Fall-out from Esat Digifone haunts broadband bidding process

The ghost of Esat Digifone is still beating at the door of the Department of Communications, it seems.

The latest delay in the awarding of contracts under the National Broadband Plan (NBP) has been linked to the sale of the State’s second mobile phone licence, a process that scarred the surrounding landscape.

To ensure the current broadband tender avoids the same fate, officials have the three shortlisted bidders – Eir, Siro and Enet – drowning in paper work.

A whopping 2,000 pages of contract documentation has been issued so far, while the department anticipates a further 300 hours of dialogue with the consortia before the final tender is even published and bidding can commence.

“The process is intense, complex and bears considerable risk for both the State and bidders. It is important to afford the process the time it needs, to achieve the prize that has been identified as the solution,” the department said.

Perhaps we should applaud such attention to detail rather than whining about the delay, which is only likely to be a few months anyway.

Intervention footprint

A potentially bigger problem is the size of the department’s intervention footprint, which has swelled to 927,000 homes, making it the largest per capita telecoms market intervention anywhere in the world.

The department was recently forced to add 170,000 homes from areas not originally covered by the plan on account of commercial operators reneging on their business plans.

The crux of the issue lies in the difference between “premises passed” by the new technologies, the phrase industry uses, and those that can be connected to it, the threshold the Government insists upon.

Eir has also pledged to connect some 300,000 homes currently earmarked for the plan by the end of 2018. This means a third of the homes may already have superfast broadband by the time the NBP train arrives.

Both these moving metrics, which will have a major bearing on the cost of the scheme, will eventually have to be set before the bidders put their money down and it’s unclear where the line will or should be drawn.