No cash for broadband: Europe's super-fast future torpedoed by budget cuts

No cash for broadband: Europe's super-fast future torpedoed by budget cuts

Summary: 'No new broadband investment,' says Europe's digital chief - the market will have to do the legwork in expanding broadband coverage now. Still, at least there's some funding left for e-invoicing.

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TOPICS: Broadband, Fiber, Telcos, EU
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With negotiations over the EU's budget for the next seven years now concluded, the continent's broadband looks to have been the loser.

Discussions over the budget for the rest of the decade were wrapped up in Brussels on Friday, with the EU's member states agreeing a cut to Europe's 'payment ceiling' from €942.8bn in 2007-13 to €908.4bn in 2014-2020.

One of the areas to suffer as a result of the cut is Europe's broadband infrastructure. The initial budget proposed by the European Commission would have seen €7bn devoted to broadband networks and €1.2bn to digital services. The money would have come from a budget of €40bn destined for the Connecting Europe facility, a fund intended to foster "smart, sustainable and fully interconnected transport, energy and digital networks".

Under the budget now agreed by European leaders, that fund has now been cut to €29.3bn, with only €1bn to go on ICT and digital projects.

Europe's digital commissioner Neelie Kroes pronounced herself "disappointed" by the cut, and said that as a result of the reduced funding, the facility cannot now finance broadband projects.

"Such a smaller sum does not leave room for investing in broadband networks. I regret that: because broadband is essential for a digital single market, the rails on which all tomorrow's digital services will run; and this could have been an innovative and highly market-oriented way to deliver it, almost budget-neutral in the long run," Kroes said in a blog post on Saturday.

"Such a smaller sum does not leave room for investing in broadband networks. I regret that" — Neelie Kroes

The Commission has a stated goal of seeing at least half of Europe's population subscribing to broadband packages of 100Mbps and 30Mbps available to all by 2013 — and Kroes says it will still aim to meet that figure even without the fund.

"Those agreed objectives are now harder to reach, but we should stay focused on that goal... The Connecting Europe Facility was an important tool to move towards that goal, but not the only one," she said, adding the European Investment Bank's additional €10bn of capital, announced earlier this year, could be used to aid the financing of broadband projects.

The €1bn that remains for digital services from the Connecting Europe facility's funding will be used for "digital service infrastructure" like e-invoicing and e-procurement.

Topics: Broadband, Fiber, Telcos, EU

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9 comments
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  • Good news

    Governments, even pan-European should have no say in how Internet is developed. Funding broadband will surely remove many of the ISPs from business and create more bribing schemes. Finally, it is not even neccesary.

    De-regulate the telecom sector and broadband will be available everywhere. Cheap.
    danbi
    • Nope

      The days of universally available wired telephones or broadband have now gone, because it is privatised. Cable and Wireless did not run cables out to even small English towns as there was no money in it. They rewired big cities and of course places like the City of London - as there was a useful density of customers.

      If you live in Tongue (very north of Scotland) you get what was cabled by the nationalised Post Office and nothing more


      Not just the UK, go look at what hapenned in Germany, France and Sweden for example after the National Telcos were privatised or broken up.
      sonnet37
    • Good joke

      That's why, in the US, the telecoms didn't even branch out when the extent of government "intrusion" was giving them tax breaks with the idea of branching into those areas.

      Businesses don't just expand for the sake of it, some people will always get screwed when the only concern is money.
      Michael Alan Goff
  • Big mistake

    This decision will go down in history as the final nail in the coffin for the EU.

    Internet infrastructure is the single most important investment needed in order for Europe to benefit from the new digital economy. EU states, including the UK, will be unable to compete in a global market place in which most other nations are already far ahead of us in this field or otherswise planning huge upgrades.

    We cannot rely on the private sector to expand and improve essential national infrastructure. The private sector has consistently failed to supply high-speed broadband infrastructure to the majority of the UK, especially in rural areas -- for obvious reasons.

    Blogged: http://www.timacheson.com/Blog/2011/feb/uk_internet_infrastructure
    Tim Acheson
  • The government must now act

    Government action is now required, e.g. in the UK to force BT to allow Virgin Media and others to use their poles and trenches for infrastructure expansion.
    Tim Acheson
    • Hang on

      Why doesn't Virgin media sink its own cables? COLT and others have. Virgin came along my nice suburban street and put in cable (root pruning the trees as they went - we sued, they replaced) - which I could use if I wanted. In my flat in London I can hook up to three providers should I wish. So from where I sit I can use multiple broadbands

      So where are they going to run the cables? To the Upper Snodesbury in the Marsh type places? Let them - and incurr the cost of doing the heavy lifting themselves. But my reaction is - if you want twee villages you have to incurr the costs of living with ducks
      sonnet37
      • Prohibitive cost

        I asked that question to the man responsible for the company's infrastructure expansion globally. He was refreshingly candid and said it would not happen in his lifetime and probably ever, unless BT opens up their infrastructure (most of which consists of legacy poles and trenches which were funded by the tax-payer).

        Delivering the service to my neighbourhood, about 30 miles north of London in the heart of the Commuter Belt, would cost about £1million per meter due to the challenges of digging new trenches on other people's land when trenches and poles already exist -- plus the cost of an extra main hub station which each cost many millions. And that's in a rural area where it will take longer to recover the investment. So of course the private sector cannot and will not deliver all of the major infrastructure we need to compete in the new digital economy.
        Tim Acheson
  • I suppose

    this is the cost of austerity.
    Michael Alan Goff
  • Investment versus Bureaucracy and Waste

    I thought the cuts would be in bureaucracy, red tape, administration, waste and the gravy train etc. - not essential infrastructure which is an investment for the future and would provide a return on the investment to the benefit of all EU citizens.
    The Former Moley