EU budget cuts to fragment European FTTH landscape
As if there weren’t enough items on the agenda, attendees at next week’s FTTH Council Europe FTTH Conference suddenly have something new to talk about: the likelihood that the European Union will not fund broadband infrastructure deployments over the next seven years (see "European Union slashes broadband funding").
The decision to reduce the items in Neelie Kroes’s toolkit over the next seven years to “a good scolding” not only diminishes her influence, but calls into question the will of Europe to extend broadband access to those not easily reached economically via current wireline technology. It particularly clouds the future of fiber to the home (FTTH) as the medium of choice for super-fast broadband in the region, since fiber-optic broadband networks represent the most expensive option available.
Assuming the Multiannual Financial Framework (MFF) remains as is (it still must be ratified by the European Parliament), the burden for meeting the Digital Agenda’s goals will fall squarely on each member-state. Given the varying levels of fiscal health among these countries, it seems likely that “broadband for all” may not be equally high on each country’s list of things to do.
The first consequence will be fewer new initiatives. The subsequent consequence in some cases will be funding shortfalls for existing initiatives.
Service providers therefore should expect to have more responsibility for meeting broadband goals thrust upon them. In turn, we can expect these service providers to whine even more loudly about government regulations as a disincentive to investment. Current programs will slow, and new ones will take longer to begin.
And with funding likely more difficult to scrape together until the regional economy improves significantly, we’re likely to see more emphasis on “economical” broadband approaches. That means more fiber to the cabinet and less fiber to the home. It may also mean increased reliance on mobile broadband approaches.
The European FTTH community knows what it’s up against. “By reducing the financial envelope down to €1 billion for telecommunications, there will be no room for the support of fibre infrastructure investments,” said FTTH Council Europe President Karin Ahl in response to the MFF.
“Now that the EU Member States have failed to realize the importance of the digital part of the Connecting Europe Facility, the role of the FTTH Council Europe on the investment and financing side will be even more important – and we are looking forward to face this challenge,” she concluded
The council had better be up for the challenge. The battle for fiber-based broadband in Europe just took a turn for the worse.