On November 13, 2020, the EU Commission officially approved the German state aid scheme for the expansion of very high-speed broadband networks with gigabit transmission speeds (“grey-spot funding”). The scheme has an estimated national budget of €6 billion, which will be supplemented by contributions from regional and local budgets for the individual funding projects, bringing the total budget to up to €12 billion.
Together with other telecommunications industry associations, BREKO (Bundesverband Breitbandkommunikation e. V.) developed a corresponding proposal for the design of the new funding program and sent it to the German government last week.
Regarding the EU Commission’s approval, BREKO explains:
The BREKO companies clearly support the priority of self-sufficient fiber optic expansion. In 2019, they implemented 75% of the newly built fiber optic connections without the use of taxpayers’ money. Thanks to numerous investors, a very high level of financial resources will also be available for fiber optic expansion in the coming years. Now that the EU Commission has approved the “grey-spot funding” in principle, it is important for the concrete implementation of the new funding program to find the right balance between the very high level of self-economic expansion activities on the one hand and the accompanying subsidized expansion on the other.
Raising the threshold for private households to 100 Mbit/s download speeds, as approved by the EU Commission, is politically feasible and, if certain funding criteria are defined to ensure that funding is used where it is most urgently needed, is a suitable way to get started with “gray-spot funding”. Stephan Albers explains: “When translating the EU Commission’s guidelines into practice, the German government should provide for a graduated and staggered system in the sense of an intelligent control logic. The aim of the staggered system is to initially focus funding activities on regions with particularly poor coverage and to limit the total amount of funding provided per year to a maximum of one billion euros. This will prevent a huge number of subsidized projects being initiated at the same time, which access the same scarce civil engineering resources and thus lead to price increases without an increased expansion effect for citizens and companies.”