The European Commission has today outlined its plans for the EU Digital Single Market (DSM). This is one of the main priorities for the Juncker Commission.
One of the aims of the DSM package is to close the digital gap between urban and rural areas and the ultimate aim is to provide fast/ultra-fast broadband on the whole of the EU territory by 2020.
Options available to Member States or regions under their 2014-2020 national or regional Rural Development Programmes are aimed at addressing these challenges.
A strong supporter of today's initiative, EU Agriculture and Rural Development Phil Hogan stated: "Introducing or improving broadband coverage in rural areas is crucial for boosting growth and jobs in rural areas, enabling businesses to remain competitive, integrating rural areas into the overall economic context, and enhancing the attractiveness of rural communities. One of the aims of this initiative is to ensure that the EU funds that are already foreseen for the coming years – including an estimated 2 billion EUR from the CAP's Rural Development Programmes – are spent efficiently and where they are most needed, to give a real EU added value. In this sense, I am particularly pleased to note the proposal for a "One Stop Shop", so that mayors or other regional representatives can easily see what EU-funded opportunities are available to them."
Closing the gap between rural and urban broadband
The needs for fast and ultra-fast broadband are significantly more marked in rural areas of the EU than in urban areas. In 2013, only 25.1 % of rural areas were covered by the Next Generation Access (NGA = at least 30 Mbps download), as compared to 68.1 % in urban areas.
But the digital gap between rural and urban areas is not only a question of coverage, it often relates speed, quality and cost.
Private operators frequently find that it is not economically viable to invest in new broadband services in rural areas, frequently because ICT and broadband infrastructure is limited and costs are therefore higher and the potential returns are not as high as in more populous urban areas. In short, there is not necessarily the critical mass to ensure profitability.
Consequently there is a role for public funding for stimulating investment and overcoming these problems.
In this context, Member States have various options to use EU-funding to co-finance ICT and broadband projects – a format that helps leverage other investment, sometimes in conjunction with other Financial Instruments.
For the 2014-2020 period, estimates show that roughly 21.4 billion EUR from the five EU Structural and Investment Funds (ESIF) will be devoted to Information and Communication Technologies (ICT), of which about 6.4 billion EUR will be to finance high seed broadband roll-out.
The estimated contribution from Rural Development (the EAFRD) between now and 2020 is 1.6-2.0 billion EUR.
These amounts will all be co-financed by investment from other private or public sources.
Existing investments will be preserved, while new ones will be attracted ensuring therefore growth, job creation and improvement at the same time of the quality of life of the rural population.
The package also proposes the concept of a "One stop shop", where mayors in any region of the EU will be informed of all EU co-funding possibilities for broadband.
The Digital Single Market package and Rural Development in particular will help stimulate during 2014-2020 the introduction/creation of new infrastructures and upgrade/expand existing infrastructures depending on national, regional or local needs.
Specific derogations from the size limitation for investments for introducing broadband networks exist providing more flexibility for ICT and Broadband investments than for other small infrastructure related projects [see Article 20 (2) of Regulation (EU) No 1305/2013].
There are good examples in some parts of the EU of rural communities which have used Rural Development options to introduce superfast broadband. Often these are self-established projects, for example via LEADER, which have even been privately funded without involving classical telecom operators. The RDP and also the structures around it (managing authorities etc.) are well placed to replicate such approaches where possible.