Bryan Wall: Your Money And Your Broadband

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Top from left: Minister for Rural and Community Development Michael Ring, junior minister with special responsibility for rural digital development Seán Canney and Taoiseach Leo Varadkar at a press conference last week approving the next step for broadband in rural Ireland; Bryan Wall

One of the major myths of capitalism promoted by its supporters is that it encourages innovation. That the best battle it out to rise to the top of the economic system, profit, and become household names.

If that was the case then why the need for massive transfers of wealth to the private sector via the state? The reason for this is because the myth of capitalism is indeed not only a myth, but a fatal flaw in the system.

Its insatiable need for new markets and constant profit is a result of it struggling to survive. And in that struggle it has always found a willing assistant in the state. Hannah Arendt argued that the colonialist and imperialist expansion of the European powers was because of the requirements of capitalism. New markets and increased profit were needed. Therefore, the might of the state was to be used to ensure this.

The same pattern continues today. Capitalism is continuing the same search but in a world where most of the markets have been filled; there is nothing more to exploit. But, there is always the chance to return to habits of old and exploit the common people directly.

In Europe, and especially here in Ireland, banks seeking out more profit by being reckless and breaking the law had to be saved, i.e., bailed out, by the government in order to ensure their profit margins were not affected. Essentially, an upward transfer of wealth. Banks profit, developers have their debts wiped, and the general population is left with the bill.

And we see this played out again and again – history repeating itself as farce – with the cost of construction of the National Children’s Hospital reaching nearly €2 billion. The more profit the better, just as long as the right people and the right companies do the profiting.

Now we have the National Broadband Plan to contend with and yet another transfer of wealth for no other reason than the fact that a transfer of wealth has to happen.

Never mind questions about private meetings the now former Minister for Communications, Climate Action and Environment Denis Naughten had with the head of the then last remaining bidder on the broadband contract.

This is the same group which the government has decided to award the contract to. It’s also the same company who will own the broadband system once construction is complete and before they’ve even fronted most of the bill for it.

An article in The Sunday Times yesterday revealed that the company will be paying less than €200 million into the roughly €5 billion project.

As David McWilliams points out in the Irish Times, it appears that the investment they make will in part be funded by people paying their broadband bills.

So, the company pays little up front, the taxpayer via the government foots the bill, the government hands over the infrastructure to the company which then makes the larger share of its initial investment. And this investment is at least partially funded by the taxpayer directly via their bills. Death by a thousand deals.

We should be shocked. In a country with a functioning democracy and appropriate oversight the citizens would be shocked. Instead, we are resigned to the fact that this has happened before and will happen again.

The litany of controversies during the lifespan of our state has made us complacent; a case of having seen one controversy, seen them all. And given the scale of bank debt that was laden on us, a few billion for a national broadband network seems like small change by comparison. But we should be shocked and we should be angry.

We should be angry at a system that has been set up to reward private investors at the expense of everyone else.

We should be angry at a system that allows the health system in the country to slowly deteriorate so that it eventually be completely privatised.

This same system thought it appropriate that the average person on the street should shoulder some of the massive debt belonging to banks.

Welcome to neo-liberal Ireland; everything for them and nothing for ourselves. Dare to question the system directly and you’ll be dismissed as a naysayer. Try and take it on directly and you’ll feel the full assault of the government both physically and in the media.

Being part of the so-called sinister fringe should be seen as a badge of honour. It means that you believe that basic services that people rely on every day should be in the hands of the public.

They shouldn’t be in the hands individuals and companies whose ethical horizon extends only as far as their quarterly financial statements. The idea that there are certain things that shouldn’t be exploited for a profit and could – horror of horrors – be operated at a loss for the public good is completely alien to these same individuals.

And as much as services like water and health should remain in public hands, the national broadband network remain there too. Like it or not our societies rely on the internet for basic functions. The National Broadband Plan is akin to the rural electrification scheme.

Yet here we are. Our government is willing to hand it over to a private company. You could almost say determined given that it ignored the advice of Robert Watt. Watt, the secretary general of the Department of Public Expenditure, warnedagainst approval of the appointment of the preferred bidder”.

His argument was that it should not go ahead on the basis of affordability, risk, and the effect on other unrelated projects given the cost. He also took the step of saying the risk was “unprecedented”.

But it will go ahead. It has to. After all, a profit has to be made somewhere – just not by us.

Bryan Wall is an independent journalist based in Cork. His column usually appears here every Monday. Read more of Bryan’s work here and follow on Twitter:  @Bryan_Wall

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23 thoughts on “Bryan Wall: Your Money And Your Broadband

  1. Cian

    Bryan, if you believe that Broadband is an essential service that should be in public hands what is your proposal for the government to buy out the existing urban broadband?

    1. GiggidyGoo

      The main discussion is about the rural broadband – FG deflection tactic surfaces as usual Cian.
      He whose pockets must be filled must be kept happy. After all it’s all going belly up in the Philippines at the
      moment and we can’t be having a pauper created when there’s taxpayers money floating around.

      1. Cian

        Once again, I am totally against this broadband rollout. But don’t let facts get in your way.

        1. curmudgeon

          Cian you lost all credibility in this argument when you told me that mobile broadband infrastructure was as expensiveas wired, that planning permission wouldnt be granted for the cell towers and that broadband connections to houses was a better idea than to the device because houses dont move around.

  2. eoin

    Did anyone catch the RTE Saturday radio show at the weekend. Not only did Denis Naughten, the disgraced former communications minister whose meetings with the sole bidder brought about his downfall (his decision to allow the sole bidder to change the consortium which allowed Denis O’Brien’s Siteserv to creep in at the last minute wouldn’t have helped if he hadn’t been fired) appear, but there was a government junior minister who – and the podcast isn’t available yet so I can’t 100% check – said something along the lines of “we should believe the Indo tech journalist Adrian Weckler over the word of the secretary general at the Dept of public expenditure and reform”. Amazing stuff to sell what looks like a crackpot state contract. But then again, local elections are less than a fortnight away and embattled Denis O’Brien could do with some good news.

  3. The Boss

    This lad doesn’t know the basic differences between capitalism and communism.

    Capitalists invest their own money, time and innovation seeking to dominate a market.

    Communists steal your money to protect their own monopolies, destroying individual innovation in the process.

    Is a basic education too much for today’s “Independent Journalists”?

    1. pedeyw

      “This lad doesn’t know the basic differences between capitalism and communism.”
      Quite an ironic comment given your own “understanding” of the differences.

    2. Termagant

      What’s it called when you invest the state’s money in building something you’ll use to then make more money of the people of the state

      1. Cian

        In Ireland? Things like rural electrification? or universal free education?

        I dunno. what would you call these?

        1. curmudgeon

          ESB? What about the selling off of Eircom by FF, selling off of Bord Gais (FG), selling off Irelands water supply (not off the table – FG). And now The NBP

          Also Universal free education is getting a lot more expensive for the taxpayer considering the pay hikes and pensions within the education sector and the rise and rise of “registration fees” for 3rd level.

          1. Cian

            That wasn’t the question. The question was “What’s it called when you invest the state’s money in building something you’ll use to then make more money of the people of the state”

          2. SOQ

            I don’t think ‘selling off’ is in the main ideological reason, it’s just plain lazy- they have less to front end manage for the same salary/pension. Self interest- nothing more.

            More teeth and tits photo opportunities or if you are an independent in government- more opportunities to harass women going to mass next morning because they had 3 glasses of wine the night before.

            That a bunch of hungry profiteers can provide a better more cost effective service by arguing against over wielding Unions of thirty years ago is complete nonsense.

            The top level of Iarnród Éireann maybe a squandering mess but nothing compared to the ‘privatised’ GB rail system across the pond.

    3. Cian

      It isn’t black and white, capitalist/communist.
      The internet was invented/developed by the US Department of Defence, the first instances were military, the next tranche were universities. the web by Tim Berners-Lee in CERN. various encryptions technologies by NRA and state universities. Fibre optics were invented in universities.

      Do these innovations come under your capitalist or communist umbrella?

  4. Daisy Chainsaw

    €200million to get €3 billion. By anyone’s standards that’s a huge return on your investment. Redacted must be relieved he’ll have his fortune back.

  5. Ron

    Fianna Fáil says they cannot back the Government’s National Broadband Plan as it is now. It comes after Minister Michael Creed revealed that Granahan McCourt – the only bidder for the contract – will invest less than €200 million in the project.

    The rest of the three billion euro plan will be provided by the taxpayer.
    Fianna Fáil’s spokesperson on Public Expenditure and Offaly TD Barry Cowen says the plan as it is now, is a non-runner.

    It’s this simple, if the political sillies continue with this deal and Fianna Fail don’t back the SF motion and pull this charade of a Government down, then everyone needs to just accept the whole notion of politics in Ireland is a massive scam. It’s that simple. They either put up or shut up. nothing else is acceptable

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