The Cabinet will this week sign off on a rather central aspect of the National Broadband Plan, one that will have implications for the quality of access to education, healthcare and business opportunity for decades to come.
Up to now, the focus has been on the rollout of the scheme and the homes covered by the intervention. Little attention has been paid to who will own the infrastructure once it is built.
The Government has shortlisted two options. The full-concession model would see the network revert to State ownership at the end of the 25-year contract. The gap-funded model would involve a one-off State subsidy, with the winning bidder or bidders retaining ownership.
The choice will determine the size of the State’s contribution. Naturally, the Government is staying shtum on the differential involved, not wanting to give bidders a sense of the value it attaches to the project.
The gap-funded option, while cheaper in the short term, is likely to afford one or two big players, possibly Eir or Vodafone/ESB's joint venture Siro, unrivalled dominance in the marketplace.
Allowing companies to be network owners as well as retail providers can, in theory, queer the pitch in terms of price, but it’s hardly unusual.
Eir already operates on both sides of the divide in the commercial market. Its infrastructural arm, OpenEir, rents space on the network to rival operators such as Vodafone, BT, Magnet and Sky, as well as its own retail arm. Whether this results in higher prices for consumers is open to debate, though a recent survey did suggest average broadband prices here are twice the European average.
That said, the company’s role as wholesale provider is being reviewed by ComReg amid allegations of discriminatory practices. This could lead to a functional separation along the lines of BT in Britain, which is forced to operate its retail and wholesale arms separately.
Allowing the winning bidder to maintain ownership may also bring up ugly comparisons with the sale of the State’s second mobile phone licence in the 1990s, which is still seen as a template for what not to do.
