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 will the Commission do?

The Commission has made a series of funding proposals that are currently being discussed by the European Parliament and the Council as part of the negotiations for the multi-annual financial framework for 2014-2020. These include:

  • 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; The Commission has proposed a budget of €9.2bn for broadband
  • a Communication on Project Bonds, adopted on 19 October 2011 following a public consultation, along with a Regulation amending the CIP and TEN Regulations to enable projects bonds to be available in 2013;
  • a cohesion policy legislative package was presented on 6 October 2011(COM(2011) 615) and proposed Common Provisions Regulation for the ERDF, ESF, Cohesion Fund, EAFRD and EMFF (CPR). This provides clearer strategic direction to the programming process at the level of Member States and region in order to facilitate sectoral and territorial coordination of Union intervention under the CSF Funds and with other relevant Union policies and instruments.