European Commission proposes €9 billion broadband investment program

The European Commission has put forward proposals that, when approved by the European Parliament and the EU's Council of Ministers, will see Europe spend almost €9.2 billion ($12.7 billion) from 2014 to 2020 on pan-European projects to give EU citizens and businesses access to high-speed broadband networks and the services that run on them.

The funding, part of the proposed €50 billion Connecting Europe Facility (CEF), would take the form of equity and debt instruments and grants. It is intended to complement private investment and public money at local, regional, and national levels, and EU structural or cohesion funds.

At least €7 billion would be available for investment in high-speed broadband infrastructure to consumers and small businesses. The money would be largely in the form of equity, debt, or guarantees. This would then attract capital market financing from investors, the Commission believes; the Commission and international financial institutions such as the European Investment Bank would absorb part of the risk and improve projects' credit rating.

The Commission says that this money could leverage a total of between €50 and €100 billion of public and private investment – i.e., a substantial proportion of the estimated €270 billion of broadband investment needed to meet the Digital Agenda targets on broadband. (The Digital Agenda 2020 targets are broadband access for all at speeds of at least 30 Mbps, with at least 50% of households subscribing to speeds above 100 Mbps.)

Projects are likely to be proposed by established telecoms operators as well as new players such as water, sewage, electricity utilities, or construction firms. Many projects are likely to involve several of these investors clubbing together. The Commission also expects public authorities to join projects as part of public-private partnerships.

The aim is to support investment in less obviously attractive broadband infrastructure projects, especially those outside urban or densely populated areas.

The Commission believes that access to CEF finance would speed up investment. It would also exert competitive pressure on telecommunications network companies to invest in their own networks.

The CEF would also provide financing for technical assistance or horizontal support such as mapping existing and future broadband networks.

The remaining funding for digital infrastructure would be used to support public interest digital service infrastructure such as electronic health records, electronic identification, and electronic procurement. The money would be used to promote pan-European interoperability and meet the costs of linking existing, often national, infrastructures and of running dedicated European-level components of digital service infrastructures.

The exact amount of funding available each year in the CEF to support both broadband and digital service infrastructure will be set out in Annual Work Programs.