National broadband plan was in crisis long before the Naughten controversy

The Government’s national broadband plan was in crisis long before the controversy surrounding former minister Denis Naughten’s meetings with the lead bidder brought things to a temporary halt last month.

So while Peter Smyth's review appears to draw a line under the issue, clearing both Naughten and US businessman David McCourt of unduly influencing the tender, there are bigger, more substantive, questions still hanging over the process.

Questions like why has the plan, promised since 2012, been effectively shunned by the industry here, particularly when a fat Government cheque and big slice of the telecoms market is up for grabs.

And why has the cost of the scheme ballooned? While the €3 billion figure, touted in recent media reports, may be an exaggeration, the cost is definitely more than the Government had expected.

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We have direct evidence of this from the minutes of a meeting between McCourt and Department of Communications officials, including the minister, in June.

They detail Naughten complaining about company’s “conservative position” on price and that this was likely to mean a higher public subsidy than he, as minister, could recommend to Government.

With only one bidder left in the race, the Government was always going to be over a barrel on price.

Tangled mess technology

These issues should, at the very least, warrant a rethink. Halting the process and admitting it’s not quite right undoubtedly holds little appeal for the Government, not least one that is frequently accused of being too urban-centric, but it may be the correct one for the country.

Governments all over the world are struggling to formulate an adequate response to the problem of rural broadband. The UK just recently gave up on a plan to equip all rural households with fibre broadband on cost grounds, while Germany’s plan to upgrade its ageing copper network with a new vectoring technology has also run into problems.

Telecommunications used to be just one technology channelled through one network, now it’s a tangled mess of competing technologies and overlapping infrastructures, which keep spawning new iterations and new levels of demand.

If the Government had decided to abolish the current tender on foot of advice in the Smyth review, namely that Naughten’s or McCourt’s actions had compromised the process, it would almost certainly have faced a legal challenge.

By allowing the procurement process to proceed, it can still accept or reject Granahan McCourt’s bid on the grounds of what is best for the State.