EU proposes €9bn broadband fund

The European Commission has issued a proposal to spend almost 9.2 billion (8bn) from 2014 to 2020 on pan-European projects to give EU citizens and businesses access to super-fast broadband networks and services.

The funding, part of the proposed Connecting Europe Facility (CEF) investment plans, would take the form of both equity and debt instruments and grants, complementing private investment and public money at local, regional and national level as well as EU structural or cohesion funds.

We face problems in delivering new networks: insufficient investment, problems in accessing capital, and a weak business case for operators to roll out everywhere.

It calls for at least 7bn (6.1bn) to be made available for investment in high-speed broadband infrastructure, which the Commission said would add credibility and lower risk on projects that could in turn generate between 50bn and 100bn of public and private investment.

Neelie Kroes, vice president of the European Commission responsible for the Digital Agenda, wrote of the need for such investment in a blog posting.

"We face problems in delivering new networks: insufficient investment, problems in accessing capital, and a weak business case for operators to roll out everywhere. And we also face difficulty in making online public services available across Europe," she said.

The plans support Digital Agenda broadband targets, which call for 270bn of investment. The CEF plan, which was itself introduced yesterday, tables 50bn worth of EU investment funding to improve Europe's transport, energy and digital networks.

Its Digital Agenda sets 2020 targets of broadband access for all at speeds of at least 30Mbps, with at least 50 per cent of households subscribing to speeds above 100Mbps.

But its plans run contrary to previous policy, first outlined in 2007 by Kroes (who was then EU competition commissioner), which held that state aid alone could not bridge the digital divide.

The remaining CEF funding for digital infrastructure would support public interest digital service infrastructure such as e-ID, e-procurement, electronic health care records, e-justice and customs-related services.

The proposed funding is also accompanied by proposed new guidelines for trans-continental telecommunications networks and services to establish "new objectives, priorities, projects of common interest and criteria for identifying further projects of common interest," according to today's announcement.

It is also expected projects will involve not only established telecoms operators, but also new players such as water, sewage, electricity utilities, cooperative investment initiatives or construction firms working together in consortiums. It said they would also attract public-private partnerships and target poorly serviced rural areas.

The CEF finance would also exert competitive pressure on telecommunications network companies to invest in their own networks, the Commission argued. It would also provide financing for technical assistance or horizontal support such as mapping existing and future broadband networks.

The Commission's proposals will now be submitted to the European Parliament and the EU's Council of Ministers for adoption.