Reinforce and rationalise, in this framework, the funding of high-speed broadband through EU instruments (e.g. ERDF, ERDP, EAFRD, TEN, CIP) by 2014 and explore how to attract capital for broadband investments through credit enhancement (backed by the EIB and EU funds).
What is the problem? Lack of funding = slow deployment of broadband internet
High speed internet enables businesses, especially small ones, to remain competitive and allows consumers to benefit from many advanced online services that improve their quality of life.
However the private sector is reluctant to invest in the deployment of broadband networks because of:
- High risks: infrastructure sharing by private sector operators or resulting from public-private co-operation, are perceived as higher risk transactions,
- Longer pay back periods,
- Insufficient experience: promoters may be too small and inexperienced to attract the interest of large financial institutions.
Why is EU Action required? To help finance broadband deployment
EU and European Investment Bank funds should be used alongside national funding instruments to compensate for the lack of private sector financing.
EU intervention is also necessary to ensure that areas outside urban conglomerations benefit from the deployment of ultra fast internet.
What are the Commission's plans?
- By end of 2010: establishment of an informal working group with the EIB to explore possible finance instruments;
- February 2011 – launched a public consultation on Project bonds initiative (innovative financial instruments). The Commission adopted a Communication on Project Bonds on 19 October 2011 along with a Regulation amending the CIP and TEN Regulations to enable projects bonds to be available in 2013;
- In spring 2011: launch of an impact assessment study to analyze the prospect financing and related legislative policy options. The study will analyze the effectiveness of various financing alternatives in the period 2014+, Study launched September 2011 with final results expected end 2012;
- By mid 2011: end discussions on the future platform structure for financing of infrastructure, the size of financial support and associated legal and institutional arrangements in the context of the next financial perspective. Commission proposed a new Connecting Europe Facility(CEF) for funding of transport, Energy and broadband infrastructure as part of the new Multiannual Financial Framework for 2014-2020. A Regulation on the CEF along with Guidelines for Broadband was adopted on 19 October 2011;
- In 2013: testing of several pilot projects using debt or equity financing facilities, in cooperation with the EIB.