ESB (Electronic Communications Networks) Bill 2013: Second Stage

Photo of Pat RabbittePat Rabbitte (Minister, Department of Communications, Energy and Natural Resources; Dublin South West, Labour)

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 9the 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.

Photo of Mark DalyMark Daly (Fianna Fail)

I welcome the Minister for Communications, Energy and Natural Resources, Deputy Rabbitte to the House. We will support the passage of the Bill as it will increase competition in the broadband and electronic communications market and will reduce costs to the consumer.

Our concern relates to the investment required to provide broadband in rural Ireland. I am sure the Minister is great at studying “The House of Cards” on Netflix, but that might be outdone by activities in the House this week. Surveys conducted by Netflix, show the broadband speeds in Ireland are among the worst in Europe. The issue of high speed broadband will be resolved only by investment in infrastructure, especially in rural areas. My colleagues and I deal with communities who cannot even access a proper mobile phone service in places such as Caherdaniel, Castlecove and others in County Kerry.

They are fighting to have a better mobile telephone service. Today we are talking about broadband and high speed broadband. My concern is that it will be mainly concentrated in Dublin in terms of investment and to give a maximum return for the new structure. There will be some element of having to provide broadband in rural areas – the 15% that generally lose out in that regard are those people who live on the peripheries. That would further isolate and make sure that those populations continue their history of population decline.

I seek clarity about the use of the term “compensation where appropriate” in the explanatory memorandum. The Minister is aware of the Supreme Court rulings on the rights of private property owners. Perhaps he will clarify what is meant by the words “where appropriate”. I know that the use of State facilities, such as Garda stations and other facilities, including ESB and Telecom Éireann yards, and even hospitals, are utilised by agreement. The term “compensation where appropriate” is worrying. What does it mean? Does it apply to private landowners such as farmers, forestry owners or private individuals? What about monopolies and the commitment given to supply 30 Mb to all rural homes by 2016? We all are aware of previous governments making commitments and asking for targets and guidelines. Having targets and guidelines is all well and good. However, there must be financial consequences if those to whom we give the rights do not install a proper infrastructure in rural Ireland. If there are no financial consequences for them then they will not meet the guidelines and targets. They will not benefit commercially because installing the infrastructure will cost them more than what they will earn from the revenue generated.

I am concerned about this new structure. It gives companies serious powers and some regard the provision of fibre broadband for resale to be a monopoly. I wonder how the issues of compensation where appropriate and providing a broadband service in rural Ireland will be addressed. The mobile telephone service is not up to scratch so I am concerned about the proposed broadband service. We welcome the legislation but we have a few concerns.

Photo of Tony MulcahyTony Mulcahy (Fine Gael)

I echo the sentiments expressed by Senator Daly on mobile telephone coverage. One does not have to go to south-west Kerry to encounter the problem. The worst area for coverage is between Roscrea and Nenagh. Anybody who travels the route regularly will have discovered that there is no coverage in the region. Mobile tekephone coverage is another issue that we need to do something about.

Outstanding work was done by ESB crews since the first storm hit the country at Christmas. We know that there was a threat to power supplies before Christmas but mother nature did not have a hand in it because, thankfully, the danger was averted. Since Christmas various storms have wreaked havoc on power supplies all over the country. ESB crews have been out 24 hours a day in all weathers trying to restore power where it was lost and for that service the House is most grateful. Thank God no pylons were blown over so we might be able to deal with the issue of pylons. The crisis might set off some other story and we may need to strengthen the current network of pylons.

I welcome the Bill because it will give a legal basis and will enable the ESB to engage in the electronic communications networks and electronic communications services. The Minister has described the various sections. As has been highlighted, the Bill may be cited under the Electricity (Supply) Acts 1927 to 2004 as part of the ESB Acts 1927 to 2013.

A feature of modern life and business in Ireland in the 21st century is the need to enable us to communicate quickly and cheaply with each other and with those we do business with daily. The days of having to organise the operator to arrange a telephone call in advance in order to speak to someone either in the USA or further afield are a distant memory. Nowadays we can use a mobile telephone to contact anybody located anywhere in the world that has a network connection.

We may be writing a lot fewer letters now but we are communicating a lot more than we did ten years ago. We have various applications on our mobile devices these days such as Viber, WhatsApp, Messenger, Facebook and Twitter. We can even Skype relatives and friends at home and abroad. However, there are communications issues that we need to address. One of the biggest issues for consumers outside of large urban areas is a fast reliable broadband service. Some people who live in large urban areas take for granted the broadband services that they currently enjoy. Broadband speeds have improved but they need to improve further if the country is to attract major foreign direct investment. Also, our own domestic job creators need to have faster speeds if they are to compete on an equal footing with overseas competitors.

In rural areas people can only dream of fast broadband and in many areas the inhabitants can only dream of getting broadband. While Senators catch up on the latest instalment of the “House of Cards” on Netflix, please spare a thought for people who live in rural areas who may, if they are fortunate to have an Internet connection, get broadband speeds of 2 Mbps but only at certain times of the day. Due to the way the population is spread it does not make commercial sense for various communications providers to roll out a network that would connect to every property in the country. It would be far more efficient if they could hobby horse on the back of a wholesale partner that currently has such a network. The ESB can be and is that partner. The company has built up a large network of lines and infrastructure all over the country. It also has the expertise and the proven track record that has been internationally recognised.

Over 30 years ago the then semi-State company, Telecom Éireann, had a very good international reputation for its communications network. Years of neglect since privatisation and asset stripping has led to a build up of debt by various owners. It is only in recent years that Eircom has started to reverse the situation and has invested heavily in broadband. Such a development is welcome as investment by telecom companies will strengthen our economy.

Every week millions of euro are spent online on overseas e-commerce sites. That money could be spent here if Irish entrepreneurs had access to a super-fast broadband service. They could build profitable e-commerce sites that could operate whether they were located on top of a mountain or in the middle of a city. Jobs can be created in businesses that do not yet exist but we must first create the right conditions for this to happen. By opening up the ESB network to suitable partners from the commercial sector we can create suitable conditions. The more players in the market the better for the end consumer. Such an initiative would also contribute to the Government’s national broadband plan, which promotes the use of State assets for the provision of high speed broadband in areas not currently served.

The recent announcement that the four mobile service providers will commit €855 million to secure radio spectrum capable of delivering 4G is a very welcome development. There were 2.7 million smartphones and tablets in use up to September 2013. They need a secure and robust network to enable access to content on the Internet or data storage by the provider. By enabling the ESB to sell space on its network we can speed up access and penetration.

I welcome the provisions in the Bill for wayleaveson private land to be provided to such bodies as the ESB as it enters into commercial arrangements. Compensation will be provided to landowners where deemed appropriate. All works will come under the remit of the CER, thus ensuring that it will be regulated.

In summing up, this major issue has been talked about for a number of years and we have an existing infrastructure. The big difference between this Government and all of the governments that went before it is that we are using the infrastructure now and have made a decision to make progress. The difference is that decisions have been made and actions have been taken.

With regard to the ESB, I believe that there is no house in the country that does not have electric light. I should ask Senator Mark Daly but I think the last place to be connected was the Black Valley in County Kerry. The ESB has a network so it makes perfect sense for us to use it.

Photo of Sean BarrettSean Barrett (Independent)

I welcome the Minister. I noted the reference to the Black Valley. It was former Deputy Peter Barry who was the Minister responsible for connecting the Black Valley with the system. It was one of the last locations to be connected, as Senator Mulcahy pointed out.

I welcome the Minister here and I also welcome the Bill. The more competition in telecommunications the better. The networks do exist and I have seen the range of equipment used at ESB stations throughout the country. There is also some scope for CIE to contribute. The railways had a communications network between the stations and so on. It is available and can form part of the technological developments. Senators on this side of the House support the Bill as it will bring Ireland forward in this age of technology, as the Minister has said.

I wish to mention another aspect. The Minister and the Commission for Electricity Regulation must keep pressure on the ESB, previously a monopolistic company, in order to keep electricity prices down as much as possible.

International comparisons highlight that prices are high in Ireland. Professor Colm McCarthy estimated recently that prices are 41% higher than the EU average. The Minister has been known to attend the Kenmare economics conference from time to time and complaints have been made there that the regulator is easy on the ESB given it is a high cost operation with executives being paid multiples of what the Taoiseach earns. That pressure on behalf of the consumer and overall national competitiveness to keep energy costs down has to be maintained and I will support the Minister in all his efforts to do so. We cannot afford to let that slide in any way.

This is a worthwhile measure to increase competitiveness in a growing sector of the economy, electronic communications. The more people in it, the merrier. I will support the legislation.

Photo of John WhelanJohn Whelan (Labour)

I welcome the Minister to the House. Any move to enhance and add value to the State’s infrastructure is positive, including the extensive infrastructure overseen by ESB Networks. I echo Senator Mulcahy’s commendation of the Trojan work in ferocious, difficult conditions over the past number of weeks of ESB crews who braved the elements and put their own health in risk to restore power to homes, businesses and farms. I also commend them on the industrious and committed way they set about their work.

I welcome the Bill and the capacity it will provide to address the chronic rural broadband deficit. The Minister and his Department, in concert with others in government, have made great strides in improving investment in this area, which was neglected for years largely following the ill-judged privatisation of Eircom at a time when the then Government should have protected the infrastructure for the benefit of the State rather than selling it off. This is an example of infrastructure that the State does a better job of managing by taking a long-term strategic view rather than short-term profit taking. There has been considerable progress in the roll-out of high speed broadband in post-primary schools. The Minister and the Minister for Education and Skills deserve great credit for pursuing this project. I have witnessed first-hand how much this has enhanced and improved the infrastructure within our education system to the benefit of future generations as they emerge to pursue their careers.

Unfortunately, in keeping with comments by previous speakers, Timahoe, where I come from, is a Netflix no-go area just like Ballyroan and other towns and villages in the area. Like others in rural Ireland, I will have to wait for the box sets because, despite changing service providers and despite investment in the infrastructure locally, the broadband speed is not fast enough to support the watching of movies or television programmes. This is an inhibiting factor in respect of job creation in the regions, for example, in the agriculture sector, and it is also an issue for businesses and domestic users. The enhancement of rural broadband infrastructure could be enabled by this creative initiative through which the ESB will form strategic alliances with other companies and this will improve quality of life and stimulate job creation and spin-offs for small businesses, which are inhibited by the lack of high speed broadband.

I tracked the progress of the legislation through the Dáil recently. It would be remiss of me not to take the opportunity in an overall context to refer to ESB Networks and the expansion of the national grid and the comments of my party colleague, Deputy Anne Ferris, in the Lower House. The Minister will be only too well aware of ongoing public concern about the EirGrid’s plans to double the size of the national grid. I do not need to go through the data but energy consumption during peak periods in the State averages 5,000 MW. Currently, proposals to generate 3,500 MW of energy through wind turbines is going through the planning process, which would provide a high proportion of our energy needs. However, it is more alarming for me and others throughout the country who have come to me with their concerns that there are plans in the pipeline to generate an additional 28,000 MW via wind energy for domestic use or export. Would it be wise for us to step back a little from that – I know the Minister will address a key wind energy conference later today – to conduct a mapping exercise in this regard? Senator Landy has referred to the mapping exercise in recent weeks because this would provide us with an audit of existing wind energy provision, including wind farms and turbines, the projects going the planning process and those that are proposed and what would be required to connect them to the national grid or undergrounded through DC cable to the European grid. We would then have an overview of the grid capacity required to facilitate this extensive provision, which I believe is excessive and will not, ultimately, be economically, environmentally or socially sustainable.

There is considerable and growing unease among the public with questions raised with us as public representatives on an ongoing basis about who is driving this policy and to what end. I am trying to be fair to everyone and I ask the Minister to look into this. Throughout his political career, he has always upheld the highest standards of probity and integrity but there are questions, to which we cannot turn a blind eye, regarding vested interests and conflicts of interest among those involved in policy formation and those who will ultimately benefit if the policy is implemented. We have a duty to explore this. Brochures were circulated throughout the midlands by a large wind farm company during the Christmas period, which named people who are working for it as public affairs consultants and who are members of its board. I will not name them because it is not appropriate. They are lobbying in the interests of wind farm companies and developers while playing an insider role in policy formation and design.

The roll-out of the grid in a bid to double its capacity by EirGrid, on behalf of the taxpayer, with a cost of €3.2 billion will add value to our infrastructure which is important. It is also important, however, that we do not build a house of cards that could be blown over if it is not economically sustainable.

Photo of Feargal QuinnFeargal Quinn (Independent)

I am glad the Government with this legislation is recognising that we have to invest for the future. For several years, I was chairman of EuroCommerce, an organisation which spans the retail, wholesale and international trade sectors in the 28 European Union member states. I recall when visiting Estonia, I was impressed how they were so far advanced in e-commerce because of their excellent communications infrastructure. We need essential infrastructure such as next generation broadband. In Ireland, by estimate we only have 0.5% of fibreoptic connections compared with 61% in Japan and 57% in South Korea. This legislation is about giving the ESB a legal basis to engage in broadband provision.

Should we be giving the customer some legal right in this area? For instance, in 2010 it became a legal right for every Finn to have a 1 Mbps broadband Internet connection. If we included a similar provision in this legislation, it would give the Government a huge incentive to stay true to its commitment to provide next generation broadband. It would be interesting to hear the Minister’s views on this proposal. Businesses can really benefit from a broadband connection but I am concerned this legislation will not benefit everyone equally. As could be expected, it will be urban areas that will benefit first from fibreoptic broadband. Indeed, a recent report in the Irish Independent points out the deficiencies in the plan. Any ESB related fibre broadband will most likely simply be in areas that already have – or are scheduled for – high-speed broadband deployment already. The ESB has indicated that it will only look at towns of at least 4,000 buildings for new broadband services. Geographically, this metric rules out most of Munster and Connacht. The reality is that ESB-based fibre broadband is almost certainly not coming to rural locations.

I am particularly concerned for those running businesses in rural areas. Realistically, rural communities and businesses will be the last to benefit from such broadband. Will the Minister provide any guarantees that rural communities and businesses will not miss out? When I was chairman of An Post, I got to know nearly every post office in the country. I now see how they are threatened by such developments. Would it be possible to guarantee there will be such broadband for rural areas? Will the Minister be open to placing some such guarantee in the Bill? Should we first, as a priority, be targeting business and homes which have poor Internet access?

It has just been announced in the North that £24.5 million will be put into improving broadband access for 45,000 premises struggling to get online. BT has even pledged to complete the improvements by December 2015 to ensure consumers and businesses can benefit from them as quickly as possible. That is very quick. Will we include provisions in this Bill to target and help those businesses in particular who are suffering because of poor connection? If BT can provide access to 45,000 homes in such a short timeframe, should we be looking to get such a company to bid on providing similar access here? Do we need the ESB at all? Why not just open up the process and pick the best company at the lowest price? Why is the ESB’s expertise needed to set up fibreoptic broadband connections? That is a serious question. We saw where the expertise of those at Irish Water got us. It hired some outside consultants and paid them millions of euro. Why not simply cut out the middleman in the first place? We need to question moves such as this given the Irish Water situation.

How long will it take for this Bill to pass through the Oireachtas? Over 90% of homes in the North are connected to superfast fibre cabinet. Why are they so much faster across the Border? Is it because we have had so little investment over the years? Will we have a situation where businesses just across the Border will move further ahead in advantages compared with us in the South? I support the Minister’s moves in dealing with these challenges. I hope, however, it will be a quick process. One of my criticisms of what happens here is how long it takes to get things done. I believe we could move faster on this.

Photo of Terry BrennanTerry Brennan (Fine Gael)

Ar dtús, ba mhaith liom fáilte a chur roimh an Aire go dtí an Teach. Bíonn sé anseo go minic agus tá áthas orm é a fheiceáil arís. I commend all ESB, local authority and Eircom workers, as well as gardaí, on the work they did to restore services during the recent storms in very dangerous conditions. Unfortunately, one Eircom subcontractor paid the ultimate price with his life while trying to restore telephone services.

I, along with other colleagues, have highlighted the deficiencies in broadband provision in rural parts. This Bill will enhance our broadband infrastructure, utilising the ESB’s networks which traverse our country. The extensive ESB network will provide an opportunity to extend the reach of fibre in Ireland with the potential to enhance the provision of high speed broadband and increase competition in the telecommunications market. The Bill provides an explicit legal basis to enable the ESB to engage in the business of electronic communications and services either by itself or in conjunction with other companies. It is a further step in Ireland positioning itself as a front runner in tackling the broadband infrastructure deficit.

Many small and medium-sized enterprises operate on the Cooley Peninsula in north Louth, employing up to 2,000 people from precision engineering to the hospitality sector. The area, however, has inefficient mobile telephony and broadband networks. I hope the Bill will enhance broadband provision there. This is a ground-breaking initiative, one which is in the spirit of the Government’s national broadband plan.

That plan specifically promotes the use of State assets to accelerate the roll-out of high speed broadband infrastructure and services. The Government is firmly committed to delivering high speed broadband throughout the country through a combination of commercial and State-led investment. The potential to use the ESB’s considerable network to deploy fibre will contribute to the commercial deployment of broadband. As I said, ESB networks traverse every townland throughout the country and it is great to see the co-operation by the ESB in regard to this initiative.

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 a 21st century society. I welcome the Minister’s assurances that he will pursue the national broadband plan, which is essential. This Bill is a major and very important step in the provision of high standard, quality broadband, and is most welcome.

Photo of Trevor Ó ClochartaighTrevor Ó Clochartaigh (Sinn Fein)

Cuirim fáilte roimh an Aire. Ach an oiread leis an dream eile, fáiltímid roimh an mBille seo. Is maith an céim chun tosaigh aon rud a chuireann cúrsaí leathanbhanda ar fud na tíre chun cinn. Is cóir aitheantas a thabhairt dó sin agus tá sé sin á dhéanamh againn inniu.

As has been stated by previous contributors, the value of the ESB teams was seen in recent weeks. It was ironic that, before Christmas, when there was a danger of a strike being called by ESB workers who were standing up for their rights in regard to pension schemes, people were very critical of them. However, we did not hear much criticism of them since Christmas. Fair play to them for the great work they have done in recent weeks, as they always do.

Ba mhaith liom ceist bheag bídeach amháin a chur sula dtosóidh mé isteach sa phríomhrud. Bhí mé ag éisteacht le Seán Ó hArgáin ag labhairt ag comhdháil an Lucht Oibre ag an deireadh seachtaine. Dúirt sé gurb é Páirtí an Lucht Oibre an páirtí is láidre ó thaobh na Gaeilge a chur chun cinn. Dúirt an tAire ina réamhrá níos luaithe go bhfuil sé i gceist “Ervia” a úsáid mar ainm nua ar Bord Gáis Éireann. Céard a chiallaíonn “Ervia”? Cén fáth arís eile a bhfuil an Stát agus an Rialtas ag cur ainm nua Béarla – nó rud éigin mar sin – ar eagraíocht Stáit in áit ainm breá Gaelach? Is trua é nuair a bhí deis ag an Rialtas ainm breá Gaelach a chur ar an gcomhlacht arís.

I welcome the Bill. It is important legislation that deals with the networking of fibreoptic cables that will, hopefully, develop an area of infrastructure where Ireland has been severely lagging behind. There are many areas in Ireland, most of them rural, which still do not receive an adequate broadband connection. The lack of broadband or poor service levels is becoming a constraint in accessing services. I know, particularly from my own experience in Connemara, that a number of years ago Údarás na Gaeltachta was in a position to put investment into exchanges to increase the broadband capacity that Eircom was able to carry, but, due to some competition laws, it had to stop doing that. Since then, we have been lagging behind in the provision of broadband in certain areas.

There is a nest of companies in the Indreabhán area in Connemara, where there are particular issues around broadband, and many of them are finding it difficult to survive because of the capacity that is available to them. Therefore, I share many of the concerns and I agree that many of the questions raised by Senator Quinn are very valid, in particular whether this new model will be able to deliver that last mile of broadband. At present, the capacity running down the line from an Eircom exchange to a house in a rural area is not able to carry broadband for the last mile, which, ironically, is the situation in my own house, where Eircom cannot provide me with a service.

It is important to note that we have seen huge strides forward being made in the North, which seems to be way ahead in the provision of broadband. The Minister might comment on that. It is possibly because there is a different style of delivery and more investment. While the Minister is carrying forward from a legacy of lack of investment in the infrastructure, the North seems to be much further ahead in terms of quality of broadband.

On the ground service delivery in many rural areas is contracting and many services are being further curtailed in the current economic environment, for example, through the closure of banks, post offices and rural Garda stations. There is now near universal acceptance that online access is the norm for some services and quality broadband is an imperative. Proper broadband access is essential for developing a healthy and vibrant economy. The Government must be to the forefront of pushing this agenda if it is serious about Ireland’s economy recovering to its full potential. International research shows that the Internet contributes up to 6% of the GDP in advanced economies and most of the economic value created occurs outside of the information technology sector, with 75% of the benefits captured by companies in more traditional industries. The research also found that the Internet created 2.6 jobs for every one lost arising from technology related efficiencies.

I am glad to learn that the ESB is potentially going to deliver a so-called fibre to the building network. I have one question in this regard. We have been contacted by a number of landowners who are concerned there may be a piggy-backing effect by other companies on the network in question, for example, other media providers, and that there would be no compensation for the people who own the land. The Minister might refer to this in his reply. If there are very profitable, high worth companies that are making a lot of money in providing services in the telecommunications area, and which piggy-back on the ESB network under this new arrangement, will landowners receive some form of recompense for the fact the cables are going through their land?

This so-called fibre to the building network would, hopefully, provide for the highest speeds to be brought to a home, which shows there is forward thinking in the development of the fibre network. Fibre is one of the optimum technologies as it is regarded as the most future-proofed and is, therefore, likely to yield better value for State investment. At a wider economy level, the OECD has examined the benefits arising to other economic sectors of a national fibre to the building network. The analysis examines the cost of deploying fibre to the building across different OECD countries, including Ireland, and has estimated that the combined saving in each of the four sectors over a ten year period could justify the cost of building a national fibre to the building network.

Investment which is designed to deliver next generation broadband should be based on technologies which are future-proofed over the longer term and not just aimed at meeting immediate targets for 2015 and 2020. While the immediate target is to ensure what is outlined in the national broadband plan is reached, the infrastructure that should be put in place should be designed to have benefits far beyond this. Proper investment will not just deliver targets in the short term, it will also benefit the State in the medium and long term.

Ireland performs badly in regard to broadband connection when compared internationally. We currently have one of the lowest access levels in the European Union to broadband, which hardly makes us the best small country in which to do business. This cannot be solely blamed on our size or our population density. Ireland has a relatively low proportion of people living in urban areas compared with the OECD average. The western region has suffered significantly in terms of broadband access, which has put us at a distinct disadvantage compared with more populated areas of the country. The western region is a predominately rural region, with 64.9% of its population living outside of towns with a population of 1,500 or more, compared with 38% nationally. In the western region, 16.4% of the urban population lives in small towns, while nationally only 6% of the urban population lives in such towns. It is clear, therefore, that any strategy rolled out must recognise the distinct population structures in the west, and the Government must adopt a policy that recognises this fact.

Photo of Paschal MooneyPaschal Mooney (Fianna Fail)

The Senator should conclude.

Photo of Trevor Ó ClochartaighTrevor Ó Clochartaigh (Sinn Fein)

In the western region, e-learning is well-established as a delivery mode. For example, IT Sligo has pioneered its use nationally and internationally, the Mayo Education Centre has been delivering online courses internationally for the last decade and NUIG and GMIT deliver similar courses. However, online learning has been severely hampered in these institutions by inadequate upload and download broadband speeds.

Photo of Paschal MooneyPaschal Mooney (Fianna Fail)

The Senator is at least two minutes over time.

Photo of Trevor Ó ClochartaighTrevor Ó Clochartaigh (Sinn Fein)

Tá brón orm. To conclude, we welcome and support this initiative and hope it delivers on all the potential that exists.

Photo of Denis LandyDenis Landy (Labour)

I welcome the Minister, Deputy Rabbitte, to the House. I join other speakers in complimenting the ESB workers on the effort they have put in. We sat here on Private Members’ legislation one Wednesday night to prevent utility workers from having the right to withdraw their labour. On that occasion, I spoke of the efforts that the ESB workers, among other workers, put in during the 2010 snow storms. Little did I think we would be giving the same praise to them for working in the difficult conditions caused by the last three weeks of storms. I commend every one of them on their work, as well as all of the other front-line services, who were out day and night to make sure the country was able to get over the difficult storms.

I welcome the legislation that is before us today. It is important to tackle the difficult problem of broadband supply to rural areas. I echo colleagues’ concerns regarding the mobile network service. In the very early days of this Seanad I raised the problem of poor mobile coverage on motorways, which encourages people to break the law by pulling in on the hard shoulder. This problem could be tackled very easily but, three years after I raised it, it is as bad as ever on the Waterford-Dublin motorway, where there are least three or four blackspots.

Senator Daly referred to the wayleave issue. When this issue was discussed in the Lower House, the Minister responded that there would be very little intrusion onto private lands. My concern is that new contracts will mean new personnel going onto people’s land. Most rural people know and trust their local ESB staff, but might have reasonable concerns about unknown workers coming onto their land. I am also concerned about the compensation issue, as raised by Senator Daly. There must be clarity regarding the word “appropriate” in the legislation. In addition, will the Minister indicate how the policing of access and intrusion will be effected?

The problems regarding broadband coverage in rural areas have been well outlined to the Minister both here and in the Lower House. He told the Dáil that a mapping exercise is under way with a view to obtaining approval at European level. Will the Minister indicate what progress has been made in this regard? Reference was made to the detailed formal proposals the ESB will bring forward with regard to the roll-out of broadband on the existing network. Are we any closer to seeing those proposals? What type of detail can we expect and how far will the improved service extend into rural areas?

In regard to the role of the existing network, is this proposal dependent on the new Grid 25 proposals? Given that EirGrid is a sister company of ESB and the proposals by EirGrid are projected to cost €3.2 billion, is ESB’s hand likely to be weakened in terms of its roll-out of the broadband scheme? I realise that it intends to bring in a strategic partner – according to the media, it will be Vodafone, which will bring in an investment of €400 million – but there will still be a major shortfall in terms of rolling this out. Will ESB be exposed by pursuing the concept of EirGrid 25 at a cost of €3.2 billion?

As already mentioned, the wind energy idea sector in this country has the potential to generate between 23,000 and 28,000 MW. Do we need this for our own use or is it intended for export? If the latter, where is the market? We are given to understand, for example, that the United Kingdom will be able to meet its own requirements through wind from Scotland and through nuclear energy, with several nuclear plants being brought forward in the coming years.

Although I welcome the legislation, it does raise a number of questions which need to be answered. One of these questions relates to the situation of the former CEO of EirGrid, who is now sitting on the board of Element Power. In other words, the person who headed up the concept of the build-out of EirGrid 25 is now sitting on the board of a wind energy company.

Photo of Pat RabbittePat Rabbitte (Minister, Department of Communications, Energy and Natural Resources; Dublin South West, Labour)

I thank Members for their contributions to the debate. The Bill was warmly welcomed in the Lower House, where colleagues were confident, as am I, that it will make an important contribution in terms of improving connectivity, especially in provincial Ireland.

We could have a debate all day long on the question of the international figures, how good or how bad our system is, what happened in Northern Ireland when BT came in, and so on. However, to use the great cliché of the day, we are where we are. We can have an interesting academic debate on why certain things happened, including why Telecom Éireann was privatised in the fashion it was, why its subsequent owners engaged in asset stripping and why the necessary investment in broadband infrastructure was not made. We can also discuss the circumstances in which BT intruded into Northern Ireland, secured state aid approval and did a splendid job there. The decisions made here were different. We certainly can debate those decisions but, ultimately, what is done is done. The task I have now is to ensure there is quality connectivity available as widely as possible in this country.

It is not true that where there is a similarly sparse population in rural parts of other countries, including the United States, that they all have a quality service. Indeed, some parts of the United States have no service at all. The previous Government implemented a commitment under the national broadband service contract whereby a guarantee was given of the provision of between 2 and 3 Mb. Of course, as a result of contention, the actual service can be inferior to that. Nevertheless, the then Government did put in place arrangements for the monitoring of the implementation and delivery of that contract and those channels are there to the present day. The reality is that there would not even be a basic service in many rural areas if that had not been done.

Senator Mulcahy and others referred to service blackspots. A number of providers are currently seeking to roll out 4G and enhanced 3G services. A consequence of that and other work that is under way is that there will, for certain periods, be a deterioration of service in some of these areas. This should be a very short-term problem and the enhancement programme will ultimately see significant improvements in the service. The investment of €855 million by four different providers is a vote of confidence in the future of the country’s economy. It was a considerable quantum when we had the spectrum auction following the closure of analogue television.

In respect of the questions about way-leave, compensation, etc., the position is that we propose to use the existing distribution network. As a result, the level of intrusion onto people’s land will be minimal. Where and if such intrusions occur, they will involve ESB employees or those of companies contracted by it. I do not believe there is great cause for concern in this regard because, as already stated, the existing supply system is going to be used. In the context of compensation, the term “where appropriate” means that if there are particular circumstances where land must be acquired or leased, the matter will be dealt with as appropriate. We are talking here about taxpayers’ money. I recently received a deputation the members of which wanted to advance some arguments about a particular matter. One of the individuals involved was very aggrieved because he thought a particular transmission line was going in the direction of his land. The man in question has suffered a significant loss of income as a result of the line being changed. There is nothing new in all of this. We had the same experience with the roads programme and any difficulties which arose were resolved. We also had a similar experience in the context of the erection of mobile phone masts. Members of both Houses lodged complaints about those masts but the quality of mobile phone services would be much worse had they not been erected. The outcry which occurred at the time was similar to that in respect of the issue under discussion. However, I do not believe anyone would now seriously suggest that there were any scientific or other bases for the outcry, which some of us recall.

We live in a market economy and the rules relating to that economy apply. Under state aid and European Union rules, it would not now be possible to do what Senator Quinn has asked me to do. However, he is correct with regard to the decision taken in Northern Ireland. What we are doing is seeking to acknowledge that the commercial sector is delivering high-quality connectivity in Northern Ireland which is comparable with anything available in Europe and which that sector will not deliver to communities in rural areas of this jurisdiction. As a result, State intervention is going to be necessary. In order for the State to intervene, we will be obliged to engage in the very detailed process that is necessary to satisfy – or cut the mustard with – those in Brussels. That is why we are approaching the end of a very detailed process relating to mapping every area of the country. When this is complete, we will make a submission for approval to Brussels. The purpose of all of this is to ensure that remoter areas will have enjoy quality connectivity in the future. The Bill fits neatly into this process in the sense that, in the context of the overall broadband plan, it is one more piece of the jigsaw. When that jigsaw is complete, the ESB will be able to use its existing distribution system, in co-operation with one or more partner companies, to roll out fibre-optic cable to parts of Ireland where residents would never have imagined that they might have access to future-proofed fibre capacity. In most countries, the latter does not happen. In that context, the Bill is a very important measure and I welcome the support for it. Senator Quinn need not be concerned about the length of time it will take to enact the legislation. The Bill was not a matter of contention in the Lower House . If it proves to be contentious in this House, I do not believe that will be the result of anything it contains. We should be able to enact it quite quickly.

The ESB has already concluded its expressions of interest process and must be very close to announcing a preferred bidder. When that is done, the joint venture will be created as quickly as may be and the process of providing this Rolls Royce service to rural areas will commence. In the meantime, we will be submitting our plan in respect of state aid to Brussels for approval. As Senators will be aware, competition is hotting up all the time in urban areas. In general, the quality of service provided in such areas is already very high.

Senator Barrett referred to energy prices. I hope we will have an opportunity to discuss that matter at another time. I am sure the Senator will welcome the news that the remuneration package of the new chief executive of the ESB is half that of his predecessor. I am not referring to Senator Barrett when I say this but we should not, as Senator Ó Clochartaigh observed, use information that is out of date in order to denigrate people who work for a company such as the ESB, particularly at a time when the position with regard to remuneration has changed dramatically. During the past six weeks we were all very grateful for the extraordinary efforts those people made in very dangerous circumstances to try to ensure that citizens had access to energy supplies. In that context, Senator Brennan highlighted the tragic death of Mr. Michael O’Riordan who worked for Eircom. Like their counterparts in the ESB, Eircom employees were out working in all kinds of conditions in recent weeks. Mr. O’Riordan’s death is a terrible tragedy for his family. I take this opportunity to again extend my sympathy and that of the Government to Mr. O’Riordan’s family.

I take no issue with colleagues who argue that it is not possible to have balanced economic recovery in this country without the necessary infrastructure being put in place. In order to have a strong economy, it is necessary to have water, power and connectivity. We have shown in different ways over the years a disposition to obstruct and delay infrastructure that is fit for purpose. The mobile phone masts I referred to earlier constitute one example in this regard and the road network constitutes another. Money was bountiful at the time when road projects were commenced and, as a result, the authorities were able to buy their way through the country. That was an expensive exercise but at least the necessary infrastructure is now in place and can be used. As a number of Senators pointed out, such infrastructure is not in place in the context of either energy or water. We are attempting to deal with this through the creation of a water utility in State ownership. All I can say to Senator Ó Clochartaigh is that the “Er” in “Ervia” is intended to represent Éire, while “via” is the Latin word for way. The new name for the company was arrived at by means of a competition among staff of Bord Gáis Éireann. I cannot say that I am overly attached to it—–

Photo of Trevor Ó ClochartaighTrevor Ó Clochartaigh (Sinn Fein)

No.

Photo of Pat RabbittePat Rabbitte (Minister, Department of Communications, Energy and Natural Resources; Dublin South West, Labour)

—–but that is the best we can do.

Reference was made to the contribution made by my colleague, Deputy Anne Ferris, in the Lower House. While the matter the Deputy referred to is not directly related to the Bill, I must inform the House that she was both mistaken and wrongly advised in respect of it.

The fact of the matter is we cannot disperse employment to provincial Ireland unless we have an adequate grid system. There are concerns, some of which are fervently held by people and deserve a serious response and consideration, and others of which are daft and off the wall. I have tried to explain that building out the grid for domestic consumer and employment purposes has nothing to do with whether there will be an export project in green energy to Britain. That is an entirely separate issue, yet we are confusing the question of building out the domestic grid with that of interconnection.

The thrust of European energy policy is interconnection. The age of the island energy market is over. Interconnection is a two-way street. The interconnector that we opened approximately one and a half years ago between Wales and Rush is used to import cheaper electricity, which in turn is exerting some downwards pressure on prices in Ireland. In future, we will import nuclear generated energy from the neighbouring island. That will not cause us problems so long as we are importing it. Unlike some of our other problems, we managed to get over that.

It is a pity that the other debate is haunted by misinformation and, in some cases, disinformation and that the fears of ordinary people who understandably want to protect their domestic environment and so on should be unnecessarily stoked. We must have the necessary infrastructure, be that connectivity, energy or water, to develop and accelerate economic recovery. That is unavoidable. The planning process is rigorous in this country and people ought to give it an opportunity to work.

The question of a wind export project to Britain is an entirely stand-alone one that will fall or rise dependent on the conclusion of an intergovernmental agreement between the two countries. Under the European directive, we must have an intergovernmental agreement before we can develop a traded sector in wind energy with the neighbouring island or anywhere else. Since we have uniquely abundant indigenous resources, we have the capacity to exploit those for gain in terms of revenue stream and employment, but we cannot do it without an intergovernmental agreement. We do not have one currently. I have made plain several times that there can be no question of developers throwing cables back and forth across the Irish Sea to plug into the British grid wherever it suits them. The two Governments must and will stay in control. An intergovernmental agreement would facilitate the emergence of a traded sector. We have done all of the preparatory work necessary on our side and are in the concluding stages of a cost-benefit analysis of what economic benefit would redound to Ireland. On several occasions during Question Time and so on in the Lower House, I have explained that, unless the economic benefit to Ireland was clear, there would be no point in proceeding with such an agreement. The analysis tends to show clearly that there would be significant economic benefit for both jurisdictions. Having said all of that, it takes two to tango.

The answer to whether there will be an agreement will emerge early this year, but decisions about our domestic need to provide a grid for the future that is fit for purpose will have to proceed in any event. We must respond to public consultation in respect of how one best does that. This is the issue confronting us.

I thank those Senators who contributed to the debate for facilitating the passage of Second Stage. I assure Senator Quinn that, judging from the welcome the Bill received in the Lower House, we ought to be able to enact it quickly. In those circumstances, my understanding is that detailed work is under way in anticipation of the legislation being passed to bring the joint venture into being. As such, we should be able to put a serious dent in what is admittedly a less than universally adequate service.

Question put and agreed to.

Photo of Paschal MooneyPaschal Mooney (Fianna Fail)

When is it proposed to take Committee Stage?

Photo of Tony MulcahyTony Mulcahy (Fine Gael)

Next Tuesday.

Committee Stage ordered for Tuesday, 25 February 2014.

Photo of Tony MulcahyTony Mulcahy (Fine Gael)

I propose that the sitting be suspended until 1.45 p.m.

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