Jan O'Sullivan (Limerick City, Labour) | Oireachtas source

I am sharing two minutes with Deputy Breathnach. The question of rural broadband is not about whether or not we should deliver it. Everyone agrees that we should have comprehensive broadband for everyone in this country. Everyone wants the benefits for regional employment, e-health services and new opportunities to access education. Labour wants equality of access to high-speed broadband across the country. Access to the Internet is now essential for social inclusion as well as for economic opportunities. Our European manifesto seeks the formal recognition of digital rights. In our view, everyone should have a legal right to access to the Internet. As part of digital rights, everyone should also have legal protection of their personal privacy online and protection from online bullying and harassment.

Labour has a very different vision of how access to the Internet should be achieved, in a way that is better and safer for the Irish people. This week's announcements can only be understood as being political. They were clearly designed to influence the local and European elections in two weeks' time. The Government is proposing to spend €3 billion of the people's money on a private monopoly which will own the network forever. The proposed contract will last for 25 years. What happens then? The private monopoly will then be in a strategic position to charge significantly more. We also understand that the current private venture capital company involved in the Government's plan will be able to sell its shares in nine years' time, which means that the Government has no idea who will ultimately own this network. The proposed contract will only allow the Minister to block the sale of shares in the first nine years.

We know the sole bidder in the national broadband plan is a venture capital firm, not a telecommunications company. It seems obvious that it sought, and was given, the option of selling Ireland’s rural broadband network at some point in the future. Our biggest concern comes down to the question of ownership of the national broadband network. In the current plan, it is possible that vulture funds could buy up the body to be called National Broadband Ireland to squeeze more money out of the quarter of our people who will be reliant on it. It would be an entirely different matter if the public was to own the network rather than a private monopoly, even if the final cost needs to be €3 billion. There is no reason why we cannot set up a national broadband company as a commercial semi-State company. That is how we delivered electrification and the national gas network. Fianna Fáil should never have privatised the national telecommunications network because the current situation shows that the public keeps on paying more for that grievous mistake. In this case, Eir has positioned itself as the gatekeeper for broadband outside of the towns. Fine Gael's National Broadband Ireland will have to pay Eir for the use of its ducts and poles. If we had kept telecommunications in public ownership, we would not face hundreds of millions of additional costs as part of rolling out rural broadband.

We need to be clearer with people about the scale of this project's costs. Some €3 billion is an extremely large sum of money. It was only a few years ago that we were desperately trying to find a few million here or there to protect vital health services and other public services from the 2008 economic collapse. If we divide the €3 billion over every household in Ireland, it represents a cost of more than €1,750 for each family or individual householder. We will recoup some of that cost through VAT and other taxation, but we could have reduced the cost and recouped more if we cut out the profit-making part of the project. A significant portion of the cost of this project is to give the venture capitalists a large profit on their investment. The Secretary General of the Department of Public Expenditure and Reform has described the level of profit to the investors as "very high" for the level of risk they are taking with this investment.

What exactly are these venture capitalists bringing to the project that could not be provided by a publicly-owned broadband company? It is hardly expertise, as they have only 20 or 30 employees engaged on this project at present. They are yet to employ the bulk of the projected 265 staff for National Broadband Ireland. We do not need them for access to money. We rescued the public finances in order that Ireland can borrow once again on the international market and interest rates are at an all-time low. Is there something the Government has not told us about this project being on or off the State's balance sheet? If the private investor is paying significantly less than 50% of the cost, as seems to be the case from the figures we have received, and the State is paying more than 50%, I understand that the project will be on the State books regardless of who owns the network at the end.

Why on Earth will the people not own the network after the 25 year contract? Almost all previous public-private contracts involved the public ownership of the asset at the end of the period. That is the norm. Why is this project different? According to the papers released yesterday, this was a Fine Gael Government decision taken in July 2016. That date is significant. Labour left Government on 6 May 2016. At that point, the Government had made no decision on the future ownership of the broadband network.

A few weeks later, the new Fine Gael Government made the most unusual decision that, rather than the network reverting to the State after 25 years, it should be owned entirely by the minority investor. Every PPP we contracted ended with the project, be it a road, a school, or a health centre, being owned by the public. Why was this policy not applied to the broadband network? That is the nub of the issue.

Not only has the estimated cost of the project gone up even as the number of homes to be served has gone down but it is incredible for the public to pay so much money and still not own the network. It is not just the Labour Party saying this represents poor value for money. Senior officials in the Department of Public Expenditure and Reform have said so. We established that Department to safeguard the public's money and we thought that we had moved into an area of greater political responsibility with the public's money. Instead, what we have seen in recent weeks is not one but three major cost overruns in capital spending under Fine Gael. The national children's hospital will be the most expensive in the world. The Dublin metro may now cost €4-5 billion, according to the Taoiseach and €3 billion is to be given to a profit-making private monopoly for a broadband network that the public will never own.

The Labour Party wants to see high-speed rural broadband delivered as soon as possible, and we are committed to covering the necessary cost as long as the network remains in public ownership. We must have public ownership so that we control costs more effectively in future years. In 25 years, access to broadband will be even more essential than it is now. People will be routinely accessing healthcare advice and consultations from their homes, and conducting business from their homes and farms using broadband and a private monopoly will own the network. Potentially, vulture funds will own the network. Fine Gael has failed to explain what added value a venture capitalist brings to this whole consortium at a time where the State can easily borrow the money.

When we delivered rural electrification, it was through a public enterprise that has served this country well and faithfully for generations, as a quality employer and as a profitable company that paid €1.5 billion in dividends to the State following the 2008 crash. Modelled on rural electrification, we should have an ESB-style national broadband company to retain control over prices into perpetuity and to eliminate the possibility of ruthless investors taking over rural broadband. Twenty-five years might seem like a long time, but learning the lessons from 2008, which is now 11 years ago, it should be clear that there are too many risks involved in letting a private monopoly run our broadband network. The public was rightly determined, as was the Labour Party, that Irish Water should never be privatised. Why does Fine Gael think that the public would accept that a utility as important as broadband would be privatised from the outset?

See this speech in context