Whether the Department was justified in refusing access to two reports associated with the National Broadband Plan
5 August 2021
Background
In a two-part request dated 8 April 2020, the applicant sought access to the following reports associated with the National Broadband Plan (NBP):
- the National Broadband Intervention Strategy (NBIS) Model Specification Document prepared by KMPG (referred to by the applicant in his original request as ‘the financial appraisal specification report’)(record 1); and
- the National Broadband Intervention Strategy (NBIS) Cost Modelling report prepared by Analysys Mason (record 2).
On 13 May 2020, the Department issued its decision. It granted partial access to record 1 with certain information redacted under sections 30(1)(c), 35(1)(a), 36(1)(b) and 36(1)(c) of the FOI Act. It refused access to record 2 under sections 29(1), 30(1)(c), 35(1)(a) and 36(1)(b) of the Act. The applicant sought an internal review of that decision, following which the Department affirmed its original decision.
On 11 June 2020, the applicant sought a review by this Office of the Department’s decision. During the course of the review, the Department granted partial access to record 2. It refused access to parts of the record under sections 29(1), 30(1)(c), 35(1)(a), 36(1)(b) and 36(1)(c).
I have now completed my review in accordance with section 22(2) of the FOI Act. In carrying out my review, I have had regard to the submissions made by the applicant in his application for review and to the submissions made by the Department in support of its decision. I have also had regard to the contents of the records concerned. During the review process, the Investigator consulted relevant third parties and I have also taken their submissions into account. I have decided to conclude this review by way of a formal, binding decision.
Scope of the Review
As part of its submissions to this Office, the Department indicated that it was no longer seeking to withhold the information redacted from section 5.3.2 on pages 24 & 25 of record 2. As such, that redaction is no longer within the scope of this review. If the Department has not already released that information, it should do so without further delay.
The scope of this review is concerned solely with whether the Department was justified in refusing access to the redacted parts of the two records sought, under sections 29, 30, 35, 36 and 37 of the FOI Act.
Preliminary Matters
Before I address the substantive issues arising, I would like to make a number of preliminary comments. First, section 22(12)(b) of the FOI Act provides that a decision to refuse to grant an FOI request shall be presumed not to have been justified unless the FOI body shows to my satisfaction that its decision was justified.
Secondly, it is important to note that a review decision by this Office is by way of a hearing de novo in the light of the facts and circumstances applying at the date of the review by this Office, rather than by reference to the facts and circumstances that applied at an earlier date.
Thirdly, although I am obliged to give reasons for my decision, section 25(3) requires all reasonable precautions to be taken in the course of a review to prevent disclosure of information contained in an exempt record. It follows that the description I can give of the material at issue is limited.
Finally, the release of a record under the FOI Act is understood, effectively, to be equivalent to its release to the world at large, given that the Act places no constraints on the uses to which a record released under the Act may be put.
Analysis and Findings
A contract was signed with National Broadband Ireland (NBI) in November 2019 to implement the Government’s plan to roll-out high-speed broadband to the 1.1 million people living and working in the nearly 540,000 premises where commercial operators were not committed to delivering the service. It is expected that this will ensure that one quarter of the country, mostly living in rural Ireland, can access high-speed broadband.
In its submission to this Office, the Department indicated that in order to assess the case for NBP state intervention in areas in Ireland where high-speed broadband had not been provided by the market to-date, financial appraisal and cost benefit analysis were undertaken. The two reports at issue in this case formed part of this process.
The Department argued that the redacted information in the reports provides details of positions taken in the NBP procurement process with regard to cost modelling assumptions and analysis and as well as ongoing positions to be taken regarding cost analysis in the implementation of the NBP over the next 25 years. In particular, the Department indicated that record 2, the Analysys Mason report, includes detailed analysis under different technology scenarios, including cost modelling assumptions and different network design assumptions, to help assess the case for the NBP. It argued that some of the information which has been redacted relates to expert assumptions made by Analysys Mason and incorporates their own intellectual property as it involves their knowledge of the sector and more specifically other markets where they have experience of fixed wireless networks.
The Department further argued that the records contain data around the eir network, pole and duct pricing and inflation. In particular, the Department argued that record 2 contains data gathered by Analysys Mason from other fixed and mobile operators in Ireland and internationally to inform their modelling advice. The Department indicated that eir and other operators that provided information to Analysys Mason would likely object to their commercially sensitive network information given in confidence being published especially when not already published by the Commission for Communications Regulation (Comreg). It argued that disclosure of this information would likely discourage eir and other commercial companies from providing important information to the Department in the future which could hamper the future communications and engagement of the Department with relevant commercial companies.
Finally, the Department argued that the redacted parts of the relevant records contain financial, technical and commercial information relating to a third party, National Broadband Ireland (NBI), including significant technical data on their network cost models and benchmarking information relating to Ireland and elsewhere that is highly commercially sensitive to the third party in relation to ongoing procurement negotiations. It also argued that although the records were prepared in 2015/16 they are still considered confidential and commercially sensitive and the disclosure of the information could interfere with ongoing procurement by NBI. It argued that this is particularly the case as NBI are required to tender for labour and materials each year during the seven years of the NBP deployment.
In his submission to this Office the applicant argued that the records in this case date from 2015 and early 2016 and do not take account of the subsequent changes to the intervention area and as such could not interfere with the implementation of the NBP. In addition, he argued that the fact that the NBP contract has been signed and operations have commenced further supports his argument that release of the records would not jeopardise the implementation of the NBP.
The applicant argued that the NBP is a bespoke once-off project that will never be procured again and therefore it is not correct to say that release of the relevant information would jeopardise current or future negotiations with commercial third parties and the Department’s ability to gain the best outcome for the State. In particular, he argued that information relates to hypothetical network design and funding scenarios that do not reflect all of the design and cost changes which occurred during the subsequent procurement process when eir removed premises from the intervention area and NBI finalised its network design for the remaining premises in the intervention area.
In addition, the applicant argued that the records do not contain any information on the winning bidders costs, revenues, etc. since these would have been negotiated in the final phase of the procurement process before financial close was reached.
Given the nature of the submissions made, I consider section 36 to be the most relevant exemption in this case. As such, I propose to examine that section first.
Section 36
The Department has refused access to parts of both records under sections 36(1)(b) and 36(1)(c).
Section 36(1)(b) provides for the refusal of a request if the record sought contains financial, commercial, scientific or technical or other information whose disclosure could reasonably be expected to result in a material financial loss or gain to the person to whom the information relates, or could prejudice the competitive position of that person in the conduct of his or her profession or business or otherwise in his or her occupation.
The essence of the test in section 36(1)(b) is not the nature of the information but the nature of the harm which might be occasioned by its release. The harm test in the first part of subsection (1)(b) is that disclosure of the information could reasonably be expected to result in material financial loss or gain. The test to be applied is whether the decision maker's expectation of the identified harm arising is reasonable. The harm test in the second part of subsection (1)(b) is whether disclosure of the information "could prejudice the competitive position" of the person concerned. The standard of proof necessary to meet this test is considerably lower than the standard to meet the test of "could reasonably be expected to" in the first part of subsection 36(1)(b).
Section 36(1)(c) provides that an FOI body shall refuse to grant an FOI request if the record concerned contains information whose disclosure could prejudice the conduct or outcome of contractual or other negotiations of the person to whom the information relates. The standard of proof required to meet section 36(1)(c) is relatively low in the sense that the test is not whether prejudice or harm is certain to materialise but whether it might do so. Having said that, the Commissioner expects that a person seeking to rely on section 36(1)(c) would be able to show that contractual or other negotiations were in train or were reasonably foreseen which might be affected by the disclosure and explain how exactly the disclosure could prejudice the conduct or the outcome of such negotiations.
Section 36(1) does not apply if the public interest would, on balance, be better served by granting rather than refusing the request (section 36(3) refers).
During the review process, the Investigator obtained submissions from Analysys Mason and National Broadband Ireland (NBI). KPMG was also invited to make submissions but did not choose to do so.
In its submission to this Office, NBI argued that both records contain information which could prejudice ongoing negotiations between NBI and its suppliers and thereby negatively affect NBI’s own commercial position. It argued that information in the reports, if released, could result in commercial harm, as the assumptions and inputs in both reports now relate to the real technical and financial position of NBI. In particular, NBI argued that disclosure of this information would most certainly be used by the various sub-contractors that NBI relies upon or will reply upon to leverage higher prices, more favourable contractual terms or increased volume.
With regard to record 1, NBI indicated that this was created to provide the Department with granular detail on all aspects of the NBP to allow the Department to appraise the NBP. As part of this, information relating to operating costs, potential depreciation of assets, construction costs, tax treatment and financial projections for each funding model was included in this document. In addition, NBI argued that record 1 identifies future market opportunities and addresses levels of revenue expected from such services. It argued that potential product developments to address market opportunities are normally considered confidential and commercially sensitive and providing advance notice of such services to competitors could harm NBI’s ability to deliver its business plan.
In addition, NBI argued that the sub-contracts for the various services that comprise the delivery and maintenance of the NBI operate in a highly competitive market. It argued that the level of competition in the market for sub-contracts will ultimately be reduced and consequently adversely impacted through the disclosure of the detail in the records, which sub-contractors and bidders for services can use to tailor pricing to specific equipment or volumes.
NBI also argued that while the information in the two reports is relatively old, there is an inherent competitive advantage in knowing the plans of competitors in a market such as energy generation, where planning and regulatory frameworks can contribute to long lead-in times for projects. In this case, NBI argued that sub-contractors to NBI would be at a significant advantage not only knowing the detail of equipment and technical specifications set out in the records but also the roadmap for next few years, particularly in the deployment period.
Finally, NBI argued that there is already considerable information in the public domain with regard to the background and cost of the NBP. It argued that the disclosure of additional specifications and costings set out in the records would be contrary to the public interest as it would not increase the public’s understanding of the overall public expenditure but would negatively impact on NBI’s ability to negotiate competitively with current and future contractors.
In its submission, Analysys Mason argued that its report, record 2, contains a number of different types of information which are commercially sensitive. It argued that the information relating to unit cost estimates is commercially sensitive as NBI is currently procuring materials and contractors to build the network and if the expected unit cost estimates were to be publically available it may impact the market response. It also argued that procurement is carried out on a deployment area basis and will continue for up to seven years until all 227 deployment areas are constructed and the publication of the unit costs used in the report could result in a higher subsidy being paid to build the network.
Furthermore, Analysys Mason argued that there is confidential information in record 2 on eir’s network which is commercially sensitive and was used as part of its analysis in the report on the basis it was confidential. It argued that when preparing the report it received confidential information from Comreg including models which form the basis of regulation. It indicated that this information is not in the public domain and was provided to assist Analysys Mason in their own analysis on the basis it was confidential. It said the model is used by ComReg to support its analysis and regulation of the market and it is not in the public interest that ComReg’s information is made available to the operators being regulated or to their competitors.
Having carefully considered the matter I accept that the withheld information in both records falls within section 36. While accepting that this information dates back a number of years, I also accept that release of this information could be used by sub-contractors and suppliers in a manner which would cause commercial harm to NBI and other commercial entities. In particular, having regard to the content of the withheld information and the third party submissions, I am satisfied that disclosing the information to the world at large could prejudice NBI’s competitive position, as it would not otherwise be available to competitors, who could use it to their advantage. I am also satisfied that disclosure could provide insights to others which could prejudice the competitiveness of NBI in negotiations with suppliers and therefore the conduct and outcome of such negotiations could be prejudiced as far as NBI is concerned. In addition, I am satisfied that the records contain commercially sensitive information relation to eir and other commercial entities. I therefore find that sections 36(1)(b) and 36(1)(c) apply to the withheld information.
Section 36(2) provides for the release of information to which section 36(1)(b) is found to apply in certain circumstances. I am satisfied that none of the circumstances identified at section 36(2) arise in this case.
Under section 36(3), I must also consider whether, on balance, the public interest would be better served by granting than by refusing the information in question.
In relation to the public interest test contained in section 36(3), I wish to emphasise that in carrying out any review, this Office has regard to the general principles of openness and transparency set out in section 11(3) of the FOI Act. In sum, section 11(3) recognises the need to enhance public scrutiny and accountability of government and public affairs, particularly the activities and decision making of FOI bodies.
However, in a judgment delivered on 25 September 2020 (The Minister for Communications, Energy and Natural Resources and the Information Commissioner & Ors, available on our website), the Supreme Court held that general principles of openness and transparency do not provide a sufficient basis for directing the release of otherwise exempt information in the public interest. Rather, a “sufficiently specific, cogent and fact-based reason” is required “to tip the balance in favour of disclosure”.
Moreover, while the Court stated that the public interest balancing test involves a “weighing of the respective private and public interests in the analysis of the records in issue”, it did not disturb the guidance that it previously gave in The Governors and Guardians of the Hospital for the Relief of Poor Lying-In Women v. the Information Commissioner [2011] IESC 26 ("the Rotunda Hospital case") in which it drew a distinction between private and public interests. Relevant private interests are those that are recognised by law and, in particular, through the protection afforded by the exemption provisions.
I therefore consider that I am required to identify a specific public interest, identifiable following an analysis of relevant records in this case, which is sufficiently strong as to outweigh the interests of commercial sensitivity.
I agree with the applicant that the NBP is an important piece of national infrastructure and there is a significant public interest in transparency around this. However, having reviewed the records in this case, I cannot identify a specific public interest therein which would outweigh the public interest in entities being able to carry out their business without fear of suffering commercially. I consider that the appropriate balance has been struck by the release of the majority of both reports and that the public interest would be better served by refusing the request for the remaining withheld information.
I consider that the release of the majority of both reports to the applicant reveals to a large extent the information and analysis available to the Department to support its decision-making in relation to the NBP. I find that the Department was justified in refusing access to the withheld information under sections 36(1)(b) and 36(1)(c) of the FOI Act.
Given this finding, I am not required to consider the exemptions claimed under sections 29, 30(1)(c) or 35(1)(a) of the FOI Act.
Decision
Having carried out a review under section 22(2) of the FOI Act, I hereby affirm the Department’s decision. I find it was justified in refusing access to parts of the two records on the basis of sections 36(1)(b) and 36(1)(c) of the FOI Act.
Right of Appeal
Section 24 of the FOI Act sets out detailed provisions for an appeal to the High Court by a party to a review, or any other person affected by the decision. In summary, such an appeal, normally on a point of law, must be initiated not later than four weeks after notice of the decision was given to the person bringing the appeal.
Stephen Rafferty
Senior Investigator