National Broadband Plan

www.broadband.gov.ie

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Ireland’s Broadband Intervention Strategy

Updated - December 2015

National Broadband PlanCONNECTING COMMUNITIES

1. Connecting Communities: A message from Minister Alex White, T.D. 2

2. Introduction 4

3. Purpose of this document 5

4. Background 8

5. Vision – High speed broadband for all 11

6. Objectives 14

7. Who will benefit? 16

8. Key elements of the updated strategy 20

8.1 The intervention area

8.2 Highspeedbroadband–definitionofservices

8.3 Characteristicsofthenetwork

8.4 Whowillownthenetwork?

8.5 Howthenetworkbuildwillbefunded?

8.6 Procurement

8.7 Ensuringthatthenetworkdelivers

8.8 Keyfeaturesofthewholesalenetwork

8.9 Timeframesforrolloutofthenetwork

8.10 Timeframesforconnectingpremises

8.11Connectingconsumers–existingandnewpremises

8.12 Availabilityofservices

8.13Demandmeasures

9. Appendix I – High Speed Broadband Map 2020 38

10. Appendix II - Map of the procurement lots 40

11. Glossary of terms 42

Contents

Connecting Communities -AmessagefromMinisterAlexWhite,T.D.

Connecting Communities -AmessagefromMinisterAlexWhite,T.D.1 1

The publication of this National Broadband Plan (NBP) intervention strategy is a defining moment for telecommunications in Ireland. It marks the launch of a major Government procurement process which will deliver a high-quality infrastructure that stands the test of time and reaches all parts of Ireland. It will see every citizen in Ireland having access to quality high speed broadband services. ThehistoryofbroadbandinIrelandhasbeenmixedandtheNBPrecognisesforthefirsttimethatqualitybroadbandisautilitythatisjustasimportantaselectricity.ItisbyfarthemostsignificantGovernmentcommunicationsprojectinIreland’shistory,anditwillestablishusasaninternationalleaderinthisfield.PreviousStateinterventionshavestruggledtokeeppacewithconsumerandbusinessdemand,whichhasrisenexponentiallyonfootofrapidtechnologicaldevelopments.ThisGovernment’scommitmenttodealconclusivelywithIreland’sbroadbandchallenge,coupledwithourproductivecooperationwithindustry,willchangethat.

Aninterventiononthisscalerequiressubstantialfunding.ThisGovernmenthasallocatedaninitial€275millionfortheNBPnetworkbuild-out.Weexpectthatfurtherfundingwillbecomeavailableoverthelifetimeofthecontract,whichwillbeforupto25years.Thiscomplementsacceleratedcommercialinvestment.Industryisinvestingsome€2.5billiontorolloutenhancedtelecommunicationsservices.Highspeedservicesarenowavailabletoapproximately1.2millionpremisesinIreland.Bytheendof2016,70%ofpremises–1.6millionproperties–willhaveaccesstoqualityhighspeedbroadband.Thisinterventionstrategyfocusesontheremaining30%ofourcountry–areaswherethereisnocertaintyofcommercialinvestment,butwherefamiliesandbusinessesareequallyentitledtohighqualitybroadbandaccess.

ThisGovernmentrecognisesthateffectivebroadbandconnectivityisvitaltosocialinclusionandeconomicgrowthatlocalandnationallevels.TheNationalDigitalStrategyhasdemonstratedthepossibilitiesthatdigitaltechnologiesoffercitizens,communities,schoolsandsmallbusinesses.TheNationalBroadbandPlanwillenhancethesepossibilitiesanditconfirmsourdeterminationtoensurethatallourcitizenshavethesameaccesstoinformation,culture,ideas,andalltheotheropportunitiesthatqualitybroadbandoffers.

Everyaspectofthisstrategyhasbeencarefullydesignedanddeveloped,withmaximumconsultationwithindustryandotherstakeholders,inordertodeliverthehighestlevelofbroadbandaccessinthebestpossibleway.

Iamconfidentthatitwillbringenhancedequityandopportunity,transformourcountryforthebetterandhelpusrealiseourconnectedfuture.

____________________________Alex White MinisterforCommunications,EnergyandNaturalResources,December2015

Ireland’sBroadbandInterventionStrategy–UpdatedDecember2015 Ireland’sBroadbandInterventionStrategy–UpdatedDecember2015 32

3:Purposeofthisdocument

The NBP is a Government policy initiative which aims to deliver high speed broadband to every citizen and business in Ireland. This is being achieved through a combination of accelerated commercial investment by telecoms operators, and a proposed State intervention to provide high speed broadband to those parts of the country where there is no certainty that the commercial sector will invest.

Ireland’sBroadbandInterventionstrategywaspublishedon15thJulylastforpublicconsultationseekingtheviewsofindustry,stakeholdersandmembersofthepubliconthedetailedmeasuresproposed.Thispublicconsultationranuntilthe25thSeptember.Over40submissionswerereceivedandcarefullyconsideredbeforethestrategywasrevised.Thisupdatedstrategydocumentreflectstheoutcomeofthisconsultationprocess.Itshouldbenotedthatthecompetitiveprocurementprocesswillbeunderpinnedbythekeyprinciplesoutlinedinthisdocument.

ThisdocumentsetsoutaseriesofdetailedGovernmentpolicyobjectivesinrespectoftheproposedStateintervention.Specificallyitsetsoutthekeyelementsoftheintervention-whatservicesarerequiredandhowtheywillbedeliveredbythesuccessfulbidder(s).

Introduction2

4 Ireland’sBroadbandInterventionStrategy–UpdatedDecember2015

Purpose of this document Purpose of this document33

The purpose of this document is to fully inform industry, stakeholders and members of the public, of the updated measures in the intervention strategy.

Thisupdatedstrategyhasbeendevelopedfollowingintensiveengagementwith

industryandwiderstakeholders.Inaddition,theEuropeanCommissionhassetout

detailedguidelinesonwhatisrequiredtoobtainStateAidapprovalforGovernment

interventionsinthebroadbandsector.TheDepartmentofCommunications,Energy

andNaturalResources(DCENR)hasfollowedtheseguidelineswhendevelopingthe

interventionstrategy.Thestrategyisalsoinformedbydetailedinputfromexpert

advisorswhowerecommissionedbytheDepartmenttoproducethefollowingreports:

1 BroadbandStrategyforIreland;

2 NBPCostBenefitAnalysis(CBA);

3 StateAidComplianceReport;

4 FinancialAppraisalReport;

5 OwnershipReport;

6 FundingReport;

7 GovernanceReport;

8 TechnicalReport;and

9 NetworkCostModellingReport.

Alltheabovereportshavebeenupdatedtotakeintoaccount,whereappropriate,

submissionsmadebystakeholdersaspartoftheconsultationprocess.

Thereportsarepublishedonwww.broadband.gov.ie.TheFinancialAppraisalReport

andCostModellingReport,arenotpublishedduetothecommerciallysensitivenature

ofthesereportswhichcontaincostmodellingfortheintervention.Itisalsonotour

intentiontopublishthe‘full’CBAReportforthesamereasons.Readers/stakeholders

areencouragedtorefertothepublishedreportsfordetaileddescriptionsoftheissues

consideredandtheexperts’recommendations.Confidentialandcommerciallysensitive

informationhasbeenredactedfromthepublishedreports.

Thekeyelementsofthisstrategywillbereflectedintherequirementsofthe

competitiveprocurementprocess.TheDepartmentwillnotchangethestrategyduring

theprocurementunlessitisabsolutelynecessarytodoso,forexampleforreasonsof

consistencywithStateAidGuidelinesorpublicprocurementrules.

Ireland’sBroadbandInterventionStrategy–UpdatedDecember2015 76 Ireland’sBroadbandInterventionStrategy–UpdatedDecember2015

Background4

4:Background

The NBP sets out the means by which the Government will deliver its commitment to provide high speed broadband to all parts of Ireland.

Achievinguniversalaccesstohighspeedbroadbandisalsoakeytargetunderthe

EUDigitalAgendaforEuropewhichenvisagesthatby2020allEUcitizenswillhave

accesstospeedsof30Mbps,andthat50%ofcitizenswillbesubscribingtospeedsof

100Mbps.

AkeyprincipleoftheNBPistosupportandstimulatecommercialinvestmentthrough

policyandregulatorymeasures.Thiscollaborationwithindustryhasbeeninformed

bytheNextGenerationBroadbandTaskForceinMay2012whereindustryadvised

Governmentonmeasuresthatcouldhelpaccelerateinvestment.

Commercialinvestmentsincethenhasconsiderablyexceededexpectations.In

2012,industrycommittedtoprovidinghighspeedbroadbandto1millionaddresses

inIrelandby2015,withtopspeedsrangingfrom100Mbpsforcableand70Mbps

foreFibreservices.Today,cableisdeliveringspeedsofupto240Mbpstoover

700,000addressesandeFibreservicesofupto100Mbpsareavailabletocirca1.2

millionaddresses.Legislationenactedin2014hasenabledtheuseofESB’snational

distributionsystemtodeliverfibreservices.Thishasresultedinanewwholesale

operatorenteringthemarket,addingincreasedcompetitionforultra-fastservices.Two

companiesarenowinvestinginfibre-to-the-homeservices.Thiscommercialactivity

farexceedswhatwasenvisagedin2012andrepresentsasignificantstep-changein

thequalityofbroadbandconnectivitynowavailabletomanybusinessandresidential

customers.

Theseindustryinvestmentsintheregionof€2.5billionaretransformingthe

broadbandexperienceofmillionsofIrishcitizens.AsecondkeyprincipleoftheNBP

isarecognitionthatindustryinvestmentwillnotextendtoallpartsofIreland.The

GovernmenthasthereforecommittedtoaState-ledinterventionintothoseareas

9Ireland’sBroadbandInterventionStrategy–UpdatedDecember2015

Background4

whereithasbeendemonstratedthatthereisnocertaintythatindustryinvestmentwill

beforthcoming.

TheHighSpeedBroadbandMap2016(publishedinNovember2014),showstheextent

ofindustrycommitmentstoend2016andindicatesthat70%ofaddressesinIreland

willhaveaccesstohighspeedbroadbandwithinthattimescale.Thebalanceof30%,

approximately757,000addresses,representsthetargetfortheStateintervention.

TheDepartmenthasnowrevisedtheinvestmentperiodunderassessmentupwards

inordertoconsiderinvestmentplansthathavebeenannouncedorproposedby

commercialoperatorsfortheperiod2016–2020.Thisprocesshasresultedinthe

developmentoftheHighSpeedBroadbandMap2020whichisbeingpublishedalong

withthisdocument.

Deliveringhighspeedbroadbandtotheseareaspresentsasignificantchallenge.With

only67peopleperkm2,IrelandhasoneofthelowestpopulationdensitiesinEurope.

SomecountiesinIrelandhaveapopulationdensityaslowas19peopleperkm2. This

lowpopulationdensity,coupledwithathinlydistributedruralpopulationmakesthe

deploymentofhighspeedbroadbandnetworkinfrastructurechallengingandcostly.

Thisdocument,togetherwiththeassociatedexpertreports,setoutindetailhow

Governmentwillintervenetoensurehighspeedservicesareprovidedtotheseareas.

5:Vision-Highspeed broadband

forall


Vision – High speed broadband for all Vision – High speed broadband for all55

Seamless access to technology and the internet is a necessity for any modern economy or society.

TheGovernmentrecognisesthatqualityhighspeedbroadbandisessentialfortoday’s

economyandsocietyinthistransformationaldigitalage.Theprovisionofhighspeed

broadbandenablescitizens,businessesandinstitutionstoaccessinformation,

servicesandopportunitiesthatwouldotherwisebeoutofreach.TheNBPreflects

Governmentobjectivestodelivernewopportunitiesforjobs,growthandsocial

inclusion.Furthermore,itaimstounderpinandsupportwiderpublicpolicyobjectives

andinitiativesbothnationallyandwithintheEuropeancontext.

ThisinterventionstrategysupportsthevisionoftheNBPandtheStateledintervention

undertheNBP–toconnectallourcommunitiesbydealingdefinitivelywiththe

broadbandconnectivitychallengeinruralareas.Thiswillbeachievedbydeliveringhigh

speedbroadbandtoallpremisesthatwillnotbeabletoaccesssuchservicesthrough

commercialinvestmentalone.

This vision is informed by the fact that in Ireland, the digital economy:

• represents5%ofGDPandisanticipatedtobesome10%ofGDPby2020

• employsalmost100,000peopledirectlyandindirectly

Traditionalindustriessuchasfarmingandretailareincreasinglyrelyingontechnology

tocompetenationallyandglobally.

Broadbandisalsoessentialtothedeliveryofinternationallytradedservices.The

EconomicandSocialResearchInstitute(ESRI)predictsthatover70%ofIrishexports

willbetradedservicesby20251.Qualitybroadbandallowsenterprisesandworkers

moreflexibilityintermsofworkingpatterns.Theefficientdeliveryofpublicservices

includingeducation,healthcareandcentralandlocalgovernmentservicesis

increasinglyreliantondigitalplatforms.Inaddition,socialandleisureactivitiesarealso

progressivelymoredependentonInformation&CommunciationsTechnology(ICT).

TheGovernment’sambitionisthat100%ofpremiseswillhaveaccesstohighspeed

broadbandandbidderswillbeaskedtoachievethisatthelowestcosttotheState.

TheinterventionaimstoensurethattherewillbenoneedforanyfurtherState

interventionintheprovisionofhighspeedbroadbandinIreland.

Deliveringonthisvision,willmakeIrelandaleaderintheprovisionofubiquitous

highspeedbroadband.Thisinturnwillopenupopportunitieslocally,nationally

andinternationally.TheimplicationsforIrelandoftheinterventionarelikelytobe

wideranging.Thesewillincludepositiveimpactsonjobcreation,improvedbusiness

productivity,fasterdeploymentandtake-upofnewservicesandincreasedcompetition

intheprovisionofhighspeedbroadbandservices.

1 Fitzgerald J. et al, ESRI, Medium Term Review, 2008-2016, 2008.

Ireland’sBroadbandInterventionStrategy–UpdatedDecember2015Ireland’sBroadbandInterventionStrategy–UpdatedDecember2015 1312

6:Objectives

Building on the vision for a digitally enabled economy, the State led intervention under the NBP has the following key objectives:

1 Delivertheinterventionasquicklyaspossibletoensureanationalhighspeed

broadbandnetworkforIreland.

2 Everyhomeandbusinesstohaveaccesstohighspeedbroadbandwithachoice

ofserviceproviders.

3 Ensurethatthenetworkcanmeetcurrentandfuturedemand.

4 Maximisere-useofexistinginfrastructure.

5 Incentiviseadditionalcommercialinvestment.

6 Stimulategrowthandretentioninjobswhileenablinge-farming,e-health,trading

online,e-education,tourism,savingsforconsumersetc.

Theseobjectivesmeanthathighqualityandreliablebroadbandserviceswillbe

provided,valueformoneywillbeachievedandGovernmentpolicyoneconomic

recoveryandjobswillbesupported.

Ireland’sBroadbandInterventionStrategy–UpdatedDecember2015

Objectives6

15

7:Whowillbenefit?

Through ongoing commercial investment, most of our cities and towns will benefit from commercially available high speed broadband over the coming years. The areas that are not covered by commercial investment are the target for the State funded investment.

Theambitionofthestrategyistoachieve100%accesstohighspeedbroadbandinthe

interventionareabytheendof2020.Theprofileoftheareatobeaddressedbythe

interventionstrategyorpotentialcommercialinvestmentsover2016-2020includes:

• 96%ofnationallandmass

• 100,000kmofroadnetwork

• Over757,000postaladdresses

• 1.8millioncitizens(38%ofnationalpopulation)

• 688,000membersofactivelabourforce(38%ofnationaltotal)

• 214,000whitecollaremployees(34%ofnationaltotal)

• 89%offarmemployment(139,000farmersnationally)

• 80,266farms(94%ofnationaltotaloffarms)

• 63,440non-farmbusinesses(B&Bs,shops,doctors,etc.)

• 62,226SMEs,primarilymicro

• 1,522schools(40%oftotal)

• 601businessparks(7%ofnationaltotal)


Who will benefit?7

17

Who will benefit? Who will benefit?

Ireland’sBroadbandInterventionStrategy–UpdatedDecember2015Ireland’sBroadbandInterventionStrategy–UpdatedDecember2015

7

AdetailedCBAhasbeencarriedouttoassessthereturnoverthelifetimeoftheState

intervention.TheCBAdemonstratesthatthebenefitsofthisinterventionoutweighthe

costsandthattherewillbeapositivebenefitacrossallareasofIrishsociety.

BeneficiAry PotentiAl Benefits

General Public • Savingsfromremoteworking

• Reducedcostsofcommunicationsbundlese.g.mobile,internet,television,landline

• Timesavingsforonlinetransactions

• Monetarysavingfrom‘shoppingaround’online

Business located outside the intervention area whose employees live and commute from the intervention area

• Increasedproductivityfromemployeeslivingintheinterventionareaastheywouldhavean‘alwayson’capability

• Gainsfromworkingfromhome

Farming Community • AdvancedICTintegrationinfarming

• Timesavingsfromremotemonitoringoflivestock

SMEs • Accesstointernationalmarkets

• Timesavingsfromonlineservicesleadingtoincreasedproductivity

eHealth • Remotemonitoringofelderlypeopleintheirhomes

• Enhancedhome-basedcareasanalternativetohospitalisation

7

BeneficiAry PotentiAl Benefits

Jobs and Entrepreneurship • Jobcreation

• Improvefinancialperformanceofexistingbusinesses

• Enablingtheformationofnewenterprisesintheinterventionareawhichwouldpreviouslyhavebeenrestrictedbyalackofaccesstoreliablehigh speed broadband

• Enhancedcompetitivenessintheattractionofforeigninvestment

Education • Availabilityofonlineeducationaltoolswhichcomplementclassroomlearning

• Easieraccesstospecialistteachingresourcese.g.appliedmathsthroughonlinetutorialsorwebcasts

• Enablingonlinestudentforaandprojectteams

• EarlyengagementwithtechnologyleadingtolongertermbenefitsfromITliteracy

Environmental and

Social Benefits

• Promotionofsocialinclusionthroughequalaccesstoonlineservices

• Reductionsintravelneeds,therebyreducingfossilfuelconsumption

• Opportunityformorebalancedregionaldevelopment

• Enablingenergyefficiencythroughsmarttechnologiesinthehome,includingsmartmeters.

Aconservativeapproachwasadoptedintheprofilingofthesebenefits.The

interventionhasfurtherpotentialtosupportabroadrangeofotherpublicpolicy

priorities,includingintheareasofsocialinclusion,tourismandpublicsectorreform.

1918

8.1 THE InTErVEnTIOn ArEA

Inordertoestablishtheextentoftheinterventionareaandtoensurethatpublic

fundsarenotspentwherecommercialinvestmentisforthcoming,adetailedmapping

exerciseofcurrentandplannedhighspeedbroadbanddeploymenthasbeen

carriedout.Thishasinvolvedpublicconsultation,engagementwithindustryandan

assessmentofnotifiedcommercialinvestmentplans.

TheHighSpeedBroadbandMap2020showswherehighspeedbroadbandservices

areorwillbeprovidedcommerciallyoverthenext5years.Italsoestablisheswhere

commercialoperatorshaveconcreteplanstoroll-outnewhighspeedbroadband

coverage.UnderEUStateAidGuidelines,theGovernmentcanonlyinterveneinthe

marketwherethereislikelytobemarketfailure.

TheHighSpeedBroadbandMap2020aspublishedprovidesameasureofcertainty

topotentialbidder(s)astotheinterventionareaforprocurement.TheDepartment

doesnotproposetochangetheinterventionareaduringtheprocurementunlessit

isabsolutelynecessarytodoso,forexampleforreasonsofconsistencywithStateAid

Guidelinesorpublicprocurementrules.

8.2 HIGH SPEED BrOADBAnD – DEFInITIOn OF SErVICES

Toensurethatcitizensandbusinesseshaveaccesstoreliable,futureproofedservices,

theinterventionstrategyrequiresthebuild-outofawholesale,openaccessnetwork

capableofmeetingdefinedminimumstandardsandisfutureproofed.

8:Keyelementsoftheupdatedstrategy

Ireland’sBroadbandInterventionStrategy–UpdatedDecember2015 21

Key elements of the updated strategy 8

Key elements of the updated strategy8



TheDepartmentrequiresthefollowingtechnicalstandardstobemetbythewinning

bidder(s)intheprocurementprocess:

• Aminimumof30Mbpsdownload

• Aminimumof6Mbpsuploadortwicethemaximumuploadspeedofexisting

broadbandintheinterventionarea,whicheverisgreater

• Latency(one-way)–nomorethan25milliseconds

• Jitter–nomorethan25milliseconds

• Packetloss–notmorethan0.1%

• Serviceavailability–atleast99.95%ofthetime

Inadditiontothesetechnicalstandards,thewinningbidder(s)mustensurethe

availabilityofarangeofhighqualitywholesaleservicestoallowretailcompetitionto

develop.

Theinterventionstrategyalsorequiresmeasurestomeetthespecificneedsof

businessaswellasensuringscalabilityintermsoffutureanticipatedgrowthindemand

forbandwidth.

Accordinglybidder(s)willbeinvitedtoputforward:

1 Minimumspeedsforbusinesses,whichcanbebuiltintotheservicestandardsof

thewinningbidder(s)contract.

2 Proposalstoensurethatthenetworkisfutureproofedtomeetgrowing

bandwidthdemand.Thisisconsideredtheoptimalapproach.Attheoutsetthe

Departmentwillnotprescribefuturespeedswhichmaynotreflectfuturemarket

developmentsandtechnologyevolution.Thewinningbidder(s)networkwillbe

subjecttoperiodicreviewsona3-5yearbasistoensurethatitiskeepingpace

withdemand.

Formoreinformationonservicespecifications,pleaseseeSections4and5ofthe

updatedTechnicalReport.

8.3 CHArACTErISTICS OF THE nETWOrK

A wholesale, open access infrastructure

Giventhecommercialchallengesofinvestingintheinterventionarea,theDepartment

believesthateachareawillbeservedbyonehighspeednetworkonly,ratherthan

themultiplenetworkstructurethatexistsinsomecommercialareas.Deliveryof

thenetwork(ornetworksifmorethanonesuccessfulbidderemerges)willrequire

Governmentsubvention.Giventhecompetitiveconstraintsofanon-commercialarea,

thechallengeistodesignaninterventionmodelthatcanensurethatconsumershave

achoiceofretailserviceproviderandcanavailofaffordableandcompetitivehigh

speedbroadbandservices.

Accordinglyitisproposedthattheinterventionwillfundthebuildingofawholesale,open

accessnetwork.AsdescribedinSection8.9,itisproposedthatthenetworkwillberolled

outtobeascloseaspossibletoenduserstoensureallpremisescanbeconnected.

Thisopenaccessnaturewillallowanyretailcompanytoaccessthenetworkontransparent

andequaltermsandconditions.Inthisway,thestrategyaimstopromotestrong

23

Key elements of the updated strategy

24 Ireland’sBroadbandInterventionStrategy–UpdatedDecember2015Ireland’sBroadbandInterventionStrategy–UpdatedDecember2015


competitionatretaillevel,recognisingthatonlyonewholesalephysicalinfrastructureis

likelytobeviableoverthelongterminanygeographicarea.

Intheunlikelyeventofsomeusersnotbeingabletoobtaintheminimumretailservicethey

require,DCENRcanrequirethewinningbidder(s)toprovideanaffordableretailpackageof

servicestothoseusers,whichshouldbecomparabletopriceschargedinareasoutsidethe

intervention area.

Providing backhaul and access connectivity

Fortechnicalandcommercialreasonsdiscussedingreaterdetailintheexpertreports,

thenetworkmustbeascloseaspossibletoeachpremisesoastoensureavailability

ofahighspeedconnectiononcetheendusermakesanorderforretailservices.

Giventhehighlydispersednatureofruralhousingdevelopment,deliveringabackhaul

onlynetworkisunlikelytoensurethatallpremisescanavailofservicesinatimelyor

affordablemanner.

Inordertofacilitateacompetitivemarketwhereretailerscanprovideservicestoall

premisesintheinterventionarea,thewholesalenetworktobebuiltwillhavetoinclude

provisionstodeliverbackhaulandaccesstopremises.

8.4 Who Will oWn the netWork?

TheGovernmenthasconsideredarangeofoptionsfortheownershipofthenetwork.

FiveownershipoptionswerepresentedintheproposedstrategypublishedinJuly.

Theoptionsrangedfromacommercialstimulusmodel,inwhichalimitedamountof

Governmentfundingisusedtostimulatecommercialinvestmentintheintervention

area,toafullyownedpublicutility,fundedentirelybytheExchequer.

8

The five options were:

1 Acommercialstimulusmodelwherepublicfundsaremadeavailabletomake

privateinvestmentcommerciallyviable.

2 Aconcessiontypearrangementwhereacommercialcompanydesigns,builds

andownsthenetworkforthedurationofthecontractbuttheassetrevertsto

theStateattheendofcontract.

3 Ajointventure/equitysharearrangementwiththewinningbidder(s).

4 Aconcessiontypearrangementsimilartooption2exceptthatownershipofthe

assetresideswiththeStatefromtheoutset.

5 Publicownershipwhereanewutilitytypecompanyissetuptodesign,buildand

managethebroadbandnetworkrequiredfortheinterventionarea.

Asaresultoftheconsultationprocess,furtherappraisalfrombothafinancialandnon-

financialperspective,theoptionshavenowbeenreducedtotwo,namelyacommercial

stimulusmodelandaconcessiontypearrangement.

ThesetwooptionsarestillunderconsiderationbyGovernment.Adecisionwillbe

madeontheoptimalownershipmodelfortheStateinearly2016,priortotheissuing

oftheformaltenderdocuments.Thetwomodelswillbeassessedagainsttheshort,

mediumandlongtermobjectivesoftheNBPsoastoensurethebesteconomicand

socialreturnonanyStateinvestmentmade.

PotentialbidderswhohaveexpressedaninterestinbiddingduringthePre-

QualificationQuestionnaire(PQQ)processwillbenotifiedofthepreferredownership

modelpriortotheinitiationofthecompetitivedialogueprocess.

25

Key elements of the updated strategy8 Key elements of the updated strategy


Forfurtherdetailontheconsiderationandrecommendationsinrelationtoownership

options,pleaserefertotheupdatedOwnershipreport.

8.5 hoW the netWork Build Will Be funded?

Theestimatedleveloffundingrequiredhasbeeninformedbydetailednetwork

modelling,financialanalysisandengagementwithindustry.

Theexactamountoffundingwillultimatelybedeterminedbythecompetitive

procurementprocess.Bidderswillbeexpectedtomeetthestandardssetoutinthis

updatedstrategy.

Variousoptionshavebeenexploredintermsofthesourceoffundingtothe

commercialsectorandtheStateincludingcommercialmarketlenders,theEuropean

InvestmentBank(EIB),IrelandStrategicInvestmentFund(ISIF)andtheEuropeanFund

forStrategicInvestment(EFSI).Alloftheseorganisationshaveexpressedaninterestin

fundinganycommercialaspectoftheinvestment.

TheGovernmentcontributiontowardsthecostofdeliveringthisprojectmaybe

achievedthroughacombinationofexchequer,EIBandEFSIsourceswith€75million

alsocommittedundertheEuropeanRegionalDevelopmentFund(ERDF).

Aninitialstimuluspackageof€275millionfortheNBPhasbeenearmarkedby

GovernmentaspartofitsfiveyearCapitalPlan2.Thisprovidestheinitialstimulusfor

theearlyyearsoftheStateinterventionundertheNBP.Itmaybepossibletospread

thetotalcostofthepublicly-fundedelementoftheinterventionoverthelifetimeofthe

contract(25years)withsomefront-loadingduringtheconstructionphase.Mechanisms

willbeputinplacetoprovideforcontractcomplianceandtoensurevalueformoney

(seeSection8.7below).

2 http://www.per.gov.ie/en/capital-investment-plan-2016-2021/

8

Havingregardtotheimportanceofacompetitiveprocurementprocess,itisnotthe

intentiontoindicatetheoverallestimatedExchequerfundingparametersatthisstage.

8.6 PrOCurEMEnT

Theinterventionstrategyhasbeenupdatedtoprovideclarityaheadoftheformal

publicprocurementwhichwillcommenceinDecember2015.Itisanticipatedthatthe

contracttodelivertheStateinterventionwillbeclassifiedasaservicesconcessionand

willbeawardedbywayofprocurementfollowingthecompetitivedialogueprocess.

Therearefivestagestothiscompetitivedialogueprocess:

1 PPQandProjectInformationMemorandum(PIM).

2 Invitationtoparticipateindialogue(ITPD).

3 Submissionofdetailedsolutions(Departmentreservestherighttoincorporatea

refinedsolutionstage).

4 Invitationtosubmitafinaltender.

5 Selectionofpreferredbidder(s)/contractaward3.

FollowingtheGovernmentdecisionontheoptimalownershipmodeloutlinedin

Section8.4,therewillbeasingletenderprocesswiththreelots;Lot1,Northern

InterventionArea,Lot2SouthernInterventionAreaandaCombinedLot.AnyBidder

wishingtobidfortheCombinedLotmustalsotenderindividuallyforLot1andfor

Lot2.AtenderfortheCombinedLotwillnotbeconsideredtobeacomplianttender

unlessthatBidderhasalsosubmittedacomplianttenderforLot1andforLot2.

3 It will be stipulated to bidders that any contract award will be conditional on receiving State Aid approval for the intervention.

2726

Key elements of the updated strategy Key elements of the updated strategy


8

4 EU Guidelines for the application of State Aid rules in relation to the rapid deployment of broadband networks (2013/C25/01)

5 National Regulatory Authority

AmapoftheprocurementlotsisavailableatAppendixII.Thisapproachisaimedat

maximisingcompetitionintheprocurementandallowingsmalleroperatorstobid

whilepotentiallyrealisingsavingsfortheExchequer.

Asthecostsassociatedwithdeployinginfrastructurecanbeextremelyhigh,there

useofexistinginfrastructureintheinterventionareashouldminimisethecosttothe

State.Allbidderswillberequiredtocomplywithrelevantlawsandregulationsrelating

toaccesstoexistinginfrastructurethattheyownorcontrolintheinterventionarea.

TheDepartmentwillalsoexpectrelevantexistinginfrastructuretobesharedwhere

reasonablerequestsforaccessaremadethatarecriticaltotherequester’sbid.Itwill

beimportantthatsuchinformationismadeavailableassoonaspossibletoensure

noonebidderhasanunfairadvantageintheprocurementprocess.Thisisalsoa

requirementundertheEUStateAidGuidelines4whichstate:

‘Since the reusability of existing infrastructure is one of the main determinants for the cost

of broadband roll-out, Member States should encourage bidders to have recourse to any

available existing infrastructure so as to avoid unnecessary and wasteful duplication of

resources and to reduce the amount of public funding. Any operator which owns or controls

infrastructure (irrespective of whether it is actually used) in the target area and which

wishes to participate in the tender, should fulfil the following conditions: (i) to inform the aid

granting authority and the NRA5 about that infrastructure during the public consultation;

(ii) to provide all relevant information to other bidders at a point in time which would allow

the latter to include such infrastructure in their bid. Member States should setup a national

database on the availability of existing infrastructures that could be reused for broadband

roll-out.’

8

Theprocurementwillbefora25yearcontractwiththefirstfiveyearsrelatingtobuild-

outandembeddingservicedelivery.Measurestoensureongoingserviceprovision

beyondthelifetimeofthecontractwillbeconsidered.Thecontinuousevolutionof

theregulatoryregimeshouldensurethatcontractconditionswhicharecriticaltothe

competitivefunctioningofthemarketcanbecontinuedthroughrobustregulation.

8.7 EnSurInG THAT THE nETWOrK DElIVErS

Theambitionoftheproposedinterventionistodealconclusivelywithoutstanding

highspeedconnectivityissuesinareaswherethereisnocertaintythatthecommercial

sectorwillinvest.ThePublicSpendingCodeobligespublicsectorbodiestoensurethat

contractsaremanagedanddeliveredtothespecifiedstandard,withinbudgetandon

time.Regardlessoftheownershipmodel,robustgovernancearrangementswillbe

requiredinordertoensurethattheserviceisdeliveredandevolvestocontinuously

meetconsumerdemandoverthedurationofthecontract,andbeyond.

Thegovernanceofanycontract(s)willinclude:

• Build-outmilestoneswithclaw-backmechanismsfortheStateforefficiencies/

savingsoverandabovethoseidentifiedinanybid

• LinkingKeyPerformanceIndicators(KPIs)withservicecreditstocompensatethe

contractingauthorityforunderperformance

• Alignmentwithrelevantregulatorymechanismssuchaswholesaleproducts,

pricing,non-discrimination-etc.(seeSection8.2)

• Afinancialclaw-backmechanismfortheStateforcommercialprofitsoverand

abovethoseenvisagedinthewinningtender

29



8

• Afinancialclaw-backmechanismforanysavingsthatareachieved,particularly

duringtheconstructionphaseoftheproject

• Terminationandstep-inclausesintheeventofpersistentsub-standard

performanceorissuesofinsolvencythatmayarise

Toensurealignmentwithbestpracticeregulation,thegovernancearrangementswill

includemeasurestoalignwithexistingregulatoryrulesforthesector.

Measurestoensurethatservicescontinue,post-contract,willbeaconsiderationin

contractnegotiationswiththepreferredbidder(s)whereownershipisnotretainedby

the State.

Asthecontractingauthority,DCENRwilllead,manage,enforceandberesponsiblefor

theoverallmanagementofthecontract,includingcontractgovernance.

8.8 KEy FEATurES OF THE WHOlESAlE nETWOrK

What services can retail service providers expect from the wholesale company?

Theinterventionstrategyenvisagesmultipleretailerspurchasingservicesfromthe

wholesalenetworkcompanyandofferingarangeofhighspeedservicestoconsumers.

Allretailserviceproviderswillhaveopenaccesstothewholesalenetworktomaximise

retailcompetition.Thetermsandconditionsofthisaccess,includingwholesaleprices,

willbemonitoredthroughthecontract.Alistoftherequiredwholesaleproductswhich

thewholesaleoperatorwouldhavetoprovidefromtheoutsetisspecifiedinSection5

oftheupdatedTechnicalReport.

8

Retailerswillnotbepermittedtousethenetworktoofferbroadbandproductsto

consumersthatfallbelowtheminimumbroadbandserviceoutlinedaboveuntil

deploymentofthenetworkiscompletedanda30Mbpsserviceisavailabletoall.

Thistostimulatedemandforhighspeedbroadbandservicesfromthestartthereby

reducingupfrontandoperationalcostsoverthelifetimeoftheintervention.Itis

expectedthatthiswillreducetheleveloffundingrequiredfromtheState.Overtime,

thisconditionwillpotentiallybecomelessrelevantastheavailabilityofhighspeed

broadbandimproves.Thisconditionwillberemovedonceallconsumershaveaccess

totheminimumhighspeedbroadbandspecification.

What other services can the wholesale network support?

Telecommunicationinfrastructuresarecapableofdeliveringawidevarietyofconsumer

servicesandarenotlimitedtoprovidingbroadbandonlyservices.Thenetworkshould

beutilisedasmuchaspossibleinordertomaximisevalueformoneyandreduce

thecosttotheState.Therefore,thewholesaleoperatorwillbepermittedtoprovide

otherwholesaleservicessuchasvoice,multicast(TV),machinetomachine,leased

lineservices,aslongasthisisprovidedonanopenandequalbasis,subjecttosuch

servicesnotrunningcontrarytotheNBPobjectivesorgivingrisetoaneedformore

funding.

how can retailers be assured of equal access to the network?

Acrosstheworld,manytelecomscompaniesoperateatbothawholesaleandretail

level.Whereacompanyhassignificantmarketpower,regulatorsimposemeasuresto

reducetheriskofthewholesalecompanyfavouringitsretailarm.

Asthewholesalenetworkornetworksintheinterventionareaarelikelytooperate

asamonopolythecontractwiththewinningbidder(s)willthereforeincludestringent

31




8

conditionstoensureequalaccessbyalloperators.Theseconditionsinclude:

• Accountingseparationbetweenthewholesaleandretailarmsofanywinning

bidder(s)

• Marketingandbrandingforthecompanythatbuildsoutthenetworkmustbe

distinctandseparatefromitsexistingretailbranding

• Retailerswillhaveequalaccesstothenetwork,definedinregulatorytermsas

“equivalenceofinputs”

• Asuiteofcontractualundertakingswiththewinningbidder(s)coveringequality

ofpricing,equivalenceofinputs,operationalkeyperformanceindicators,

performanceincentivesforwholesaleonlyoperations,servicecreditdeductions

fornon-performance

WheretheGovernmentisnotsatisfiedthattherearesufficientsafeguardsaround

transparencyandgovernancegenerally,theestablishmentofaseparatelimited

companymayberequired.Anysuchrequirementwillbenotifiedtobiddersaspartof

thecompetitivedialogueprocess.

Inadditiontothesesafeguards,theupdatedinterventionstrategysetsoutmeasures

toensurethatsmallerretailcompanieswillhaveaccesstothenetworkonfairand

non-discriminatoryterms.Forexample,smallcompaniesshouldnotbeunfairly

disadvantagedduetotheirsizeandscalecomparedtolargercompanies.Tothisend:

• Thewinningbidder(s)willberequiredtodemonstratethatallretailoperatorscan

interactwiththecompany,regardlessofsize;and

8

• Thewinningbidder(s)willberequiredtopublishalistofretailerswhohavebeen

grantedaccesstotheservice

retail and wholesale services must be affordable

Oneofthekeyprinciplesoftheupdatedstrategyisthattheservicestobedeliveredmust

beofsimilarspeedandqualitytothoseavailableinurbanareasandtowns.Also,prices

includingconnectioncostsforexistingpremises,mustbealignedwithnationalpricesfor

suchservices.

Wherepossible,pricesarecappedtothelevelsofthemostcomparableregulatedprices

outsideoftheinterventionarea.Wheredirectcomparisonsdonotexist,theclosestrelated

regulatedpriceshouldbeusedwithadjustmentsforrelevantcostdifferences.

FurtherdetailsonwholesaleaccessproductsarecontainedinSection5oftheupdated

TechnicalReportanddetailsonpricingarecontainedinSection8oftheupdated

BroadbandStrategyforIrelandReport.

8.9 TIME FrAMES FOr THE rOllOuT OF THE nETWOrK

Despiterepresentingonly30%ofaddressesinIreland,theinterventionareacurrently

covers96%ofthelandareaofthecountry,andcoverstheequivalentof100,000km

ofroad.Ensuringaccesstohighspeedfutureproofedbroadbandservicesinsuchan

areathereforerepresentsasignificantlogisticalandfinancialchallenge.

Notwithstandingthis,intensiveengagementwithindustrystakeholdershasindicated

thatthenetworkcouldberolledoutwithin3–5yearsofthecontractawardtoa

winningbidder(s).

33


TheGovernmentisdeterminedtoensurethatthenetworkisbuiltoutasquicklyas

possibleandatminimumcosttomeettheEUDigitalAgendaTargetofdeliveringa

ubiquitousminimum30Mbpsserviceby2020.

Inthiscontext,theinterventionstrategysetsoutthefollowingtargetsforbuild-outin

theinterventionarea:

• 60%ofaddressespassedby20186;and

• All addresses passed by 2020

Itisanticipatedthatthephysicalbuildofthenetworkwillcommencein2016,oncea

contractwithbidder(s)isinplace.

Theprospectivebidder(s)areexpertsinnetworkroll-outandofferdifferentnetwork

architecturesandtechnologiestodeliverthenetwork.Industryisbestplacedto

determinethesequencingofthenetworkdeploymenttomaximiseefficienciesduring

networkbuild.TheDepartmentwillengagewiththewinningbidder(s)ontheoptimum

rolloutstrategy,havingregardtoprioritybusinessandconsumerneeds,including

areasofparticularlypoorservice,andareasofstrongdemand.TheDepartmentalso

reservestherighttorequirecertainareastobeaddressedasapriority.Thiswillbe

discussedaspartofthecompetitivedialogueprocess.Thesefactorswillneedtobe

balancedagainstthemostefficientnetworkrolloutandthetechnologybeingdeployed.

8.10 TIME FrAMES FOr COnnECTInG PrEMISES

Inordertomeetconsumerdemandandexpectations,theinterventionstrategywillimpose

connectiontimeframesonthebidder(s)thatdeliverthewholesaleopenaccessnetwork.

8

6 Combined with existing commercial investment, this will result in 85% of premises nationally being covered by 2018

8

Thetargetserviceconnectiontimeswillbesetoutaspartoftheprocurement

requirements.Thesetargetswillspecify:

• ashortconnectiontimeiftheserviceispre-orderedsufficientlyinadvanceofthe

rolloutsothatitcanbedeliveredduringthedeployment;and

• industrystandardconnectiontimesforpremisesforwhomordersareplaced

afterthedeploymentiscompleted

Whilethesewillbethetargettimeframes,bidder(s)willbeinvitedtoproposemore

demandingconnectiontimesintheirbids.

Aspartofthegovernancearrangementsthatwillbeputinplace,servicecreditswillbe

imposedonthewholesaleoperatorwherethesetargetsaremissed.

Furtherdetailsonconnectiontimeframesandservicedeliveryarecontainedinthe

expertreports.

8.11 COnnECTInG COnSuMErS - ExISTInG AnD nEW PrEMISES

Akeyprincipalforconnectingconsumersisthatpricesareaffordable.TheDepartment

willadoptthefollowingapproachinrelationtoconsumerconnections:

• Ideally,asmanypremisesaspossiblewillbeconnectedduringthedeployment

stage.Thiswillserveadualpurposeofloweringconnectioncostsandstimulating

demandforservices

• Aspartoftheprocurementprocess,bidderswillbeaskedtooutlinetheir

connectioncoststopremises.Thesemayvarydependingonwhetheracustomer

isconnectingduringorafterdeploymentandcouldbesubjecttodiscountsfor


Key elements of the updated strategy Key elements of the updated strategy8

earlysignup.Typicallyhowevercommercialoperatorsbuildconnectioncostsinto

theirmonthlyretailofferingsaspartofcustomercontracts

• Bidderswillberequiredtosetoutastandardwholesaleconnectioncostfor

existingpremisesintheirbids.Theirrequiredsubsidyamountshouldincorporate

thedifferencebetweentheactualandstandardconnectioncostsrecognising

thatsomeconnectioncostswillbehigherthanthestandard.Consumersin

existingpremiseswillpaynomorethanthestandardconnectionchargesetout

inthebidofthesuccessfulbidder(s)regardlessoftheactualcostofconnection

• Newpremiseswillbebuiltintheinterventionareaoverthelifetimeofthe

proposedcontract.Bidderswillbeaskedtocommittoprovidinghighspeed

broadbandservices,onrequest,toallpremises(newandexisting).Inexceptional

circumstancesthesuccessfulbidder(s)willbeallowedtochargeanexcess

connectionchargefornewpremisesbuiltpost-networkrollout,dependingon

howfarthepremisesarefromthenearestconnectionpoint.Thisisthepractice

usedintheprovisionofotherutilityservices.Bidderswillberequiredtoprovidea

processandpricingregimeforconnectingnewpremises

8.12 AVAIlABlITIy OF SErVICE

Akeyprincipleoftheupdatedstrategyisthatthenetworkmustpassallresidentialand

businesspremisesintheinterventionarea,andtoconnectpremisesonrequestduring

deployment.Passingapremisesmeansthatthenetworkisbuiltascloseaspossibleto

premisessothatthefinalconnectiontothepremisesisasshortaspossibletomeet

minimalservicedeliverytimes.

8

Ensuringstrongdemandforservicesisthereforeproposedasanimportantprinciple

underpinningthisupdatedinterventionstrategy.

Bidder(s)willberequiredto:

• showhowtheyintendtoencourageearlytake-upandcommittosuchmeasures

intheircontract(s);and

• outlinehowtheyproposetoengagewithcommunities(bothlocalandbusiness)

onthebenefitsofthenetworkanditsavailabilityintheirarea

8.13 DEMAnD MEASurES

Customersintheinterventionareastandtorealiseverysignificanteconomicbenefits

fromtheavailabilityofhighspeedbroadband7.Thestrongerthedemandforservices,

thelowerthelikelycostoftheinterventiontotheStatewhichultimatelydeliversbetter

valueformoneytotheExchequer.

7 Pwc – Broadband Strategy for Ireland, Section 12


Appendix IHigh Speed Broadband Map 2020

9:AppendixI–High Speed Broadband

Map2020

9

Thismapcanbeaccessedthroughwww.broadband.gov.ie.YoucanuseyourEircode,

addressortownlandtofindoutinformationrelatingtoyourpremisesandbroadband

coverage.YoucanlookupanaddresstofinditsEircodewiththeEircodeFindertool

whichisavailableonourwebsite.


1

10:AppendixII–Mapof

ProcurementLots

Appendix IIMap of Procurement Lots 10

Themapbelowshowsthelotsforprocurement.

41Ireland’sBroadbandInterventionStrategy–UpdatedDecember2015

Glossary of terms11

11: Glossaryofterms

Access network Theelementofinfrastructurethatconnectsindividualpremisesorgroupsofpremisestothenetwork

Address(es) Anaddressisadeliverypoint,i.e.apostaladdressusedtoenablethedeliveryofmailbyAnPost

Backhaul Inahierarchicaltelecommunicationsnetworkthebackhaulportionofthenetworkcomprisestheintermediatelinksbetweenthecorenetworkandtheaccessnetworkthatconnectstoenduserpremises

CBA CostBenefitAnalysis

DCEnr TheDepartmentofCommunications,EnergyandNaturalResources

EC EuropeanCommission

EIB EuropeanInvestmentBank

ErDF EuropeanRegionalDevelopmentFund

ESrI EconomicandSocialResearchInstitute

FTTH Fibretothehome



1 Glossary of terms11

FTTP Fibretothepremises.Describesanetworkarchitecturewhereopticalfibreisusedtodeliverconnectivityrightuptotheenduserpremises

FWA Fixedwirelessaccess.Describesatypeofnetworkarchitecturewherethefinalconnectiontotheenduserpremiseismadewitharadiolink

ICT Information&CommunicationsTechnology

Intervention area TheareasofthecountrywhichwillrequireStateinterventiontobringaboutthedeploymentofhighspeedbroadbandservices

ISIF IrelandStrategicInvestmentFund

Jitter Thevariationinthetime,generallymeasuredinmilliseconds(ms),betweenpacketsarrivingatadestination,whichcanbecausedbynetworkcongestion,timingdrift,orroutechanges.Lowjitterisdesirableforreal-timeservicesincludingvoice,videoandonlinegaming

KPI Keyperformanceindicators.Asetofquantifiablemeasuresusedtomeasureorcompareperformance

latency Thetimeittakes,generallymeasuredinmilliseconds(ms),forasourcetosendapacketofdatatoareceiver.Thekeycausesoflatencytendtobepropagationdelay,serialisation,dataprotocols,routingandswitching,andqueuingandbuffering.Lowlatencyisdesirableforreal-timeservicesincludingvoice,videoandonlinegaming

Mbps Megabitspersecond

Glossary of terms11

nBP NationalBroadbandPlan

nDFA NationalDevelopmentFinanceAgency

nGA NextGenerationAccess

Open access network Anetworkthatallowsthirdpartiestomakeuseoftheinfrastructureowner’snetworkassets

Passive Referstonetworkelementswithoutanactiveelectroniccomponent.Typicallycomprisescivilengineeringinfrastructure,ducts,darkfibreandstreetcabinets

PIM ProjectInformationMemorandum

PoH Pointsofhandover.Anetworkelementwhereanothernetworkcaninterconnectforthepurposesof‘handingover’networktrafficfromonenetworktoanother

PoP Pointsofpresence.Thepointofinterconnectionbetweentheaccessandcorenetworks

PIP Physicalinfrastructureprovider

PQQ Pre-QualificationQuestionnaire

45


Glossary of terms11

QoS QualityofService.Asetofstandardsandmechanismsforensuringagivenqualityofperformanceofservicesprovidedoverthenetwork

rSP Retailserviceproviders.Firmsthatsellretailproductstoendusers.Theydonotnecessarilyhavetheirownnetworkinfrastructure

SAG StateAidGuidelines.TheEuropeanCommission’sdocumentsettingoutguidanceontheapplicationofStateAidrulesfortherapiddeploymentofbroadbandnetworks

SMEs Smallandmediumsizedenterprises

WnP Wholesalenetworkprovider


Notes

Notes


National Broadband Plan

Documents

Transcript of National Broadband Plan