Government documents reveal cost of rural broadband could increase by a whopping 60%

The cost of rural broadband could rise by up to 60pc according to internal government documents.

 

Internal memos released under the Freedom Of Information Act show a feared National Broadband Plan price hike because of the government’s recent agreement with Eir to move 300,000 rural home and businesses out of the state’s 850,000-premise rollout intervention zone and into Eir’s own expedited rollout plans.

The rise in the scheme’s cost, which is already estimated to be over €500m, could come from Eir seeking fees from any winning bidder of the National Broadband Plan tender.

“The level of subsidy [that] bidders might seek for the reduced intervention area could increase by between 10pc and 15pc if an incremental cost is applied to infrastructure access, and by more than 60pc if the existing regulated price for pole and duct access is applied,” said the internal government memo setting out the government’s position.

“All three bidders have indicated that access to the new infrastructure built as part of the Eir 300,000 rural deployment, will be central to their bids. The cost to bidders of accessing this infrastructure in order to reach the Intervention Area is a critical factor that could significantly impact on the level of subsidy sought by bidders in the procurement process.”

The government wants Eir to charge a reduced price to this infrastructure while Eir insists that it is entitled to charge a market rate.

The increase in cost is likely to be absorbed by the taxpayer, as the government has promised that citizen access to state-subsidised rural broadband will not exceed average prices in urban areas.

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