Bad news day for broadband

ADSLdealsIt was bad news for broadband industry earlier this week at the EU voted to reduce its budget plans from an infrastructure investment of €50bn down to just €24b, with UK Prime Minister David Cameron one of the biggest pushers for the cut.

This means that the broadband fund that Digital Commissioner Neelie Kroes was pushing for at last year’s Broadband World Forum was essentially decimated, with only have €1bn to play with instead of €9bn.

Ms Kroes said: “It is clear that there can be no support for broadband with a pot of only €1bn, so this funding will be exclusively for digital services. Our 2020 fast broadband targets, agreed by everybody, may be harder to reach but I am not giving up on them. I will keep fighting, and I will support innovations that help roll-out fast broadband to underserved areas.”

In the UK’s House of Commons “questions were asked” as the saying goes. Helen Goodman, Labour MP for Bishop Auckland said: “The House knows by now that it was Labour’s policy to roll out broadband across the nation by 2012. The Government put the target back to 2015 and BT now says that it will not be achieved until 2017. What will be the impact of the Prime Minister’s decision to agree the 90% cut in the European broadband budget last week?”

Ed Vaizey, Secretary of State for Culture, Media and Sport responded with: “We would not expect that to have any impact on our own proposals. We are well ahead of the game in rolling out superfast broadband. Most of Europe—in fact, all of Europe—sees us as a leader in that respect.”

(Really? If anyone outside of the UK wishes to confirm or deny that the UK is seen as a broadband leader we would be most interested to hear it.)

For the UK, the cuts were not significant, as its own BDUK was not connected to the CEF and it had not made plans to make use of the fund. It’s a sensible case of not counting your chickens, but then as Cameron was aware he would be the one wielding an axe to the chicken coup, it’s probably not surprising that he saw this one coming.

The responses from the industry were not positive. “”It’s a giant leap backwards,” said Brian Condon, a director of the Community Broadband Network.”

The Fibre to the Home Council, a pressure group pushing for wider build-out of high-speed connections, told the Guardian  that it was “very disappointed” by the move stating that: “The decision shows that there still is a lack of understanding of European governments on the importance of future-proof broadband networks.”

Luigi Gambardella, ETNO chairman and Telecom Italia vice president, was also critical. “Investments in wireline networks in Europe in 2011 amounted to €24.8 billion, with ETNO members accounting for 67 per cent of this expenditure. Industry is finding it increasingly difficult to sustain this level of investment,” he said in a statement.

It’s clear that somehow that industry is going to have to work this one out for itself and the targets, of 30Mbps for everybody by 2020, will now have to be reached with little to no help from EU funding.

Will the EU be able to persuade operators to meet these targets? Will there be any financial incentive for the industry to help the EU meet these targets? These will be the big questions asked at the Broadband World Forum 2013 and I for one will be looking forward to hearing the responses.

The Broadband World Forum is taking place on the 22nd – 24th October 2013 at the RAI Exhibition and Convention Centre, Amsterdam. Click here to pre-register for the event.

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One thought on “Bad news day for broadband

  1. National Governments are perfectly capable to invest if they wish and far more efficiently than have the money pass through the extra filter of Brussels first, to pay their inflated wages.

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