Dáil Éireann Debate, Tuesday - 30 November 2004
66 Mr. Broughan asked the Minister for Communications, Marine and Natural Resources if Eircom rebuffed a proposal for a €1.8 billion deal to extend the State’s broadband network to allow nation-wide high speed Internet access; if he was prepared to offer Eircom price increases on phone charges, tax breaks and debt guarantees to assist in the funding of the programme; and if he will make a statement on the matter. [31283/04]
Amharc ar fhreagraThe Government did not make a proposal to Eircom for a €1.8 billion deal to extend the State's broadband network. Presumably this question arises from a newspaper article of 31 October last to which the Deputy refers and which contends, inter alia, that the Government offered Eircom a €1.8 billion deal to roll out broadband nationally. It also contends that Eircom was offered a range of incentives as “carrots” such as tax breaks, subsidised loans, amendments to the building regulations and price increases. These claims are untrue.
At no stage were negotiations entered into with Eircom or with any other party. At no stage were terms such as those postulated in the newspaper article on offer nor did the Government offer to fund Eircom directly or indirectly through subsidised loans, tax breaks or any other means. Consultancy advice contained in a report to a Government sub-committee, agency or Department should not be misconstrued as Government policy.
The telecommunications market is a regulated market and thus any action by Government has to be consonant with national and EU regulation. Accordingly, the Government is not in the business of entering exclusive contracts of the kind inferred by the article with any market entities. It favours investment in open access infrastructure to which all operators have access on similar transparent terms. That is the ethos behind the Government's open access metropolitan area network programme which is rolling out high-speed broadband infrastructure to 120 towns and cities regionally.
To the extent that discussions are held between officials of my Department and executives of other telecommunication operators and their representative associations, these were and are born of sound public policy practice and in the context of seeking to align as much as possible the broadband roll-out plans of corporate entities and those of the Government, as published in New Connections and the Government's broadband plans. In that context I commend the telecommunications operators who have contributed significantly to the 80-fold increase in broadband consumers in Ireland in the past 15 months.
Is it not the case that the substance of the Sunday Business Post report is true, that is, the Department’s consultant, Mr. Ira Magaziner, and his company discussed with Eircom a range of incentives, including a 10% price increase, amended building regulations for telecommunications masts, a guarantee of part of the Eircom debt and other attractions to conclude a deal along the same lines as one agreed between the British state and BT for Northern Ireland? Is it not also correct that the negotiations, such as they were, were broken off by Eircom because it wanted to carry out a bond issue of €450 million to repay its venture capitalists?
Is it not true that the Minister's predecessor was desperate to get an overall roll-out of broadband? Our position in terms of broadband roll-out is appalling. We are at the bottom of the European Union league, with 1.59 households per 100 inhabitants receiving broadband. Does the Government have a target of reaching the European average of households with broadband access — 320,000 households in Ireland — by early 2005? Is it not true that this target will not and cannot be met unless between 6,000 and 8,000 households are broadband enabled each week?
Did the Minister, on his first appearance at Question Time as Minister for Communications, Marine and Natural Resources, not accept clear evidence that at least 30% of Eircom lines cannot be enabled for broadband? The company's advertisement, which we hear day in and day out on radio programmes, asking householders to get into the broadband revolution is a sick joke because it is always qualified by the statement that the offer is subject to survey and availability. Is it not true that nearly half of households have no prospect of receiving broadband under this Government?
Most of what the Deputy said is not true. He asked me if the substance of the question is true. I thought I had made it clear that it is not true, regardless of how much the Deputy tries to twist the facts. As I clearly outlined, there were no negotiations by Government, no deal was put forward by Government and Eircom was not offered by Government a range of incentives such as tax breaks, subsidised loans, amendments to the building regulations or price increases.
On a point of order, did the Minister's consultants offer incentives?
The Minister is in possession.
It would be nice if that were the case. I told the Deputy that no negotiations were conducted and no offers were made by Government or anybody. I am aware of because the consultants hired for that purpose were hired by the Department of the Taoiseach and Forfás. They had no right to negotiate on behalf of Government. None of the allegations postulated by the Deputy is true. I emphasise that no negotiations took place and Eircom did not rebuff the Government regarding any package worth €1.8 billion.
As regards the Deputy's questions concerning broadband, the Government never made any secret of the fact that it was anxious to roll out broadband as quickly as possible. The matter the Deputy raises was part of the process to determine whether we could roll it out any quicker. Ultimately, the Government decided, on foot of the discussions which took place and the presentation made by the consultants, that the best and most effective course of action was that which it had earlier decided, namely, to roll out the municipal area networks and establish group broadband schemes to allow as many people as possible to connect to broadband as quickly as possible.
To avoid giving an impression of complete doom and gloom, while we never made a secret of the fact that we lag behind many of our neighbours in broadband roll-out——
The Minister's predecessor did.
——we are now providing broadband connections faster than any of our competitors. I hope we will have largely met our targets by the end of next year.
I am glad the Minister mentioned Forfás and accepted our extraordinary deficit in broadband, perhaps our largest infrastructure failure. Forfás issued a report on broadband last week which noted that Ireland has a broadband deficit of 360,000 households. I informed the Minister on the day he took over the Department that he had been walked into a major scandal by the Taoiseach and the former Minister for Communications, Marine and Natural Resources, Deputy Dermot Ahern. Does he accept that Forfás indicates that he has a desperate problem in the area of broadband?
Forfás has not told me anything I did not know or which was not already on the public record. That is the reason the Government has been so active in trying to make up the deficit and I set specific targets.
