Mr. Peter McCarthy:

No. I will explain it now. ETNL was separated from Enet in 2015. They are two distinct buckets on the Enet side of the house, namely, the MANs business which is Enet, and the wholesale business which is ETNL. There is a retail business which sits over to one side, which is AirSpeed Telecom. The MANs were built by the State. They were merely rings of fibre in rural areas, which were not connected either to buildings or backhaul networks. A ring of fibre was built in the centre of a town and one basically had ducts with one fibre cable in the ducts. That is all one had. It is a dead piece of infrastructure until one lights it up and connects it back through the backhaul network to some sort of termination point, probably in Dublin, where one will get international connectivity. Without backhaul, the MANs would have been a complete waste of money as local traffic would not have the ability to reach other destinations. Some €176 million of taxpayers' money would have been wasted. The State would not be in a position to receive nor would have been in receipt of the financial or policy benefits yielded to date. Analysys Mason stated in its report that without these backhaul connections, the MANs would be islands of connectivity with limited usefulness. Enet invested heavily in connecting the MANs to a national network, thereby making them utilisable and allowing regional broadband traffic to terminate in Dublin. The only party at that time that had that type of backhaul connectively outside of the incumbent Eircom was BT. By putting in this network, we increased the competition in reaching these areas. The investment to date has been in excess of €50 million on this infrastructure, outside of the MAN infrastructure. That investment of €50 million is on top of the €31 million. Therefore, the Enet group of companies has State owned assets as well as private owned assets. On this basis, Enet created a company ETNL to hold the non-MAN assets. This process acts to separate out the concession assets and the non-concession assets so that the State's assets remain easily identifiable at all times. The company has an inter-company pricing policy between the entities Enet and ETNL. This inter-company pricing is agreed with the Department of Communications, Climate Action and the Environment.

Not having been involved in any of the process prior to October 2018, I went through the records of the business and consulted a great many documents to see what happened in respect of the splitting of the entities, how the pricing worked and how the contracts were constructed.

I have found that the company has acted in good faith at all times when going to do anything in that it has gone to the Department first and said, "We are thinking of doing this, this is how it is going to look, this is how it will sit, this is the way the contracts will be constructed and this is how we propose to do our pricing". At all times, we have had that signed off by the Department in advance of making any specific moves, and that includes changing prices and anything else.

I have reviewed, in particular, documentation exchanges between the Department and Enet in respect of Enet seeking agreement to set up ETNL and how the relationship between ETNL and Enet would work, the transfer pricing proposals and draft agreements, including Enet acting as agent to customers in order that they have the simplicity of a single bill. In the case of AT&T, Verizon and some of the large operators, which are trying to connect multinational companies, customers do not want to be dealing with two entities and two bills. We are trying to provide a simple service and it is clearly documented because if it was not, we would end up with a grey area. We have gone to great lengths to try to ensure that does not happen.

Enet did not embark on the process, including the agreement on transfer pricing, without the consent and agreement of the Department. I am specifically referring to documents between the end of 2014 and the beginning of 2015, when ETNL was set up, which is important. I have seen a correspondence chain between the Department and ourselves on that.