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Government should take back control of broadband plans, economics lecturer says

The Government should take back control of plans for a national broadband network says economics lecturer Donal Palcic.

He told Newstalk Breakfast that the withdrawal of both Siro (the ESB/Vodafone joint venture) and Eir as bidders for the contract had removed all competition from the procurement process.

Dr Palcic pointed out that the original KPMG Ownership Report for the NBP published in December 2015 had asserted that placing the long-term ownership of the network with the private sector "allows private sector bidders to leverage the use of their existing infrastructure and encourages them to continue to invest in the network".

Private sector bidders would therefore place a high "strategic value" on winning the contract, which would lead to a high degree of competition and would drive down the amount of subsidy required from the government.

This “whole rationale” has not disappeared, he said with the departure of the other bidders.

Bidders with their own infrastructure could leverage that to allow the roll out of broadband at a lower cost.

The KPMG report, anytime it refers to the gap in funding models, it always stresses competition which would drive down the cost of subsidy by the Government.

The University of Limerick lecturer added that now there is a situation where the only bidder does not have a network or infrastructure to leverage and no competition, so there is no way for the current bidder to arrive at a lower subsidy.

Dr Palcic suggested that the Government could utilise a number of State services such as the ESB, Bord Gáis and Irish Water to coordinate their work so that when they are “digging up roads” they could install fibre optic cable along with their own services.

This could be done at a lower cost and would avoid duplication of costly civil works, he said.