Billy Kelleher (Cork North Central, Fianna Fail)

I thank the Senator, as I am pleased to have the opportunity to address this issue. As evidenced by previous debates, broadband availability has been recognised as a priority for Government in the national development plan, the programme for Government and, most recently, in Building Ireland's Smart Economy — A Framework for Sustainable Economic Renewal, which placed further emphasis on the importance of broadband connectivity as a key element of future sustainable economic growth. The Government believes broadband is a key enabling infrastructure for the knowledge-intensive services activities on which future prosperity increasingly depends.

Bearing in mind these policy imperatives, the national broadband scheme, NBS, was established to encourage and secure the provision of broadband services to certain target areas in Ireland in which broadband services were not available and were unlikely to be provided by the market. The wider policy objectives of the NBS were to address the market's failure to provide broadband in the more remote parts of rural Ireland, to address economic and social exclusion concerns due to a lack of broadband access and to enhance the competitiveness of the regions for foreign and indigenous investment. The NBS was designed during 2007 and a public procurement process — competitive dialogue — was run during 2007 and 2008 to appoint an appropriate service provider. Hutchison 3G Ireland, trading as 3, was the preferred bidder and was appointed on 23 December 2008 to run the scheme. 3 is required to provide a service to all NBS premises that seek a service. All premises must be covered by the NBS service by September 2010. 3 continues to progress its network roll-out and NBS broadband services are available in almost half the 1,028 designated electoral divisions to be covered under the scheme. To implement the NBS, a map based on electoral divisions was developed following completion of the assessment of broadband coverage in the State in mid-2008. At that time, the Department had to determine which electoral divisions should be included in the NBS.

EU State aid and competition rules govern how states can intervene in areas where there are existing service providers. Broadband platforms do not respect exact geographic boundaries and are difficult to define due to radio propagation or DSL reach issues. The nature of broadband networks is such that they provide a coverage footprint over a certain area rather than an individual link to isolated premises. It was essential to guard against the NBS coverage footprint spilling over to an extent which would be unacceptable from a State aids perspective into surrounding areas served by existing service providers. Accordingly, unacceptable market distortion would have resulted from including premises located in areas considered to be substantially served by existing service providers. These areas had to be excluded from the scope of the scheme and will not be addressed by the NBS. Uncovered buildings in the electoral divisions excluded from the NBS — approximately 12,500 buildings, represent 0.7% of all buildings in the State.

In addition to those premises identified as being outside of the coverage of service providers, there are also premises that appear to be in a covered area but due to local obstacles or technical issues are not able to avail of coverage from the existing broadband operators. For example, the premises may be too far from the nearest DSL enabled telephone exchange or may not be in the line of sight of the local fixed wireless access service providers' base station or cell. Similarly, the initial cost of connecting to available satellite service providers may be prohibitively expensive for many people.

There is no substantiated estimate of the number of consumers who find themselves in this position and a key element of putting a scheme in place will be an exercise to identify those remaining premises where no broadband service is available. In a fully liberalised market it is essential to intervene only where the market is unable to provide a service and my Department will consult fully with the existing service providers in this respect.

Funding for rural broadband has become available under the European economic recovery plan through the European Agricultural Fund for Rural Development, EAFRD, administered by the Department of Agriculture, Fisheries and Food. The Department for Communications, Energy and Natural Resources is responsible for developing a new measure under the rural development plan to use this funding to address the issue of basic broadband availability to remaining unserved rural premises outside of the NBS areas. "Rural" in this case is defined under the rural development plan by the Department of Agriculture, Fisheries and Food and excludes the following areas: the city council boundaries of Dublin, Cork, Galway, Waterford and Limerick; the borough council boundaries of Kilkenny, Sligo and Wexford; and the town council boundaries of Athlone, Ballina, Castlebar, Cavan, Dundalk, Ennis, Killarney, Letterkenny, Mallow, Monaghan, Mullingar, Tralee, Tuam and Tullamore. A total of €13.413 million under the EAFRD is available for the broadband initiative. This allocation, being 75% of the total, will mean a total available funding of €17.884 million for the initiative. This funding will allow for expenditure up until the end of 2012.

State aid approval has been granted by the European Commission as part of the overall process of securing the necessary approvals and funding for the scheme. This approval was obtained early in the process of planning and design of the scheme and was granted on the basis of a high level description of the proposed scheme. The clearance is based on a number of conditions which must be observed in the final form of the scheme. Detailed planning is under way for a scheme which would offer a basic broadband service to rural unserved premises.

The key qualifying criteria for the scheme will be that the premises in question is outside of the areas covered by the NBS, in a rural location as defined under the rural development plan and not capable of being served by existing service providers. The key component of the scheme will be to identify applicants who fulfil these conditions. I stress this scheme will not be available in locations served by existing service providers and the Department of Communications, Energy and Natural Resources will consult existing Internet service providers to ensure the scheme does not encroach on their existing customer base and to verify that applicants are unable to obtain a broadband service.

This scheme should not be regarded as an option in cases where consumers are unhappy with the level of service available to them from existing providers. Service providers already have complaint procedures in place to resolve issues of this kind. In a parallel exercise, there will be a competitive process to engage a service provider who will offer a broadband service to qualified applicants under the scheme. While the exact details have yet to be finalised, I expect the service offered under this scheme would at least match the service offered under the NBS. This process will be technology neutral and it will be a matter for the bidders to decide which technical approach they propose in their bids. The proposed scheme is intended to complement Ireland's previous broadband intervention initiatives and will, subject to the market responding to the scheme, ensure the remaining unserved rural premises will be able to avail of a broadband service. This underlines the Government's commitment to the goal of ubiquitous broadband. It is intended to commence the scheme this year with the identification of premises not capable of receiving broadband. It is expected the roll-out phase of the scheme will be carried out during 2011 and 2012.