Seanad debates

Tuesday, 22 November 2011

5:00 pm

Photo of Fergus O'DowdFergus O'Dowd (Louth, Fine Gael)

I thank Senator Clune for raising the important matter of international communications connectivity. I am also glad to have the opportunity to highlight 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 and welcome any investment such as this project that would lead to improved international connectivity. There have been significant investments by various market players in recent years, all of which have added to Ireland's international connectivity capacity.

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 would 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 must meet the tests of capital appraisal. Affordability is another key consideration, particularly in the current acutely difficult fiscal climate.

Nonetheless, I recognise the importance of electronic communications infrastructure to national and regional economic development. Cork city has a significant presence of electronic communications infrastructure. There are plans to roll out additional backhaul infrastructure which would help in making Cork even more competitive in the provision of backhaul services. A direct connection into Cork would enhance the region's attractiveness for FDI, foreign direct investment.

The international connectivity market is, however, a commercial market. Any proposed intervention would have to avoid distorting the market and avoid undermining investments made by other market players. It would be unfair to intervene in the market in a manner that would cut across those who have invested private funding in the building of international connectivity networks.

While I welcome additional international connectivity to the island from other countries, no deficiency in connectivity has been brought to my Department's attention. The existing network owners have significant capacity available while other consortia are in the process of planning transatlantic connectivity with connections to Ireland.

The next generation broadband task force, chaired by the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte, and of which I am a member, is considering how best to facilitate the roll-out of next generation broadband across Ireland. While several issues are being considered and progressed, the matter of international connectivity is not one which is a cause for concern.

While I would be glad to see direct international connectivity coming into Cork, my Department cannot undermine investments already made or other possible private sector investment by an intervention in this commercial market. If in the future a decision is taken to intervene in the market, the Department will abide by the various laws and rules governing state aid. The Department will also be required to ensure any intervention warrants the Exchequer funding required and the procurement process is open to any party that might have an interest.

I thank Senator Clune for raising this important topic and I am glad to have had the opportunity to clarify the important matters raised.


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