EU creates a €500m fund dedicated to broadband infrastructure
(Image Credit: iStockPhoto/kosmozoo)
The European Commission has announced the creation of a €500m fund dedicated to keeping Europe's broadband infrastructure competitive on the world stage – with initial funding coming from the EIB (European Investment Bank) and three National Promotional Banks and Institutions (NPBIs)
Günther H. Oettinger, EC Commissioner for Digital Economy and Society, said: “I am grateful to our financial partners for the establishment of this broadband Fund. It is an important development for smart and efficient funding of broadband projects, especially in underserved areas, in line with the spirit and the letter of the Investment Plan. It is a great step towards a European Gigabit Society for all.”
A current EU initiative known as the Digital Agenda for Europe is ongoing with the aim of ensuring homes around the continent have access to at least a 30Mbps "superfast" broadband connection by 2020. The new Connecting Europe Broadband Fund (CEBF) advances this ambition to a 100Mbps connection for all by 2025.
Despite the UK's vote to leave the EU, it remains a full member until two years after the Article 50 leave process is triggered. The UK is set to achieve the Digital Agenda for Europe objective of 30Mbps connections for all citizens before the 2020 deadline; although several other European neighbours are expected to miss the goal.
The eventual target is for "gigabit cities" with businesses and the public sector expected to benefit from 1Gbps+ connections by 2025 while standard consumer households should expect a minimum of 100Mbps. The UK is missing from this new proposal as it will likely have completed its EU divorce by then and will not have to contribute towards or benefit from it.
In the Autumn Statement last year, the UK government pledged £400 million towards its own Digital Infrastructure Investment Fund which is expected to be worth upwards of £1.5bn once private investment gets underway.
An estimated €500 billion is required in order to fund the EU's planned infrastructure upgrades. Most of this investment will "largely have to come from private sources" and the EU believes "there is likely to be a €155bn investment shortfall."
€500 million is barely a dent in the €500 billion the EU estimates is required to meet its broadband objectives, but it's a start. The rest will need to come from member states and private investment from companies.
Werner Hoyer, EIB President, said: “Until today, smaller-scale broadband projects did not have easy access to funding and EU financial instruments did not exist. Consequently, projects in less populated or rural areas, where purely private-led initiatives may not see the economic benefits of deploying broadband networks, were difficult to implement.”
The initial €500 million is being funded through an agreement between the European Commission, the European Investment Bank (EIB), and three NPBIs (National Promotional Banks and Institutions.) Just €100 million will come from the Commission's dedicated Connecting Europe Facility (CEF) after it was hit by significant budget cuts three years ago in 2013.
What are your thoughts on the EU's broadband fund announcement? Let us know in the comments.
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