Explaining cost escalation on Ireland's national broadband plan: A path dependency perspective

Ireland's national broadband plan (NBP), announced in 2012, aimed to provide access to a minimum of 30 Mbps download speed to all households in the country ahead of the EU's Digital Agenda for Europe 2020 target for such speeds. The projected cost of the government subsidy was originally €...

Full description

Saved in:
Bibliographic Details
Published in:Telecommunications policy 2022-02, Vol.46 (1), p.102227, Article 102227
Main Authors: Healy, Gary, Palcic, Dónal, Reeves, Eoin
Format: Article
Language:English
Subjects:
Broadband
Broadband communication systems
Contracts
Costs
Density
Dependency
Escalation
Fibre
Fibre to the premises
Gap funding
Households
Intervention
Ireland
National broadband plan
Path dependence
Path dependency
Procurement
Public private partnership
Purchasing
Rural population
State aid
Subsidies
Technology
Telecommunications policy
Citations: Items that this one cites
Items that cite this one
Online Access:Get full text
Tags: Add Tag
No Tags, Be the first to tag this record!
Description
Summary:Ireland's national broadband plan (NBP), announced in 2012, aimed to provide access to a minimum of 30 Mbps download speed to all households in the country ahead of the EU's Digital Agenda for Europe 2020 target for such speeds. The projected cost of the government subsidy was originally €175 million. However, when the contract for the procurement of the NBP was eventually signed in 2019 the estimated subsidy had risen to between €2.2 and €2.9 billion. Using a path dependency framework, this paper finds that the escalation in the cost of subsidy was driven by two main factors. First, the decision to roll out fibre-to-the-premises (FTTP) technology was inconsistent with the geographic/legacy path dependencies related to Ireland's low-density rural population. Second, the gap-funding/PPP procurement model adopted for the intervention failed to attract competitive bids and was at odds with the competitive path dependency and the dominant role of the incumbent operator. •The estimated cost of subsidy for Ireland's NBP increased more than ten-fold between 2012 and 2019.•We examine the causes for this cost escalation using a path dependency framework.•Use of FTTP to connect all premises significantly increased the cost of the subsidy.•Procurement model used and absence of competition also increased the cost of subsidy.
ISSN:0308-5961
1879-3258
DOI:10.1016/j.telpol.2021.102227