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EU broadband fund may shrink in size
Wednesday 05 September 2012 15:09:48 by Andrew Ferguson

Many of the UK broadband plans are currently set to finish in 2015, and with goals that fall short of the 2020 goals set by the EU. From 2014 onwards the EU was in theory suppossed to be looking to fund broadband infrastructure projects across the EU to a total value of €9.2bn.

This money was actually part of a larger €50bn fund from the Connecting Europe Facility, that is intended to fund infrastructure projects to improve communications across Europe, both physical travel and the virtual travel over the Internet. The President of the EU has said the following on the fund:

"The Presidency retains that programmes under this sub-heading have a high potential to contribute to the fulfillment of the Europe 2020 Strategy; however, they will also have to contribute to the overall reduction. Whilst recognising the strategic importance of the Connecting Europe Facility (CEF), the Presidency notes that the telecommunications part has received less support by Member States than transport and energy and considers that the size and relative weight given to the three strands of the Connecting Europe Facility, as well as the scope of the proposed transfer of 10 billion euro from the Cohesion Fund, need to be reconsidered. Furthermore, efforts should be made to ensure broad access of participants from all Member States to the Horizon 2020 programme, without questioning the principle of excellence."

Extract from EU Presidency Issues Paper (our highlighting)

The message seems to be clear, that with more interest in traditional infrastructure projects, like road, rail and power that telecommunications might take a back seat, which is almost the reverse of previous attempts to provide regulatory certainty from the EU by Vice President Neelie Kroes'. Given the push/pull tactics that projects like HS2 and the BDUK funding in the UK have undergone, to see similar across Europe is perhaps no surprise.

Changes to the funding from Connecting Europe Facility, should not affect those projects that are applying for ERDF funding at this time, as that money is aimed at regeneration e.g. The Eden Project in Cornwall (£12.8 million), King's Dock redevelopment in Liverpool (£48 million) and the East Midlands Media Investment Fund (£6 million). Though if one funding stream is squeezed the competition for other sources may increase, and some projects may miss out after spending lots of time and money to produce a scheme that meets all the necessary criteria.

Mark Jackson over on ISPReview highlighted that originally the EU estimated it would need €270 billion to meet the 2020 broadband targets, but we would add that this figure still stands. Some work such as the BDUK and RCBF projects will reduce the UK part of this cost, but the massive original figure was based on an estimate of full fibre to the premises across the EU.

The Internet is still a relative young child, and like all children its growth is unpredictable and often not understood by those in power, this tends to go against it when trying to compete for funding against traditional bricks and mortar projects that have had their supporters for thousands of years.

Comments

Posted by mervl about 1 year ago
So you can't cut public expenditure and increase it at the same time. Surprise, surprise. And I'll defy anyone to show they fully understand the economic impacts of the internet: more claims than those wretched claim-farmers though, and I'll wager about as reliable.
Posted by EduardoSerra about 1 year ago
Telefónica and the telecom sector in general think that a reduction of the EU broadband fund would endanger the effectiveness of the facility as well as the European competitiveness and economic growth. Therefore, we fully support the maintenance of the €9.2bn proposal for this fund. We have commented on this at http://www.publicpolicy.telefonica.com/blogs/blog/2012/09/07/connecting-europe-facility-at-stake/
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