EU broadband cuts "won't hurt UK rollout"

 

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By Nicole Kobie

Posted on 12 Feb 2013 at 14:46

Huge cuts to the EU's broadband fund shouldn't hurt the current rural infrastructure rollout, according to BT.

As part of EU cost cutting, the €9bn budget for a broadband project called Connecting Europe Facility (CEF) has been cut, with only €1bn approved.

Neelie Kroes, European Commission vice-president, said she was "disappointed" by the move, noting that the remaining €1bn in funding won't be given to infrastructure but to other digital projects, "because such a smaller sum does not leave room for investing in broadband networks".

The Connecting Europe Facility (CEF) had not yet been approved by the European Parliament, and was designed to offer loans and grants to groups with weak credit or who couldn't raise capital another way, and as a way to "attract private sector financing", an EU document notes.

In the UK, that may have appealed to local community groups, but BT said it will have no effect on the existing Broadband Development UK (BDUK) rollout, which is targeting superfast connections for 90% of UK homes by 2015.

"Details of the CEF, and its actual method of application, had not yet been finalised," said BT, which has won all the BDUK project bids so far. "As such, BT had no plans to make use of the facility, and its reduction (from €9bn to €1bn) should have no impact on existing or planned funded projects such as Cornwall, Northern Ireland or BDUK. We support the European Commission’s ambitions to encourage widespread broadband deployment - the UK is seeing the fastest rollout of any European country and this progress will continue."

"The Commission had interesting proposals for the €9.2bn CEF but of course the government did not base its broadband plans on speculative proposals," a DCMS spokesman added, stressing that the CEF had yet to be approved. The UK government has pushed for the EU to cut its budget.

The BDUK infrastructure project does use EU money - it makes up about 18% of the total funding to date - but that arrives via the European Regional Development Fund (ERDF). The budget for the ERDF has been slashed by 8%, but most of the funds for BDUK will have already been approved by the time the cuts hit in 2014.

As Kroes noted, the CEF was "not the only" tool for broadband. "Member States have now taken on themselves the responsibility to invest, with their own funds or the EU’s structural funds, in areas where there is real market failure."

Future problems

The cuts could have repercussions in the future, however. The BDUK project looks to push superfast broadband to 90% of UK homes by 2015, while the European targets are longer term, looking to roll out 100Mbit/sec lines to half of the EU by 2020.

And, while the UK's rollout may not be affected, the missing funding could hit broadband plans in other European nations.

"This would mean it's up to member states or the private sector to put up the funding," said Charles Trotman, broadband spokesman for Country Land and Business Association. "It's highly unlikely that certain member states would be able to. Just a billion euros isn't going to be enough."