Making the case for European broadband

Neelie Kroes, the vice president of the European Commission and the European Commissioner for Digital Agenda has once again been banging the broadband drum.

Speaking at the ETNO conference in Brussels, Kroes called on the EU to support for a proposal that would provide an investment of 1 billion euros per year from the EU in the Digital Connecting Europe Facility. The CEF was proposed last year and would provide 50 billion euros of investment to improve transport, energy and digital broadband infrastructure in Europe. Of this, 9.2 billion euros would be reserved for investment in fast broadband networks and pan-European digital services and this would effectively mean 45 million extra houses having access to fast broadband (at a minimum of 30Mbps)

Kroes points out that we need this investment in upgrade European networks—as internet use doubles every two to three years, current connections will be creaking at the seams if they are not upgraded soon, and that requires investment to solve. Kroes is also looking for networks to reach more isolated areas, as coverage needs to be widespread for it to truly boost economies and raise the quality of living for all.

Kroes believes though the EU loans will not simply to donations from the EU purse, but that by, “using the leverage effect of financial instruments, every cent of that EU budget money works around 7 times harder. So every country in the EU will get back more than they put in.”

It’s hard to argue that that it sounds like a good deal.

The hope is that the 9.2 billion in loans from the EU could trigger up to 50 billion euros in spending as third-parties look to tap it to potential growth. What’s more, Kroes argues that investing in the Connecting Europe Facility will enable the EU to both boost growth and make public sector savings—at the same time. Moving services online and creating eProcurement could, according to Kroes, save 100 billion euros a year. Additionally, investment in fast broadband could enable the effective use of cloud services, smart grids and smart cities, which again could improve lives on a day-to-day basis.

The challenge is that there’s no guarantee that the loans will trigger that further investment or whether that will be enough to ensure that remote areas will get broadband to their door. Another issue is that to get this proposal through, Kroes will be meeting leading operators such as Telefonica, Deutsche Telekom, TeliaSonera, Orange, BT and Telecom Italia to lobby for their support. Kroes’ recent activity in the EU to limit operator profits by capping roaming charges may not have won her many friends in those boardrooms so getting them to back the Connecting Europe Facility proposal may not as easy as it otherwise might have been.

We hope to hear more from Neelie Kroes at the Broadband World Forum in mid-October, where she will be addressing the many challenges of developing fast broadband in Europe in her opening keynote speech.

Neelie Kroes, European Commissioner for Digital Agenda is giving the opening day keynote address at the Broadband World Forum, taking place IN JUST TWO WEEKS on 16th-18th October, at the RAI Exhibition and Convention Centre, Amsterdam. There’s still time to register your interest HERE.

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