members. It was worthwhile and thorough. On behalf of all the members I thank them and I also thank those members who remained. I remind members that while this meeting is about to adjourn, the joint committee will discuss New Ross and Galway ports tomorrow morning. That session will be followed by a discussion with the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, on the introduction of Saorview. I further remind members that this session will be televised and consequently, I ask all parties to ensure all members of the joint committee will be present.

The joint committee adjourned at 12.05 p.m. until 10 a.m. on Thursday, 27 September 2012.