Commission claws back up to €200 million broadband funding in budget breakthrough


This article is part of our special report Efficient EU budget 2014-2020.

SPECIAL REPORT / The EU executive hailed victory in winning back vital funding for its European broadband funding rollout programme following trilogue talks last week that saw up to €200 million in spending secured over the 2014-2020 budget period.

Under its digital strategy, the Commission wants Europeans to have access to fast broadband by 2013 and make sure at least 50% of households are able to subscribe to internet access above 100 megabits per second (mbps) by 2020.

To reach that goal, the Commission originally proposed a €50-billion "Connecting Europe Facility" (CEF) for cross-border infrastructure projects under the EU's 2014-2020 budget.

Of this, €9.2 billion was earmarked to expand broadband and digital networks, amid concerns Europe was falling behind Asia and the United States in the sector.

Original budget deal slashed

But a deal struck by European heads of states and government in February (see background) on the long-term budget saw broadband slashed by €8.2 billion to just €1 billion.

“It is clear that there can be no support for broadband with a pot of only €1 billion, so this funding will be exclusively for digital services,” Neelie Kroes, the EU commissioner for the digital agenda, said at the time describing the cut as “a missed opportunity.”

The Commission is now confident that the up to €200 million required to meet the 2020 digital broadband targets can be made available over the 2014-2020 multi-annual financial framework.

Last Friday (8 November), member states’ ambassadors approved an agreement reached between the Lithuanian EU Council Presidency, the European Parliament and the Commission in trilogue discussions earlier last week on an amended proposal for trans-European telecommunications regulations. 

Broadband to receive 15% of Connected Europe Facility

These regulations are part of the CEF and stipulate the funding of broadband networks, prioritizing projects on digital service infrastructures. The newly amended guidelines will take effect as of January 2014.

The negotiators reached agreement that the total amount of budget allocated to financial instruments for broadband will be 15% of the CEF, which would total between €150-200 million, according to current estimates.

Under the deal, a third of all the broadband projects financially supported by the Commission will be required to aim for speeds above 100 mbps.

A consultative expert group will be set up to oversee decision-making by the CEF Committee, to ensure that member states play an active role in pushing for super-fast broadband rollout.

Regional funding breakthrough for broadband

The Commission has already achieved another broadband funding fillip, when trilogies ending in October secured the listing of broadband as one of the four priorities – there were previously only three – for the spending of regional structural funds.

It is not yet clear how much of the regional structural funds could be allotted to broadband projects. Regional funds are grants offered for proposed projects, whereas the CEF will operate as a seed fund in which the EU offers a seventh of the total funding of a project, if external investors are willing to make up the difference.

Rimantas Sinkevi?ius, the Lithuanian minister of transport and communications, acknowledged that the deal took into account the severe slashing of the braodband budget within the CEF, agreed in February.

That decision led to a barrage of criticism from Kroes and industry sources.

Commission welcomes outlook after “grim” January decision

An industry source who preferred to remain anonymous told EURACTIV earlier this year that the result would add €70 billion to Europe's broadband bill, explaining that the €8- billion cut represented “seed money for loans that now can't happen”, leaving the private sector and member states to stump up the cash.

“It looked very grim in February but there is now a real prospect of super-fast broadband pilot projects getting finance. Plus there will be billions on offer for the right applications for regional funds. That is a new and positive development," said Ryan Heath, the spokesman for Kroes.

“If we can reach agreement on the Telecoms Single Market reforms, then the combination of all these actions will mean we can still reach our 2020 broadband targets," Heath added.

“The Fibre-To-The-Home (FTTH) Council Europe welcomes the changes regarding CEF broadband funds in the latest draft of the next EU budget. The specification that at least 1/3 of the broadband projects that are supported by CEF shall aim at speeds above 100 Mbit/s shows a clear focus towards fibre access networks. Admittedly the total amount of CEF funds for broadband has not changed. It can be seen as a small step forward that the new draft at least clarifies that 150 million EUR or more shall be used for broadband infrastructure. Still this is only a very small number and therefore the obligation for the member states remains to define appropriate national broadband plans and to ensure proper financing. We would welcome to also see the specific focus on speeds ABOVE 100 Mbit/s in those national plans,” said Hartwig Tauber, director general of FTTH Council Europe, an industry organisation with a mission to accelerate the availability of fibre-based, ultra-high-speed access networks to consumers and businesses.

 “This initiative is anchored in the Europe 2020 Strategy for smart, sustainable and inclusive growth, which put digital infrastructures at the forefront as part of the flagship initiative "Digital Agenda for Europe", thus it contributes to the completion of the Digital Single Market in the EU  and will be beneficial for all EU citizens,” said Rimantas Sinkevi?ius, the Lithuanian minister of transport and communications.

At a summit on 8 February, EU leaders reached agreement on a €960 billion long-term budget for 2014-2020, representing the first net reduction to the EU budget in history.

On 27 June, hours before the beginning of the EU summit, the three institutional top officials announced what appears to be a final compromise

Lawmakers have approved a compromise struck on 4 July on the multi-annual financial framework, the EU's budget for 2014-2020.

The European Parliament and the EU Council are currently entangled in a dispute over the budget for 2014. The European Parliament still has to hold a final vote on the long-term budget for 2014-2020, the multi-annual financial framework, on which a deal was struck over the summer.

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