European Union slashes broadband funding

In response to the region’s ongoing fiscal difficulties, officials of the European Union February 8 agreed to a Multiannual Financial Framework (MFF) for the years 2014 through 2020 that is approximately 80 billion euros smaller than the European Commission (EC) requested. About 10% of that savings will come from gutting the Connecting Europe Facility project that EC Vice President Neelie Kroes had hoped would fund broadband access network deployment.

The MFF for the next seven years calls for a “payment ceiling” of 908 billion euros. This compares to the 988 billion euros the EC had requested, and the 942 billion euro ceiling for the seven-year period that ends this year. This would represent the first time the EU’s budget has shrunk in the organization’s history.

The MFF still must be approved by the European Parliament. Should it pass, individual member-states would not receive direct assistance from the EC for their national broadband access development programs. The European Investment Bank might serve as an alternative source of funds.

Kroes wrote in a blog post February 9 that she was “of course disappointed” that the MFF contains only 1 billion euros for digital projects, rather than the 9.2 billion euros she and other commissioners had requested. “This still leaves room to invest in service infrastructure, in fields like eProcurement and eInvoicing, that can support a digital single market and ensure top-quality, 21st century public services for Europeans,” she wrote. “But this funding will have to be exclusively for digital services: because such a smaller sum does not leave room for investing in broadband networks.”

Karin Ahl, president of the FTTH Council Europe, echoed Kroes’s dissatisfaction. “The decision shows that there still is a lack of understanding of European Governments on the importance of future-proof broadband networks,” Ahl wrote in a press statement issued today. “Governments all over the world increase their efforts to ensure the availability of real broadband connections for their citizens. Therefore the European Union has just missed an important chance to make the right decision, not only for the years to come but also, and more importantly, for the future of a competitive Europe.”

Kroes noted that, despite the budget reduction, the EC’s goals for increased broadband coverage by 2020 remain in place. However, it would appear the EC will no longer be able to drive this process directly, leaving individual countries to reach the target numbers largely on their own.

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