Dáil Éireann Debate, Thursday - 6 April 2006
3 Mr. Crowe asked the Minister for Communications, Marine and Natural Resources his views on whether Eircom needs to be re-nationalised and that the Government’s decision to privatise it in the first place has proved disastrous. [14058/06]
Amharc ar fhreagraThe State has no plans to nationalise Eircom infrastructure or regain control of any part of it. The telecoms market is fully liberalised and independently regulated by ComReg in accordance with the EU regulatory framework. This is the case in all EU member states.
Privatisation of Eircom took place against a background of liberalisation of telecoms markets and was part of a broader trend, which was reflected across the EU. Several other former state-owned telecoms companies have either been fully or partially privatised by their governments. The State received over €7 billion when it privatised Eircom in 1999. This provided money to the Exchequer for the public benefit. There is no guarantee that a State-owned Eircom would provide better competition, services or innovation in our fully liberalised telecoms market.
I note the Minister used terms such as "liberalisation". I take it the drift will continue in the provision of telecommunications services. Eircom was floated on the Stock Exchange and then was sold to a consortium which asset-stripped it. Those involved paid themselves a €500 million dividend based on borrowing. It refused to invest in the national broadband roll out or a €1 billion upgrade of the network. The consortium then decided to sell on the company on the Stock Exchange.
Does the Deputy have a question?
Will the Minister of State accept that the sale of Eircom was a disaster? A few people made themselves very rich, most notably Sir Tony O'Reilly, while the telecommunications infrastructure has been neglected and is in decay. How is it proposed to rectify the mistake of privatising Eircom? Will the Minister re-nationalise the company? Does he want to take a strategic interest as to what is happening in the telecommunications sector?
Has the Minister examined the National Pensions Reserve Fund being allowed to invest in the company's network? Those individuals involved in buying-out the company did not give a damn about our knowledge-based economy and the roll out of broadband. Ireland's telecommunications infrastructure is languishing behind those of other countries in Europe. While we hold ourselves up as greatly advanced in our telecommunications, we are the laughing stock of Europe. People in Galway have difficulties in getting e-mail services. Will the Minister rely on the market and these private investors who are more interested in profit than the public good?
There are no plans to re-nationalise Eircom. There are some problems with Eircom services in every constituency. It is useful to reflect on the positive elements of the telecoms sector by examining ComReg's latest quarterly data, covering Q4 of 2005. It shows the telecoms sector in Ireland employs about 14,500 people and is worth around €4 billion. For fixed calls Ireland is better than the EU average for both national and international calls for residential and business customers. Ireland has a mobile telephone penetration rate of 102%, which shows the appetite of consumers for these types of services and the variety of mobile services in the market including 3G services. The Irish broadband market more than doubled in 2005, more than twice the rate of growth of the EU broadband market.
We are coming from a low ebb on that. Considering the sell-off of Aer Lingus is being mooted, why did the State not hold on to this strategic share? Was it because that was part of the agreement with Sir Tony O'Reilly who made huge profits from the company? Was it simply left to the private sector to roll out broadband? Was there any particular reason why the Government abandoned the development of telecommunication services after investing so much money and time through the years?
In 1999, the Government decided to sell off Eircom and took in €7 billion. I am certainly not in the pocket of Tony O'Reilly. I never met the man and do not know him. He would not influence me one way of the other.
4 Mr. Durkan asked the Minister for Communications, Marine and Natural Resources if his attention has been drawn to the concern expressed about the long drawn out delivery of broadband services here and the resultant economic consequences; if he, directly or through the regulator, will identify the cause or causes for the delay; if his attention has further been drawn to the critical nature of the report on broadband drawn up by the Joint Committee on Communications, Marine and Natural Resources; if he has proposals or intends to issue instructions to address the issues raised in the report; his proposals to increase the number of service providers in this area with a view to accelerated delivery of services; if he has studied or identified implications for the industry such as local loop unbundling in the event of a sale or takeover of Eircom; if his attention has further been drawn to the urgent need for investment in telecommunications infrastructure; his views on the State re-entering this market; and if he will make a statement on the matter. [14056/06]
Amharc ar fhreagraThe development and roll-out of broadband technology is primarily a matter for the industry in a fully liberalised market. However, broadband providers in Ireland were slow in launching competitive, affordable broadband. The delays in broadband roll-out can be attributed to the lack of competition between providers and the reduction in investment in infrastructure in the aftermath of the dotcom crash.
The report to which the Deputy refers has been examined in some detail. It recognises that availability is improving rapidly. The latest quarterly data report from ComReg on delivery rates indicates that broadband subscriptions increased by 103% from December 2004 to December 2005 and now stand at 270,700. The current level of take-up is consistent with the stage of development of the market.
The report recognises that the roll-out of broadband infrastructure in rural areas needs to be maintained. The Government's regional broadband programme is tackling supply side issues and was a direct response to the lack of investment by the private sector. High-speed, open-access metropolitan area networks, MANs, are being constructed on a phased basis in association with the local and regional authorities. Phase one of this programme has delivered fibre-optic networks to 27 towns and cities. This programme has been extended to more than 90 towns nationwide. These metropolitan area networks allow the private sector to offer world-class broadband services at competitive costs.
According to the report, one of the biggest challenges for the Government is demand or take-up, and Ireland continues to lag behind its OECD partners in this area. Earlier this year, my Department initiated a consultation process to examine the level of demand for broadband services in the Irish market, which concluded in March. The discussion document touched on key demand factors for consumers and asked for possible examples of demand measures by Government and industry, if any are necessary. More than 100 responses were received and a wide range of issues were raised which are being examined by officials in the Department for further action.
The third conclusion is that Ireland requires strong competition in the market to maintain economic competitiveness. In 2004, there were more than 80 Internet service providers while today there are more than 150 such companies with at least 45 different broadband offerings. The use of fixed wireless local access is increasing, especially in rural areas that cannot obtain ADSL connectivity. In addition, the development of wi-max offers considerable potential for the future.
Delays have been experienced in the provision of broadband but did the Minister take any action about them? At least three years ago, the then Minister had discussions with a number of market providers in various communications areas with a view to establishing an accelerated programme. Why was some action not taken at that time, given that the alarm bells had begun to ring? Will the Minister of State indicate to what extent he and the Government have identified the causes of the delays and set about remedying them? The joint committee's report is a damning indictment of the process of providing broadband in this country. It compares most unfavourably with the dramatic results achieved in other jurisdictions in a shorter time by doing some of the things the Minister and his Department refused to do.
Will the Minister indicate whether the number of potential service providers could be increased? What obstructions caused them to remain outside the market and can they be dealt with? To what extent is the Minister willing to examine local loop unbundling and other issues associated with market dominance? Economists have suggested it is vital for the State to have some control over elements of the telecommunications infrastructure, otherwise it will not be possible to meet future requirements.
Some 18.7% of households have broadband. Obviously, there are some roadblocks and the Minister initiated a discussion document in this regard. As I indicated, more than 100 responses were received which are being reviewed by officials in the Department to see how some of the roadblocks can be lifted.
The 27 MANs projects have now been handed over to the people who will manage them. In addition, 575 communities in the group broadband scheme, which is being rolled out, will cover a population of 420,000. The Minister is examining how we can speed up implementation of the broadband project.
The Deputy referred to the privatisation of certain areas. It must be borne in mind, however, that as regards all the broadband areas in which the Government has invested, including the MANs project and the rural areas project, the infrastructure will remain within the Department's control. While people will be allowed to operate the system, the actual infrastructure will be under the control of the Department.
Deputy Crowe raised an important issue earlier. The Eircoms of this world were not prepared to become actively involved in infrastructural development for broadband. The Government decided to do that through the Department and as a result, we have had huge investment in the schools, MANs and rural broadband projects. All that infrastructure will remain under the control of the Department.
Lucky Luke.
5 Mr. McHugh asked the Minister for Communications, Marine and Natural Resources his plans to provide fibre-optic broadband to serve the hub town of Tuam, County Galway, in order that the town is provided with a world-class broadband service to enable it achieve its potential as envisaged under the national spatial strategy. [14060/06]
Amharc ar fhreagraThe provision of telecommunications services, including broadband, is a matter in the first instance for the private sector companies operating in a fully liberalised market. The Department's regional broadband programme is addressing the infrastructural deficit by building high-speed, open access broadband networks in association with the local and regional authorities. Some 27 metropolitan area networks, MANs, have been completed on time and under budget under phase one of the MANs programme. These completed networks are being managed independently for the State by Enet, the management services entity, and offer wholesale open access to all service providers.
In planning the next phase of the MANs programme a review of the availability of DSL broadband in the regions showed that more than 90 towns with a population of 1,500 and more were not being offered a broadband option by the private sector. These towns were selected for investment under phase two of the MANs programme. A number of regional towns, including Tuam, already had DSL broadband on offer from the service providers, so priority was given to the provision of essential broadband infrastructure in those towns where none existed.
Five towns in County Galway will have MANs constructed under this phase: Athenry, Ballinasloe, Clifden, Gort and Loughrea. The detailed design stage is already under way, project managers have been appointed and construction is expected to begin over the coming months. The cost of the projects in Galway is more than €7 million and the Department will provide grant aid of more than €6 million. These networks should be completed within 12 to 18 months thereafter. Tuam is not part of the current roll-out but may be included in further phases subject to the necessary approvals and Exchequer funding being made available.
Galway County Council has submitted a strong case for a MAN project to be built in Tuam and this is being kept under review. Broadband is available in Tuam. The Department's sponsored website, www.broadband.gov.ie, which facilitates consumers trying to locate broadband service providers in their area, lists 12 Internet service providers offering broadband on digital subscriber lines, DSL, one company offering it via wireless, and 11 satellite broadband providers.
The Department also offers funding assistance for smaller towns and rural communities through the county and group broadband scheme. The scheme is technology neutral, allowing the community to select the most suitable broadband delivery platform for the area. To date, a total capital investment of €2.19 million has been made in GBS projects in Galway involving a total of €533,000 in grant aid to implement these projects.
The bottom line here is very simple because Tuam is designated as a hub town in the national spatial strategy. It has also been designated as a RAPID town for growth by Galway County Council. Does the Minister agree that growth cannot happen without fibre optic broadband? In his reply, the Minister of State indicated that Tuam has broadband. That is no excuse. It is like stating Ireland has a road network and then it transpires those roads are boreens in places where dual carriages are required.
Does the Minister of State agree this is a prime example of the disconnection between various Government strategies? The national spatial strategy designated Tuam as a hub town, and decreed that Government and State agencies would tailor and design their policies to underpin the national spatial strategy. In this case we find that Galway County Council made a submission to the Department for six towns in County Galway, five of which were approved. The one not approved was Tuam, which is the only one designated as a hub town in the entire county of Galway. Does the Minister agree that Tuam simply cannot achieve its potential, attract foreign direct investment or develop as envisaged in the national spatial strategy without fibre optic broadband? The Minister of State's Department refuses to allow Tuam to achieve its potential by not granting the installation of fibre optic broadband.
The fact that Tuam and other large towns throughout the country, including three in my county, had DSL meant the Minister decided to invest in towns without DSL. It is now acceptable that the MANs programme and networks far exceed the DSL programme. For that reason, towns such as Tuam, Thurles, Shannon, Enniscorthy, Naas and Ennis are being considered by the Department. The capital involved to bring these towns up to the level of a MANs project is approximately €60 million. The Department is in discussions with the Department of Finance to advance this issue.
I accept what the Deputy stated. DSL is inferior in ways and large towns such as the Deputy's need a MANs project. The Department is examining that. The overall cost will be approximately €60 million. We must convince the Minister and the Department of Finance to advance that money to the Department. The phase 2 programme will come to an end shortly and we will strongly push to have a MANs project in Tuam and other towns throughout the country.
Will the Minister of State take the situation in Tuam seriously? I will give an example of how important it is. The IDA invested €3.5 million in the purchase of land and the development of a business technology park in Tuam, which was completed more than two years ago. To this day, not one operation has set up in that park. One of the main reasons is the absence of high-speed broadband technology. Will the Minister of State take that message back to his officials and deal with Tuam as rapidly as possible?
I will certainly have discussions with the officials. The Deputy can take it that we are anxious that towns such as Tuam will be brought up to the same status as MANs programme towns. We will put every effort into securing the finances for that.
