Brian Stanley (Laois, Sinn Fein)
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625. To ask the Minister for Communications, Energy and Natural Resources if he will ensure that the infrastructure to facilitate the roll out of the national broadband plan will be kept in State ownership. [19540/16]

Brian Stanley (Laois, Sinn Fein)
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626. To ask the Minister for Communications, Energy and Natural Resources the date on which he will announce the awarding of the contract for the roll out of the national broadband plan. [19541/16]

Denis Naughten (Roscommon-Galway, Independent)
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I propose to take Questions Nos. 625 and 626 together.

The National Broadband Plan (NBP) aims to deliver high speed services to every city, town, village and individual premises in Ireland. Delivery of high speed broadband is a strategic priority under the Programme for Government. This is being achieved through private investment by commercial telecommunications companies and through State intervention in areas where commercial investment is not forthcoming.

The Government had today chosen the Commercial Stimulus Model as the optimum ownership model for the network that will be part-funded by the Exchequer under the procurement process which started in December.  The Government considered two ownership models, having narrowed the options down last December, from five models. The two models are

a) Commercial Stimulus (or ‘Gap Funding’) – the private sector finances, designs, builds, owns and operates the network, with contractual obligations to the Department.

b) Full Concession – the private sector finances, designs, builds and operates the network with contractual obligations to the Department. The asset is handed back to the State after 25 years.

Both Models would deliver the same network, with the same service specifications and controls, for 25 years. In both models, the winning bidder(s) will be subject to stringent contract provisions to ensure that the network delivers quality, affordable high speed broadband to all parts of Ireland that cannot access services. The Department had commissioned detailed costings, down to every individual home in the Intervention Area and, on that basis, had modelled the likely cost of each ownership model.

While I recognise the potential long-term value in the State owning any network that is built, I am advised that under a Full Concession Model, the entire cost of the project would be placed on the Government’s Balance Sheet, with serious implications for the available capital funding over the next five to six years.  Given that both models will deliver the same services and be governed by an almost identical contract(s), I cannot justify reducing the amount of money available to Government for other critical priorities. I am advised also that the Full Concession Model may take at least six months longer to negotiate as part of the Procurement process and my priority is to have a contract(s) in place as soon as possible.

The current procurement schedule aims to have a contract(s) in place by June 2017. There are numerous stages in the procurement process and each stage is dependent on a number of factors, including the complexities that may be encountered during the process.

The two ownership models differ principally after 25 years, when the asset would either revert to the State, or to the full control of a commercial telecoms operator. I am confident that we can put in place measures to ensure that services continue after 25 years, in the case of the Commercial Stimulus model.  In this regard, I have already raised the question of a Universal Service Obligation (USO) for High Speed Broadband, at EU level and have also had discussions with ComReg about a form of USO in areas where commercial providers have already built high speed broadband networks.