EU Supports €170m MAN Effort

Press release
10th Mar 2006

The EU’s decision to authorise the next phase of the Government’s €170m Metropolitan Area Network (MAN) programme to deploy fibre optic rings around 90 more Irish towns has received mixed reactions and questions over the tangible benefits MANs will deliver.

At least two parties have claimed that MANs are not the real solution to Ireland’s broadband woes and say the €170m could be put to better use.

Yesterday the European Commission authorised under EC Treaty state aid rules a programme to boost broadband availability in Ireland, which it admitted is lagging behind most EU15 member states in broadband penetration.

A recent Commission report showed that broadband penetration in Ireland stands at just 5.34pc, in comparison with best figures of 23.79pc in the Netherlands, 22.51pc in Denmark and 20.33pc in Finland.

The Irish Government will create open-access Metropolitan Area Networks in more than 120 Irish towns at a cost of €170m, with support from EU structural funds. The Commission concluded that the aid was not likely to distort competition within the EU significantly.

The management and exploitation of the networks, which remain in public ownership, will be tendered out to a wholesale operator. This wholesale operator will then offer its services to telecommunications companies, who will provide high-speed electronic communications services to end users. This funding is for Phases II and III of the MANs programme. Phase I, which is being managed by managed services entity e|net, has already been completed with networks built in 26 towns.

The decision was welcomed by the Minister for Communications, Marine and Natural Resources Noel Dempsey TD who said: “The Commission decision means that construction can get underway as soon as the works contracts are signed. By May of this year I expect works contractors to be onsite in counties Louth, Cavan, Monaghan, Mayo, Wicklow, Dublin, Meath and Galway. Construction of networks in the other counties will follow very shortly thereafter.

“The MANs benefit service providers and end users alike. Already they are introducing competition in the sector while growing the broadband market,” Minister Dempsey said.

Ironically, at least two different entities — national telecoms operator Eircom and lobby group IrelandOffline — have found themselves for once arguing from the same wing questioning the tangibility of investment in MANs, albeit with two completely different viewpoints.

Eircom commercial director David McRedmond told “We’re baffled as to why €170m of state aid is required in places where we already provide broadband. We provide it to 118 of the 120 towns listed for MANs. More than 85pc of lines in Ireland, bang on the European average, are connected to Eircom exchanges. The real deficit is the last 10 to 15pc of lines. It is not commercially viable for us to cover the last 10pc but the Government should do so because these areas can’t get broadband otherwise.

“We share the Government’s aims around broadband but we’ve done our job to get 85pc of lines connected — now they should change their plan and deal with where there is a deficit and where investment would be appropriate rather than duplicating existing assets,” McRedmond said.

The question over the tangibility of MANs was brought up earlier this week when the Oireachtas Joint Committee on Communications, Marine and Natural Resources presented its sixth report and criticised the Government for failing to implement any recommendations it fielded two years ago. At least five questions out of 35 put to the Government over the broadband debacle centred on the use and value of MANs.

Ireland Offline spokesman Damien Mulley commented: “MANs are quite pointless when local loop unbundling (LLU) is still broken and when the MANs aren’t automatically connected to any kind of backbone. MANs can only work and be value for money when we have an LLU system that works and a proper backbone infrastructure.

“It is quite disappointing that the Government claims spending this outrageous amount of money has done a lot of good when it can be seen by the OECD, EU and Oireachtas reports that the MANs so far have failed to deliver anything for the consumer,” Mulley said.

By John Kennedy, Silicon Republic