German Goverment Approves Broadband Strategy
The German government has approved the Federal Ministry of Transport and Infrastructure’s plans to make available 2.7 Billion Euros in order to promote the roll out of superfast broadband (see also https://www.linkedin.com/grp/post/4375471-6054664187936804865?trk=groups-post-b-title). The government aims to provide universal access to broadband at a minimum of 50 Mbps by 2018.
The funding scheme derives from the Federal Government’s framework on NGA broadband delivery which was approved by the EU commission to be compliant with the EU guidelines for the application of State aid rules in relation to the rapid deployment of broadband networks (2013/C 25/01). Funding of broadband projects are in many cases to be considered to be State aid within the meaning of Article 107 TFEU and usually requires State aid clearance. Governments are however permitted to support broadband deployment in so called "white NGA areas" meaning areas where there is no NGA broadband infrastructure, nor any private sector investment plans to roll out such infrastructure in the next three years.
The funding will be made available to local authorities in rural and remote areas. Local bodies can subsidize telecommunications operators in two different ways: they can either financially support the economically unattractive rollout of broadband networks by a telecoms operator (“closing of the profitability gap “) or they can install broadband networks themselves and then rent out their infrastructure to suppliers (so called “operator model“). The government will cover up to 50 per cent of the costs up to a total amount of 15 Million Euros. A scoring system will be used to assess funding allocations. Assessment will be based on density of population in each area and the number of premises without a reasonable broadband service, as well as potential success and sustainability of the project. The higher the overall score the more money is provided. Funding may only be granted where substantial new investments are made. Thus, it can be assumed that FTTC/Vectoring coverage of “white NGA areas” is eligible for funding.
Press release by the German government and further documents:
Any questions? Please contact: Julian von Lucius
Practice Group: Telecommunications