Public Accounts Committee look at NBS

clohamon

Interesting stuff. So many conflicting lines of logic its hard to know where to start. Aidan Dunning is the Secretary General of DCENR.

http://debates.oireachtas.ie/ACC/2012/05/17/00005.asp

Deputy Paul J. Connaughton: Moving on to the national broadband scheme itself, could Mr. Dunning take me back to the beginning of that process? Were there many companies that tendered for that contract along with 3?

Mr. Aidan Dunning: There were a number of processes. Initially there were a fair number of companies - 15 or 16. Then they were whittled down to four, and eventually we had two.
Deputy Paul J. Connaughton: The initial target was to provide broadband for 166,000 people.
Mr. Aidan Dunning: I want to be clear on this, so the committee is in no doubt about it. We did not set any target in the contract for the service provider. The service operator included a target in its bid, but that was not included in the contract. This was wise because, unfortunately, the number of people who have subscribed to the scheme - about 40,000 at the moment - is below what we had expected. If we had given the service provider a target and that target was not met, the Exchequer may have been asked to increase the taxpayer subsidy for the scheme. As it is, that is fixed at €79.5 million. That was, in my view, good foresight on our part in the interests of the taxpayer.
Deputy Paul J. Connaughton: The initial target was set by 3, the mobile provider.
Mr. Aidan Dunning: Yes.
Deputy Paul J. Connaughton: Can Mr. Dunning tell me the targets suggested by the other companies? Were the figures similar or were they larger or smaller? The point I am trying to get across is that when 3 won the tender bid, I imagine one of the main reasons was its stated target to connect a certain number of people by 2014, but now it looks as though it will come nowhere near it.
Mr. Aidan Dunning: There were a number of factors involved. I do not want to go into the ins and outs of the procurement process, which was quite sensitive. The level at which the company bid was one factor, and what we had available was another. We had to shoehorn this scheme into providing a service using the amount of money we had available.
Another thing was that we were interested primarily in coverage; we wanted to be sure the system that would be established could match the coverage area we had delineated, as needed, so that we could meet the policy requirements. On all those scores we were happy that 3 fitted the bill. What the contract required was that 1,000-plus electoral districts should be provided with broadband by 3. That was specific.
Deputy Paul J. Connaughton: Was it given a specific target in terms of quality?
Mr. Aidan Dunning: Yes.
Deputy Paul J. Connaughton: So it was not just a question of areas?
Mr. Aidan Dunning: As the Deputy heard from the Comptroller and Auditor General already, not only has it hit that target, it has improved on it. We are talking about basic broadband. We had only €78 million to spend from the Exchequer, so we were not aiming for high-speed broadband. None the less, the download speed was 1.6 Mbps at a minimum and, as I understand it, it is achieving twice that on average across the customer base.
With regard to the contention ratio - that is, the number of people trying to use the system at the same time - the contract permitted a ratio of 22, but the actual ratio is five. That means the quality of the connection is better, as fewer people are vying for its use.
Deputy Paul J. Connaughton: How many users are subscribed to the service as of now?
Mr. Aidan Dunning: It is 40,000 plus.
Deputy Paul J. Connaughton: Are they all houses in areas in which no broadband could be received, or are they in areas where people could have received another type of broadband?
Mr. Aidan Dunning: It is a mix. When we came to selecting electoral districts, we examined it down to that level. We did a big job in terms of talking to service providers to find out what level of broadband was available. In some cases - in quite a number of cases, I would imagine - there were alternative broadband providers available in parts of the electoral districts.
Deputy Paul J. Connaughton: Among the 40,000 subscribers, are there many who could obtain another service provider?
Mr. Aidan Dunning: This happened in 2008, and there have been developments, obviously, since then. Other service providers may have moved into NBS areas, as they are entitled to. Eircom may have enabled more exchanges in an area, or other mobile operators could have moved in. There is more competition in the NBS area now, and that is probably a factor - although we cannot be certain - in the fact that the numbers are lower than we would have thought.
Deputy Paul J. Connaughton: Do we have a figure for that?
Mr. Aidan Dunning: Of the 40,000

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Deputy Paul J. Connaughton: Of the 40,000 who are in the NBS at the moment, how many have access to another service provider or have moved from another service provider to the NBS?
Mr. Aidan Dunning: The vast majority of them, I imagine, have access to another service provider. As I mentioned, the 3 offer under the NBS is quite a competitive one, as I understand it, in terms of price and quality. It is a matter for individuals, but there will be more and more alternative service providers. I am sorry I do not have details, down to that level, of what service providers are in each district electoral division.
Deputy Paul J. Connaughton: Would it be possible to get such details?
Mr. Aidan Dunning: ComReg produces information, but only at a county level, I am afraid. It does not go down to electoral district.
Deputy Paul J. Connaughton: What I am trying to get across is this. The company, 3, set a target. The number at the moment is 40,000, and within that total there are people who were previously with another service provider. Would I be right in saying that not only will 3 not hit its own target, but it is a million miles off it? Its job was to supply broadband to people who had no other access to broadband.
Mr. Aidan Dunning: No. Its job was to ensure the provision of a broadband infrastructure.
Deputy Paul J. Connaughton: For people who could not obtain broadband.
Mr. Aidan Dunning: To provide infrastructure in the area. It was then up to people to decide whether they wanted to avail of the broadband facility. Our job was to ensure that in these 1,000-plus electoral districts where broadband had not previously been available, services were made available through this scheme. We cannot then force people to subscribe to the broadband. It is a matter for individuals.
Deputy Paul J. Connaughton: I accept that, but the point I am trying to get across is that the initial idea for the project was that 3 was going to go into areas of this country where people could not receive broadband and supply it, where possible.
Mr. Aidan Dunning: Yes, and it has done that.
Deputy Paul J. Connaughton: Yes, but it has also gone into areas in which there was already a service provider. What I would like to know is how many of those 40,000 could never receive broadband before, and how many of them could, but changed to the NBS?
Mr. Aidan Dunning: RedC does periodic surveys of customer satisfaction in the electoral districts. It has quoted a statistic that around 50% of NBS customers have switched from another service provider, but that is based on a survey of 300 people, so I have my doubts.
Deputy Paul J. Connaughton: I respect that, and I understand it cannot be an exact figure, but if we were to extrapolate from it, we would find that the NBS has provided broadband to only 20,000 customers who do not have an alternative provider.
Mr. Aidan Dunning: Well

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Deputy Paul J. Connaughton: Are we getting value for money with regard to the €80 million that will have been spent on this, in terms of the number of people the contract was initially set up for? Does Mr. Dunning believe we are getting value for money?
Mr. Aiden Dunning: We did not set a target in the contract for the number of persons who would take it up. Our job, as mandated by the Government, was to put in place an infrastructure in that area for people who did not have access to broadband. There were already broadband operators in some of these ED areas. The infrastructure has been put in place and it will be possible to scale it up. It is robust and strong. When the spectrum to which I referred earlier may be released on foot of the auction this may be of great use in this area in making higher speed broadband available. For a net cost to the Exchequer of €43 million, we have put in place an infrastructure that ensures broadband access to 230,000 premises in more than 1,000 ED areas. That is a pretty good outcome.
Deputy Paul J. Connaughton: I understand the 3 network set the figure when it was rolling out the service. However, the point I am trying to get across is the 3 network supplied that figure in its bid and we can agree it will not hit that figure. I want to know about the other companies which applied for this tender. Had they set a figure around that level or did they present much lower figures which were more acceptable?
Mr. Aidan Dunning: My understanding is that it was primarily about what they could do about coverage and whether the system would provide the coverage necessary to ensure that the whole of the ED area had access as distinct from the target numbers.
Deputy Paul J. Connaughton: Of the €18 million expenditure, the Department will recoup about €36 million.
Mr. Aidan Dunning: Some €36 million from the

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Deputy Paul J. Connaughton: What has to be done to recoup that?
Mr. Aidan Dunning: The scheme is up and running. We have submitted claims in respect of the €72 million that has been expended already and we have recouped €30 million.
Deputy Paul J. Connaughton: So there will be no issue with recouping the rest of it.
Mr. Aidan Dunning: We do not think so. However, how the EU operates as regards the structural funds means we have to go through a lot of hoops to ensure that everything is done but the Department will make sure this is the case. I am confident because we did this with regard to the MANs. We have a good record on the telecomms side in terms of recouping EU co-funded moneys. I would expect the same to obtain on this occasion.
Deputy Paul J. Connaughton: What is the plan post-2014?
Mr. Aidan Dunning: The contract ends in August 2014. We had a major job to convince the EU to agree to allow us to run it out to 2014 because the EU wanted it to be a shorter period. It is the view of the EU to question whether the market can provide this service and we were of the view that it could not. By 2014, a very robust and strong infrastructure will have been put in place by the 3 network. I understand that the 3 network has a strong commitment to the country and to investment in this country. In my view, mobile broadband will be playing a very important role in that segment of the population in rural areas, a forecast of 15% to 20%. I would be very hopeful that the investment will remain in place and will still be utilised. In any event, the national broadband plan which the Minister has indicated will be brought to Government and published later this year, hopefully, will certainly address that issue. It was made clear in the task force report, notwithstanding what has been achieved in this scheme, that a total of plus 15% of the population broadband needs will not be met through market interventions at the level we require. This issue will be addressed in the broadband plan. I envisage that this infrastructure will continue to have a role to play post-2014 but we will not be

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Deputy Paul J. Connaughton: Post-2014, the 40,000 on the scheme at present will not be left high and dry.
Mr. Aidan Dunning: No. I would not think so.

oscarBravo

Five to one contention on a mobile network. I'm glad I didn't have a mouthful of tea when I read that.

watty

Well, any more than 5 people on one sector the performance is rubbish

No mention that Three didn't and can't provide Broadband and that the accepted proposal from Three didn't meet original spec.
Or that the Satellite proposal offered by Three didn't actually exist at the time.
Or that Three had to add this number of extra masts anyway... as they were already in breach of 3G rollout terms of their licence.

The NBS is a failure and waste of taxpayer money. Not one Broadband connection.

PCPhoto

watty wrote: »

Well, any more than 5 people on one sector the performance is rubbish

No mention that Three didn't and can't provide Broadband and that the accepted proposal from Three didn't meet original spec.
Or that the Satellite proposal offered by Three didn't actually exist at the time.
Or that Three had to add this number of extra masts anyway... as they were already in breach of 3G rollout terms of their licence.

The NBS is a failure and waste of taxpayer money. Not one Broadband connection.

FYP

in fairness his arguementis pretty weak - three were to provide the infrastructure for broadband ... which they did ....FAIL !

watty

For a net cost to the Exchequer of €43 million, we have put in place an infrastructure that ensures broadband access to 230,000 premises in more than 1,000 ED areas. That is a pretty good outcome.

No, there is Zero Broadband infrastructure other than backhaul on masts.

Since a Mast has usually 3 sectors to achieve 5:1 contention you would need

40,000

40,000 / 15 = 2,700 ADDITIONAL masts NEEDED to be dedicated to NBS data (no voice. In practice the masts are used for regular Three Voice)

Then assuming peak 21Mbps per sector, the average speed per user would be about 3Mbps or less assuming only 1/5th or less users actually connect at peak times, depending on cell size. If all users on a sector connect, with 2,700 masts the speed is only about 500Kbps (0.5Mbps).

I believe less than 200 Masts were added (170?) which would be a contention of about 67 :1 But 3G statistics are not as simple as DSL, Cable and Fixed Wireless. With a very small variation of take up contention can vary from 5:1 to 1000:1. The clue is in the name, Mobile. Contention can't easily be controlled or predicted as the capacity per sector is so tiny! So contention is controlled by tiny data transfer caps.

It's not always on as Broadband is. It's a form of Mobile Wireless Dial up, connect on demand only!

Why is this misinformation allowed to continue. Can we complain to EU that the money is misappropriated and has subsidised one 3G operators Mobile Voice Roll out to meet their licence obligations?

nigelhanlon

Three have never met the minimum specifications outlined in the NBS contract and reading this utter crap and misinformation fills me with rage. Our village is stuck on the NBS and I am lucky to load the Google home page at times. How the hell do they get away with saying they have hit targets?

Who do we complain to about this gross misconduct?

bealtine

nigelhanlon wrote: »

Three have never met the minimum specifications outlined in the NBS contract and reading this utter crap and misinformation fills me with rage. Our village is stuck on the NBS and I am lucky to load the Google home page at times. How the hell do they get away with saying they have hit targets?

Who do we complain to about this gross misconduct?

IrelandOffline have complained bitterly about this nonsense for years.
I suppose the only place to take it to is the EU but even the EU believe the marketing spin of the mobile companies so it's a hard call to educate them as to the realities of mobile midband