Pat Rabbitte (Dublin South West, Labour)

I am pleased to have the opportunity to address the House on the important topic of international communications connectivity. I am also pleased to have the opportunity to highlight some of the factors that must be considered by the Government before any decisions to intervene in commercial markets can be taken.

I am well aware of the Hibernia Atlantic Express project raised by Deputy Harrington. I can inform him that my Department has met with Hibernia Atlantic in recent months. There was a clear understanding that the company was prepared to install a branching unit to allow a subsequent link up. In recent weeks Hibernia has advised that the company would no longer be prepared to discharge the costs involved. I am happy for the Department to engage with Hibernia to ensure that the option for international connectivity is protected if that is possible. I am advised that Hibernia understands the procedures that the Government must comply with, especially in circumstances where there is more than one potential applicant.

I would very much welcome any investment that would lead to improved international connectivity. Indeed, we have seen significant investments by various market players in recent years, all of which have added to our international connectivity capacity. It is important to note that the electronic communications market is, and has been since its liberalisation, a commercial competitive market. Accordingly, the State can only intervene in the market in limited circumstances, for example, where the market is failing to provide services. In such circumstances, the State intervention can only take place following state aid approval from the European Commission and a public tender procurement process.

In addition, any such assistance would have to demonstrate that value for money would occur. Accordingly, proposed projects are required to meet the tests of capital appraisal. Affordability is also a key consideration, particularly in the current acutely difficult fiscal climate. I do, nonetheless, recognise the importance of electronic communications infrastructure to national and regional economic development. As the Deputy indicated, Cork city has a significant presence of electronic communications infrastructure. I understand that there are well-advanced plans to roll out additional backhaul infrastructure and therefore address the issue of making the region even more competitive.

It is the case that a direct connection into Cork would enhance the region's attractiveness for foreign direct investment. However, the international connectivity market is, as already mentioned, a commercial market. Any proposed intervention would have to avoid distorting the market and avoid undermining investments made by other market players. While I would, of course, welcome additional international connectivity to the island from other countries, I understand that the existing network owners have significant capacity available. I am also aware that other consortia are in the process of planning transatlantic connectivity with connections to Ireland. I am grateful to Deputy Harrington for raising this important question.

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