Mr. Patrick Neary:

Analysys Mason submitted a paper to the committee today. I will explain the intent of that. When the area including 300,000 households was removed from the process, it created what the ESB referred to as a doughnut of premises around towns and villages that bidders would now need to traverse to get to the intervention homes. That is 5 or 6 km out the main roads of villages and part of the way down boreens but not all the way to premises at the end of the roads. Bidders were faced with trying to traverse that area and they considered two options. One was to use an active product that Eir was developing which reused the fibre that was deployed to service the 300,000 households. The bidder would plug in its own fibre at the end of that area of 300,000 households to address the intervention area or, alternatively, the bidder could rent poles and ducts from Eir to deploy, or use its own structure in the ESB's case, to get across the area of the 300,000 households. Both options involved network infrastructure sharing and reusing infrastructure. In the active wholesale product option, the fibre is being rented, but that includes the cost of the rental of the pole and duct that is holding up that fibre and the active equipment, the electronics that are in the telephone exchanges from which Eir manages fibre. The pole and duct rental option means that a company would be renting the physical pole and the duct in the ground and deploying its own fibre through it.

We spent a lot of time with the bidders looking at preferred options and which would work best. It became apparent that the best option was different for different bidders. Open Eir's preference was to use the active product and plug the fibre into the fibre that was already on the build that had been done for the 300,000 households. It was apparent that the other bidders preferred just to use the physical infrastructure of poles and ducts and deploy their own fibre. The main rationale for that was that those bidders demonstrated that, due to where their design was starting from - metropolitan area networks, MANs, in the case of Granahan McCourt and ESB substations in the case of the ESB - there was not the same cost benefit of using the Eir fibre based on the topology. At the same time, the cost of the poles and ducts was reduced somewhat based on the volume of poles and ducts that were being used by Granahan McCourt in particular. It got a lower price for using the pole and duct infrastructure. That option became a cheaper one and was then more cost efficient for Granahan McCourt to use. The ESB said in its evidence that it was more cost effective to use its own infrastructure.

Eir, on the other hand, continued because the design of its network obviously fits directly into where that fibre can be accessed at its exchanges and at the other end towards the intervention area.

It could achieve cost savings in using that product. That is why Eir chose-----