Mr. Fergal Mulligan:

I welcome the opportunity to go through the background to the project, which has been in the offing since we published the draft intervention strategy in July 2015 and the final intervention strategy that went through Government and significant stakeholder engagement in 2015. It is important to be aware of that backdrop and what was agreed in 2015 before we launched the procurement process because that set the stage for our current position. The fundamental objective then and now is to deliver high-speed broadband to every premises in Ireland, regardless of how remote or rural they are. That is in keeping with the mission statement of the overall 2012 national broadband plan.

One of the key tenets of the national broadband plan is to stimulate and extract as much commercial investment from the market as possible without the need for market intervention by the State, which is an essential requirement of State aid guidelines and must be followed by every member state. Broadband is nationally available from a number of operators. There are probably up to 100 operators selling broadband across the country and, therefore, the key prerogative for us is to ensure we only intervene in areas where we will deliver high-speed broadband. A key area on which we had to decide in 2015 is what we meant by high-speed broadband. In that context, in December 2015 we concluded that we would only intervene in areas where we would deliver at least 30 MB download speed and 6 MB upload speed and published seven expert documents that set out what that meant. Analysys Mason, our technical adviser, set out in great detail what is meant by 30 MB down and 6 MB up. It does not mean service providing up to those speeds, rather minimum speeds of 30 MB down and 6 MB up, along with several other technical characteristics. That will ensure that the network is resilient, of high quality and will stand the test of time. In addition to criteria on the 30 MB and 6 MB speeds set out in 2015, a key requirement is that the network would be future proofed over the 25 years of the contract. It is not a question of whether a download speed of 30 MB will be sufficient in 2030 or 2040 because it will not. The network to be built will stand the test of time, which is true to the 2015 statement and our current position. That gives an assurance to commercial operators offering low-speed or basic broadband that we will not intervene in areas where they are delivering 10 or 15 MB but will only do so if there is a need to deliver step change to consumers. That is a key tenet of the State aid guidelines.

Another key tenet of the 2015 strategy and the State aid guidelines that every member state must follow is that one must maximise the reuse of existing infrastructure. As all members know, there are many networks across the country that deliver telecoms, involving poles, ducts, towers, masts and, with the advent of the legislation, the electricity network. There are many demands in this area. There is the rail and many other networks. Coillte is in the telecom space. Those networks must be leveraged to minimise the cost to the State and commercial operators of building this rural network. That is being worked on with any company that is willing to offer up its network. In terms of any regulated company, the regulator is part of the process to ensure the relevant access obligations are in place and appropriate prices are set. In the telecom space, the Eircom poles and ducts are regulated and ComReg has a very clear role in that regard. The ultimate objective of the strategy is to stimulate growth and jobs and to ensure that any Government strategy such as e-education, ehealth and etourism is facilitated through the nationwide availability of high-speed broadband. That was our starting point in December 2015.

Another key prerogative is that it is an open access wholesale network. We are not subsidising a retail network or retail service providers but, rather, are subsidising and the commercial sector is investing in a wholesale network. The metropolitan area networks are currently being sold by Enet on a wholesale basis and Open Eir, the wholesale arm of Eir group, offers wholesale services. The entity to which we are referring in notional terms as the NBPCo until it has formally been named will only sell open access wholesale services, probably to 50, 60 or 80 retailers. Ultimately, consumers will have absolute choice in terms of broadband and other services the network will allow to be delivered, such as television, voice telecommunications, high-speed lease line services for businesses and so on, which is typical in the market. It is an open access wholesale network and will deliver consumer choice and competition at the retail level.

In July 2015, we began work on our draft strategy, a process informed by experts from economists across Europe. PricewaterhouseCoopers was our main adviser on strategy and KPMG also advised on ownership, funding and so on. Analysys Mason was the technical expert. These experts came together and we concluded in December 2015 on a number of facets to which I have referred. It was decided that we would tender for three lots. In July, it was intended to tender for four lots but, following consultation, over 60 responses to our July 2015 consultation were received, one of which included approximately 50 operators. We engaged with more than 150 stakeholders in 2015 to arrive at our strategy in December 2015.

We landed on having three lots. Essentially, that was the north and the south of the country and there was the option to win lot C, which was both lots together. That is what all the five consortiums that came forward in March 2016 said they would be willing to bid for. Three of those consortiums qualified in July or June 2016. The three remaining bidders in September and the remaining bidder today all had subscribed to bidding for all three lots, therefore, none of them had ever opted for any one particular lot. As to the reason one would opt for the lots, up to now it was seen as a key driver of competition and possibly allowing smaller networks an opportunity to bid. In France, for example, where one area of the country might have 500,000 premises, they would have 40 or 50 equivalent lots, because it is done by municipality. In Germany, there would be many different lots because it is done on the basis of geographic area. In the UK, Broadband Delivery UK would have split the UK, Scotland and Wales into many different areas and in that way different companies would have the opportunity to bid. That is the way it is done in every member state. One divides it up rather than having one big procurement process and one big lot. That is the history of the lots.

In terms of state aid, since 2014 we have had many visits to Brussels to meet the DG COMM unit, which is responsible for overseeing our process and, ultimately, it will be responsible for delivering a state aid approval letter before we issue a final tender. It is responsible, as set out in the state aid guidelines, to ensure that each member state only intervenes where it absolutely has to and that no taxpayer moneys go into geographic areas, cities, towns or counties where commercial operators have already delivered, or have concrete plans to deliver.

Mr. Patrick Neary will go through the mapping process with the members shortly, which involves how one decides or confirms if there is a concrete plan from a commercial operator or whether plans that were promised three years ago are happening on the ground. That is an intricate, complicated and detailed process because we are talking about every road, street, house and business in the country that we must analyse and examine. We started that process in 2013 when we issued many questionnaires to every single commercial operator in the country asking them to outline their plans, if they will deliver high speed broadband and, if they will, to submit their plans in order that we could examine them. Mr. Patrick Neary will go through all that detail shortly. Under the state aid guidelines, that is a key tenet, namely, to identify the areas of market failure and decide on what way to intervene, which is what is in our strategy. We did all that in 2015. The map is dynamic and it must remain so as any commercial operator can at any time decide it will invest money in this particular area. Over the course of 2015, we engaged with the European Commission and consulted it on the map we published in 2015, along with our strategy and the procurement launch in December 2015, and it was very satisfied with our mapping process. To date, it has not raised any issues. We have gone through the whole pre-notification process. We issued the first one in 2015. We reissued an updated pre-notification in August 2016 just to bring it up to date. We intend to move to the final notification process in the coming weeks. At that stage the European Commission will engage in reviewing the overall process in a little more detail and give us a final letter of approval before we would have a preferred bidder or a contract awarded. From a state aid perspective, we have gone through a great deal of detail with the European Commission, ComReg has been consulted and we believe we are in a very good place in that regard. That is the general process. I will now hand over to Mr. Patrick Neary who will talk the members through the mapping process.