EU Commissioner warns member states to back broadband in new budget

EU countries are considering diverting funds away from next gen networks

Europe's Digital Agenda Commissioner has warned E.U. member states that they cannot get away with not supporting broadband rollout and next generation networks.

The comments from Neelie Kroes come following suggestions that some countries want to divert Connecting Europe Facility (CEF) funds away from building next generation networks and into transport and energy instead.

"Every Council meeting is asking for more digital action, more digital progress," said Kroes. "Now they need to put their money where their mouths have been. Some politicians think broadband isn't sexy because you can't see it. Well, let me tell you that recession is even less sexy. And if you cut broadband investment, then you cut growth. We don't need more empty airports. We need a balanced investment program in Europe that targets investment at the sectors with strongest prospects for growth."

European Affairs ministers held an informal meeting on Thursday to discuss the E.U. budget for 2014-2020 of which CEF is a part. The total proposed funding is ¬50 billion (US$62.65 billion), but according to leaked reports, the telecommunications part has received less support by member states than transport and energy and the Council may reconsider "the size and relative weight given to the three strands" of the CEF.

ETNO, the industry group representing Europe's largest telecoms providers, said on its website that funds must not be diverted.

Meanwhile, Ireland announced on Thursday that it would allocate ¬200 million in state funding along with matching funds from private telecom companies as part of a national broadband plan. State aid clearance from the European Commission will almost certainly be required, in order to guarantee that public funds are not substituting for potential private sector investment.

The Commission has been very active in implementing Telecoms Directive rules in recent weeks, telling the Czech telecoms regulator to withdraw plans on access to its broadband networks.

The regulators in the Czech Republic, TÚ, wanted to include wholesale broadband services based on cable and Wi-Fi platforms in its definition of the wholesale broadband access product market. This would have partially lifted obligations on the main Czech telecoms operator Telefónica to give alternative operators access to its infrastructure.

And on Tuesday the Commission ordered the Polish telecoms regulator, UKE, to amend or withdraw its proposal to give alternative operators only limited access to Telekomunikacja Polska's fiber networks. In the Commission's view, UKE's decision could have a negative effect on competition and the future development of fiber networks.

These are the only two times that the Commission has issued such recommendations, but give a clear signal that the Commission may be at odds with member states on the issue of pushing next generation networks. Kroes plans to present draft guidelines on broadband access regulation before the end of the year.

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.

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Jennifer Baker

IDG News Service
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