National Broadband Ireland : implementation and progress

National Broadband Ireland can be hit with two types of penalties from February 1 next year if it continues to miss targets governing the rollout of high-speed broadband to more than 550,000 premises.

The multibillion-euro National Broadband Plan (NBP) is lagging far behind initial targets with only about 2,700 of the 554,000 premises in the plan connected to date.

Eamon Ryan, the communications minister, last week said it could be 2023 before National Broadband Ireland (NBI) caught up with the targets which included passing 115,000 homes and businesses by the end of next January. This has since been scaled back to a target of 60,000.

Documents released to the Business Post under freedom of information legislation show that NBI could face two penalty regimes from early next year: one related to delays in building the network and another governing how quickly customers are connected to the network and its performance.

Should NBI continue to miss deadlines governing the rollout, the Department of Communications can delay the payment of related subsidies to the company.

The penalties can be applied where there is a delay in reaching a build milestone of more than 28 days. If levied against NBI, the penalty will increase for each day over the 28-day period that the milestone is not met.

The record provided to the Business Post is partially redacted, including portions detailing the cost per day. A cap will also apply to the penalty but this information is also redacted.

According to the note, NBI can claim a “delay reimbursement” should it meet another milestone ahead of time.

The second type of penalty the department can levy against NBI is described as a “performance credit”. These are intended to make sure NBI adheres to performance metrics on minimum upload and download speeds, the number of faults on the network and the time taken to repair them, pricing and availability.

There are 17 key performance indicators catered for in the contract in total.

“Should NBI’s performance not be in accordance with the requirements contained within the NBP contract, performance points and consequently performance credits shall accrue which will reduce the value of subsidy payments received by NBI,” officials stated in the memo.

“The application of performance credits financially incentivises NBI to operate the network in accordance with the performance requirements of the NBP contract.”

The briefing document on penalties contained in the contract was prepared for Ryan and Ossian Smyth, the department’s junior minister, in August.

Ryan told the Oireachtas Communications Committee last week that NBI had encountered a number of challenges which had delayed its progress including poor access to ducting, problems in obtaining licences from local authorities for works being carried out and delays caused by the Covid-19 pandemic.

The latter two issues had largely been resolved but the challenge of existing ducting not being “as accessible as originally projected” remained, Ryan said.

The Business Post last week reported that 45,000 homes and businesses in the NBP intervention area had already been passed by Eir’s network, raising concerns about the potential for taxpayers’ money to be wasted by NBI reaching those same premises with its network.

Alternatively, the company and the Department of Communications could choose to strip the premises from the NBP and allow NBI to claim up to €100 million in compensation for encroachment by private operators in the areas earmarked for the plan.

Ryan said his officials had told him that the number of premises already passed was not as high as 45,000 and that the issue was “not undermining” the NBP contract. He was unable to provide the committee with alternative figures.

Speaking in the Dáil last week, Smyth said he had noted the Business Post’s reporting on Eir having passed tens of thousands of premises and described it as “great”.

“That is great as it means these households now have a choice between different suppliers, whether it is the subvented supplier or a commercial supplier. That is an advantage which was foreseen in the contract and accords with what was in the tender and contract,” he said.