I am pleased to have the opportunity to present the ESB (Electronic Communications Networks) Bill 2013 for the consideration of the House. The Bill is a relatively short legislative proposal, the purpose of which is to provide an explicit legal basis to enable the ESB to engage, now or in the future, in the installation or operation of electronic communications networks and services, either alone or by agreement with one or more other companies, and to provide for consequential matters.
The Bill also makes the necessary statutory provision to change the name of Bord Gáis Éireann to Ervia. In my view this legislation affords an excellent opportunity to enhance significantly the quality and availability of modern resilient and future-proofed broadband infrastructure through the use of the ESB’s extensive electricity networks. This has the potential to extend the reach of fibre to the home broadband connectivity throughout Ireland. I believe it is a further important step in this country positioning itself as a front runner in tackling the broadband infrastructure deficit.
The ESB has identified an opportunity to use its electricity distribution network to provide telecommunications services in the Irish market. I understand the company has sought a joint venture partner with a view to providing such services on a wholesale-only basis. I am advised that this in turn could facilitate the delivery of high speed broadband services by retail telecommunications operators in the areas served. The legislation is merely for the purposes of enabling the use of the ESB’s infrastructure and is not specific to any given project.
My Government colleagues and I consider this to be a very welcome development and one which is very much in the spirit of the national broadband plan. The plan, which I published in August 2012, commits to the delivery of high speed broadband throughout the country. This commitment is to be achieved by ensuring the environment is right to maximise investment by the commercial sector, and through a State-led investment in those areas where it is evident the market will not deliver. The plan also specifically commits to the use of State assets to accelerate the roll-out of high speed broadband infrastructure and services and recognises the role commercial State companies can perform in accelerating the roll-out of such infrastructure.
I remind Senators that the national broadband plan followed on from the publication of the next generation broadband task force report in 2011. The task force, which I chaired, comprised the CEOs of all the major telecommunications service providers in the Irish market plus representatives from some of the smaller players. It considered in detail a number of policy challenges including target speeds, spectrum, investment barriers, demand stimulation measures and the role of State assets in assisting broadband infrastructure deployment. The report of the task force and the subsequent public consultation undertaken by my Department laid the foundations for the national broadband plan.
I have advised the House on progress in implementing the plan on a number of occasions and would like to take this opportunity to provide a further update. Of particular note is the ongoing very significant level of commercial investment that is taking place in the fixed and mobile telecommunications market. In some instances, commercial telecommunications providers are investing in services and coverage that significantly exceed the targets they committed to when the national broadband plan was published. This is good news for consumers and business where high speed broadband services are being rolled out. It is also a vote of confidence in the broader indigenous economy.
Despite these welcome developments it remains the case that many towns, villages and communities, particularly in rural Ireland, will see very little of this investment. Ireland’s widely dispersed population and topography means that there are some areas where it is simply not viable for the commercial sector to provide services. Intensive technical, financial and preparatory work to define the scope of the State-led investment committed to under the national broadband plan is continuing. This investment will facilitate the widespread availability of reliable and guaranteed high speed broadband. In parallel, a comprehensive mapping exercise of current and anticipated investment by the commercial sector is advancing. This exercise will identify where the market is expected to deliver high speed broadband services in the coming years and consequently the precise areas that will need to be targeted by the State-led investment.
In order to progress the State-led investment, a full procurement process must be designed and EU state aid approval must be obtained. The procurement process for the approved intervention will be carried out in accordance with EU and Irish procurement rules and it is expected that it will be launched in 2014.
As I mentioned earlier, the national broadband plan promotes the use of State assets to accelerate the roll-out of high speed broadband infrastructure and services. The national broadband plan recognises that a number of commercial and non-commercial State bodies are already leveraging their existing assets to actively provide infrastructure and services to the telecommunications market. These assets continue to play an important role in improving broadband services and the plan commits to exploiting any further opportunities that arise, with a view to accelerating the roll-out of high speed broadband. The ESB is already providing telecommunications services utilising the electricity transmissioninfrastructure. The purpose of the legislation is to allow the ESB to leverage its extensive and robust distributioninfrastructure to provide high speed broadband infrastructure in Ireland.
I understand from the ESB that it is currently considering proposals to provide such services, on a wholesale, open access basis with a joint venture partner. In August 2012, the company launched a call for expressions of interest in such a joint venture, attracting considerable interest from the telecommunications sector. I await with interest detailed formal proposals from the ESB in relation to the proposed joint venture. It should be noted that the legislation is not project specific and will allow the ESB’s considerable distribution infrastructure to become available to the telecommunications market, even if the current joint venture proposals do not come to fruition. The ESB’s detailed proposals are awaited and my Department’s assessment will, among other things, include an assessment of the proposal’s compliance with detailed and binding EU and national regulatory requirements in the electronic communications market.
The regulation of the liberalised electronic communications market is a matter for ComReg which is independent in its functions. Should the ESB enter the telecommunications market, either in the manner outlined or by any other means, it will be subject to all applicable provisions of the Communications Regulation Acts 2002 to 2011, related secondary legislation and, where appropriate, binding regulatory decisions imposed by ComReg.
I propose to outline the main provisions of the Bill. For the convenience of the House a detailed explanatory memorandum has been published and this provides a synopsis of the provisions. The Bill is relatively short consisting of nine sections.
Section1 is a standard provision providing definitions for certain terms and words used in the Bill. Section 2,if enacted, would provide an explicit legal basis for the ESB to engage in the provision of electronic communications networks and electronic communications services where the company identifies a commercial basis for doing so, either alone or with any other company. The House will be aware that the ESB already operates a fibre network across its electricity transmission system.
This network, which was developed by the ESB, originated to assist the ESB’s management of its electricity network.
Over time additional capacity on that network has been sold to operators in the electronic communications market. The current proposal differs from the ESB’s existing fibre network in that it would be a stand-alone business with no direct connection to the management of the electricity network and it may be developed by way of a joint venture. It is therefore considered prudent to provide an explicit legal basis to allow the ESB to engage in the electronic communications market in the manner now proposed as provided for in section 2.
Section 3would permit the ESB to agree to provide access to its electricity infrastructure to another company, including a joint venture company, to enable the company to develop electronic communications infrastructure along its electricity network where it is commercially viable and to provide services of any nature to facilitate such development.
Section 4redefines the meaning of electric line in the ESB Acts 1927 to 2004 and the Electricity Regulation Act 1999 to provide a single definition of electric line on the Statute Book. The section also extends the definition of electric line to include electronic communications infrastructure which is suspended from the electricity network. This provision also includes a retrospective element to maintain the status of the existing electronic communications network following this amendment. The ESB’s electricity network crosses private land in some places. In recognition of this, the existing Electricity (Supply) Acts 1927 to 2004 provides statutory wayleave rights to the ESB which allows it to cross private lands subject to the payment of compensation where appropriate.
Section 5would extend this right to any company authorised by the ESB to install electronic communications infrastructure along its electricity network, subject to the requirement to pay compensation where appropriate. This section qualifies this right by requiring the consent of the Commission for Energy Regulation in order to exercise the wayleave right. As I have said, section 5 would extend the wayleave rights currently available to the ESB to construct the electricity network on private lands to the construction of electronic communications lines attached to its electricity network. These wayleave rights include a right to secure fixtures to any wall, house or building. This right is not available to other providers of electronic communications infrastructure. It is not appropriate therefore to make that power available to the ESB or any subsidiary or joint venture in relation to its commercial activity in the electronic communications market. Accordingly,section 6provides that the authority to secure fixtures to walls, houses or buildings will not apply in respect of the construction of an electronic communications network.
Section 7 is a standard provision enabling the expenses of my Department to be paid out of moneys provided by the Oireachtas.
Section 8concerns the change of name of Bord Gáis Éireann to Ervia, a change which requires a statutory footing. The Gas Regulation Act 2013, which was enacted late last year, provided for the sale of the energy business of Bord Gáis Éireann. As part of the sale process the ownership of the Bord Gáis brand will transfer to the new owner. Once the bidders have acquired the Bord Gáis energy business and its brand, Bord Gáis Éireann may no longer use the words “Bord Gáis” in the name or brand of either its group or network business.
BGE has given careful consideration to appropriate alternative names, having regard to the changing nature of its business, given both the sale of the energy business and the establishment of Irish Water as a subsidiary of Bord Gáis Éireann. The name change from Bord Gáis Éireann to Ervia will take account of the expanding functions of BGE. The word “Ervia” is based on the Irish word “Éire” and the Latin word “via” and is intended to capture BGE’s new role as the parent company of Irish Water together with Gas Networks Ireland, the subsidiary of BGE which will have responsibility for the gas networks infrastructure and interconnectors, which are to remain in State ownership. It is important to note that Ervia will simply be a corporate name, and the main interactions with customers and the public will be through Irish Water and Gas Networks Ireland. There is therefore no strategy to advertise or market the Ervia name and the costs of re-branding will be kept to a minimum. Section 9, the concluding section of the Bill, is also a standard provision providing for the Short Title, collective citation, construction and commencement provision.
As I have stated, the current Government policy is to deliver high speed broadband access throughout the country by creating an environment conducive to commercial investment and by using State assets and commercial State companies where appropriate. There is already significant progress in the provision of fixed broadband and mobile data services which is attributed to significant network investments, particularly by Eircom, UPC, Sky, Vodafone, O2, 3 and Meteor, among others. This investment is delivering both higher broadband speeds and increasing numbers of users opting into bundled communications services to secure better value.
As of September 2013, there were more than 1.67 million broadband subscribers in Ireland, an increase of 1% on 2012. In the fixed line market, approximately 42% of all broadband subscriptions were equal to or greater than 10 Mb per second, up from 31% the previous year. In the same period 33% of all broadband subscriptions were equal to or greater than 30 Mb per second, up from 20% in September 2012.
In the mobile market the most significant headline in recent times was the €855 million commitment made by four mobile services providers to secure radio spectrum capable of delivering next generation 4G services capable of providing significantly increased data services. In the year to September 2013, data volumes across mobile devices increased by 40% as the number of SMS or text messages sent by mobile users fell by 25% in the same period during 2012 to 2013. The increase in data traffic is reflected in a 17% increase to 2.7 million in the number of smartphones and tablets in use in the year to September 2013.
It is worth noting that the digital part of Ireland’s economy is growing at a rate of 16% per year. The opportunities this presents must be harnessed to maximise the accruing economic and social benefits. Reliable connectivity to the Internet is critical for business growth and development, and is an essential requirement for more flexible work patterns. From a societal perspective, it is an important facilitator of many activities, including education, entertainment, business, e-health, e-Government and, increasingly, a simple and effective way of communication through social media.
The exponential growth of digital technologies across the globe is further driving demand for high speed broadband. Consequently, high speed, quality and reliable broadband as an enabling infrastructure for economic and social development is becoming a critical component of a 21st century society. I believe this Bill is a positive step in facilitating the accelerated roll-out of high speed broadband infrastructure in this country. It is my view that the ESB’s proposal will have positive impacts on the Irish market.
We have already seen the benefits that competition can bring in delivering commercial investment in electronic communications infrastructure and providing customer access to higher broadband speeds. In the mobile market, last year’s successful auction of spectrum, following the switch-off of analogue television, shows that the commercial operators clearly believe there is a vibrant market here. The national broadband plan is a clear expression of the importance of broadband infrastructure to the achievement of Ireland’s economic and social objectives. High speed quality and reliable broadband as an enabling infrastructure for economic and social development is becoming a critical component of 21st century society. I believe the potential to use the ESB’s considerable network to deploy fibre will contribute significantly to the commercial deployment of high speed broadband and will be important in terms of meeting the objectives of the national broadband plan. I look forward to hearing the views of the House on the Bill, a constructive Committee Stage debate and the assistance of the House in facilitating the early passage of the Bill into law.