Berlin, 12.12.2023 In view of the critical budget situation and a gigabit funding program that has been heavily oversubscribed again this year, the digital and telecommunications associations ANGA, Bitkom, BREKO, BUGLAS and VATM are calling on the German government to limit the gigabit funding for 2024-2026 to one billion euros per year and to use the funding in a more targeted manner. This would relieve the federal budget by a total of six billion euros without fewer new connections being built. The associations are calling for a revision of the funding program that does justice to the limited construction capacities available and prevents a renewed flood of applications as well as frustration among local authorities.

Even though the federal government’s gigabit funding program (“Gigabit Funding 2.0”) launched in April 2023 now distributes the funding more sensibly via a newly introduced points system, there is still an acute need for reform: In 2023, 40 percent of German municipalities started a market exploration procedure – the preliminary stage to the funding procedure – and submitted 962 funding applications with a volume of 6.8 billion euros. Of these, only 436 (3.6 billion euros) were approved. And this is only the federal share of the funding: the total funding volume applied for amounted to almost 13 billion euros.

In order to prevent thousands of local authorities from submitting costly funding applications without any prospect of success in future, a pre-qualification process must be introduced as a matter of urgency. Clear criteria would give mayors and district councils clarity from the outset as to whether they have a realistic chance of success with a funding application. This could prevent a renewed flood of applications – and the municipalities could work together with the companies expanding the fiber optic network to make greater efforts to achieve a fast, self-sufficient expansion without using taxpayers’ money.

In addition to the Federal Ministry of Digital and Transport, which must adapt the rules for gigabit funding, the federal states in particular also bear considerable responsibility for a targeted funding policy. In view of the oversubscription of up to 500% of the funding earmarked for individual federal states, they should critically question how they deal with increasingly scarce taxpayers’ money. After all, the federal funds normally have to be supplemented by the federal states and local authorities in the same amount. It is therefore in their own interest to work constructively on reducing funding and developing effective pre-qualification.

Fears that a reduction in gigabit funding would delay the expansion of fiber optics, particularly in rural regions, are unfounded. This is because only around 20 percent of the total funding of more than 30 billion euros made available since 2016 has been paid out. Funding projects worth over 20 billion euros are still in the planning and construction phase. Given the scarcity of civil engineering and planning capacities and the risk of funding measures crowding out self-funded projects, it hardly makes sense to keep launching new funding projects and delays completion by three to five years compared to self-funded expansion.

Conclusion: The self-funded fiber optic expansion is running at full speed. The significantly slower subsidized expansion is a necessary supplement to achieve nationwide coverage, but must be focused more strongly than before on municipalities that are really in need. In view of the critical budget situation, a high level of private-sector momentum in expansion and an enormous backlog in the implementation of approved funding projects, federal funding should be reduced to one billion euros per year from 2024.

Annex: Over- and under-subscription of federal funding earmarked for individual federal states in 2023 (source: BMDV)