Today, the German government presented its plan for the further expansion of the digital infrastructure in Germany with its gigabit strategy. Even though the strategy paper contains suitable approaches for a faster fiber optic expansion, the federal government is missing the opportunity to adapt the fiber optic expansion to the current market dynamics and thus accelerate it by structuring state funding sensibly.

The gigabit strategy contains a total of 98 individual measures that are intended to help accelerate the expansion of fiber optics and mobile communications in the coming months and years. Despite this high number of measures and some good approaches, the paper falls short of expectations overall, according to Norbert Westfal, President of the German Broadband Association (BREKO) and CEO of EWE Tel. “The fact that the German government has published its gigabit strategy today, despite the current crises and associated political challenges, is an important step on the way to nationwide fiber optic expansion. Overall, however, the plan is not yet sufficient to achieve the very ambitious expansion targets. Without a rapid concretization of important areas, such as the acceleration of approval procedures, the greater use of alternative installation methods and a fundamental adjustment of state funding, the expansion will take longer than planned.”

“Keep it up” with fiber optic funding jeopardizes investments and expansion targets

BREKO is particularly critical of the planned regulations for the future state funding of fiber optic expansion: “With the lack of realignment of state funding, the federal government is leaving one of the greatest potentials for accelerating fiber optic expansion untapped. Instead of clearly prioritizing areas that really need it, pressure from the federal states and the German Association of Districts will open the floodgates for the most extensive possible funding measures from January 2023, while at the same time ignoring the telecommunications industry’s immense willingness to invest. There is also a lack of clear, pre-defined rules for the evaluation of the funding practice envisaged in the gigabit strategy. If the federal government does not specify from the outset when the ‘appropriate level’ of market exploration and funding procedures in the individual federal states has been exceeded, no meaningful correction of undesirable developments can be made. A game without rules ends in chaos. We can expect something similar for future fiber optic funding,” says BREKO Managing Director Dr. Stephan Albers.

He is therefore not very optimistic in his predictions: “It is foreseeable that many federal states will launch a large number of market exploration and funding procedures with the start of the new funding program. The experience of recent years clearly shows that the implementation of subsidized expansion projects takes two to three times as long as in the self-business expansion. For this reason, a significant expansion of funding without prioritization to regions without the prospect of expansion on their own is slowing down the expansion of fiber optics. In addition, tax revenue is wasted and the costs for the entire expansion are driven up if already scarce resources such as skilled workers and civil engineering capacities are tied up for years in protracted funding projects. This is a development that could be prevented with a long-term funding concept with clear rules.”

This is all the more regrettable as the telecommunications industry has submitted several pragmatic proposals in recent months on what a funding concept could look like that sensibly limits fiber optic funding on the basis of objective criteria so as not to crowd out the promised private investments of EUR 50 billion over the next few years.

Accelerate and implement approval procedures quickly

The German government rightly emphasizes the importance and urgency of simplifying and digitizing approval procedures in order to accelerate the expansion of fibre optics and mobile communications. However, the majority of implementation in this area lies with the federal states and local authorities. These are now responsible and must be judged by whether they achieve noticeable progress in the coming months, for example with the nationwide implementation of the broadband portal as part of the Online Access Act (OZG).

The German government’s commitment to the increased use of alternative installation methods is also to be welcomed. But here too, action must follow very quickly: The Federal Ministry for Digital and Transport Affairs (BMDV) must work towards a timely completion of the ongoing DIN standardization and, in doing so, press for this standard to actually lead to a significantly expanded use of alternative installation methods – something that parts of the construction industry apparently want to prevent. In addition to standardization, the establishment of a liability fund for consequential damage not covered by the warranty could also help to reduce any remaining reservations in local authorities. In the final version of the gigabit strategy, however, this possibility is only included as a test point, unlike in the draft.

A third positive section of the gigabit strategy concerns the shortage of skilled workers: there is a lack of skilled workers not only in underground cable construction, but also in all other areas of fiber optic expansion such as building cabling and application processing on the part of local authorities. BREKO therefore welcomes the planned development of an “overall concept for recruiting skilled workers” and other initiatives to improve the current situation. It is important that the topic is addressed holistically and under the leadership of the Federal Ministry of Labor and Social Affairs. The association is already involved in the “Skilled workers for fiber optic expansion” initiative, but is of the opinion that further, more extensive measures are necessary, in which the association will also play an active role.

All stakeholders around the table to drive fiber optic expansion forward

The gigabit strategy contains both light and shade when it comes to the future shape of cooperation between the federal government, federal states, local authorities and the telecommunications industry: On the one hand, the federal government emphasizes the intention to involve all players involved in the expansion of fibre optics in order to remove the existing barriers to expansion. On the other hand, the federal government is clearly continuing to rely on parallel dialog formats between the federal government, states and municipalities on the one hand and the federal government and industry on the other. In order to achieve real progress quickly, however, it would be important to create a joint exchange format and bring all stakeholders together regularly to work together on bringing fiber optic expansion to citizens and companies as quickly as possible.

Although BREKO’s overall conclusion on the gigabit strategy is sobering, BREKO Managing Director Albers sees potential in its practical implementation: “The gigabit strategy is only worth the paper it is written on if politicians quickly find ways to enable the telecommunications industry to expand quickly. The federal, state and local authorities must work together to finally bury unnecessary bureaucracy, handle approval procedures digitally and efficiently, clear the way for alternative installation methods and, above all, give priority to significantly faster self-business expansion. These changes have the potential to shorten the time it takes to complete the nationwide rollout of fibre optic networks in order to quickly create new opportunities in terms of digitalization, particularly in the areas of sustainability and climate protection.”