Berlin/Bonn, 30.04.2024 – The Federal Ministry for Digital and Transport launched the new call for gigabit funding today. Sven Knapp, Head of the Capital Office at the German Broadband Association (BREKO), explains:

“The Federal Ministry of Digital and Transport is failing to achieve its self-imposed goal of adapting gigabit funding so that the number of funding applications and market exploration procedures is significantly lower than in the previous year. We are experiencing déjà vu here: on the basis of the new regulation, thousands of costly funding applications are once again being submitted, which the federal government has to reject.

Instead of limiting itself to recommendations, the BMDV should have issued binding guidelines to ensure that only local authorities that have a chance of success submit funding applications. Then all other municipalities could concentrate fully on creating optimal framework conditions for faster, more cost-effective fiber optic expansion instead of filling out stacks of hopeless funding applications.

In addition, a fundamental problem remains unsolved: with three billion euros for new funding projects this year alone, far too much state money is still being pumped into the market. A long-term, targeted funding policy with a maximum funding amount of one billion euros per year would accelerate fiber optic expansion overall. This should be linked to a clear perspective for the municipalities that this sum will also be available in the coming years. Last but not least, a reduction in funding with a view to the 2025 budget gap would be a noticeable relief for the federal government. Gigabit funding must also be put to the test in the consultations on the 2025 federal budget!

It is also problematic that the amendment to the gigabit framework regulation, which is decisive for funding, was rushed through. Immediate implementation of these far-reaching changes comes too soon. It would have made more sense for the new framework regulation to take effect for funding procedures starting next year at the earliest.

The fact that the duration of the market exploration procedure is to correspond to the implementation period of the subsidized expansion projects in future is an important step towards preventing the crowding out of self-sufficient expansion. However, this duration cannot be determined by the municipalities in practice, as it cannot be predicted from the outset. Instead of a framework of three to seven years, the BMDV should have used the average duration of gigabit funding projects as a binding basis for a specific period.

We also take a critical view of the federal government’s efforts to set binding wholesale prices for subsidized networks in future. A recent example shows that government price fixing leads to considerable uncertainty in the telecommunications market: just a few weeks ago, the Cologne Administrative Court overturned a decision by the Federal Network Agency to fix wholesale prices.

With the new gap closure pilot program, however, the BMDV is providing an important impetus for better dovetailing of self-funded and subsidized fiber optic expansion in the sense of a nationwide expansion of municipalities. However, the planned funding of EUR 500,000 per project is set so low that it is questionable whether the program will work in practice. This sum should be increased to one million euros by the start of the program in June.”