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EU Contemplates Broadband & Public Funding

Posted: 16th May, 2007 By: MarkJ
Neelie Kroes, a member of the European Commission (EC) for Competition Policy, used yesterdays 'Bridging the Broadband Gap' conference to speak about the rollout of hi-speed services and competition policy.

Many Europeans have access to broadband services but, in rural and under developed regions, broadband is often not available. Still, one of the most interesting incites came when Kroes began referencing the development of fibre networks in areas that already have competing broadband services:

Finally, the need for state intervention in "black areas" is doubtful. These are areas where there are broadband services provided over at least two competing infrastructures (such as telephone and cable TV networks). In 2006, following a complaint, the Commission stopped a project for a fibre access network in the Dutch town of Appingedam. We were concerned that the project might have crowded out investments by commercial operators. After all, broadband is thriving in The Netherlands, which has one of the most developed broadband markets in the world.

Typically it’s unclear from the information above whether the commission prevented a next-generation network from being developed; for all we know the existing suppliers could have been fibre providers too. Regardless, Kroes concludes as follows:

Experience shows that open and efficient markets are the best tool to deliver broadband to all European citizens. There may be a justification for public support in specific situations where the market does not deliver. However, public policy makers must be aware that state aid is not a magic solution. It is vital that public broadband schemes are well targeted and well structured. Otherwise, they risk crowding out private investments or may lead to a bad use of taxpayer's money. That would be in no-one's interest.

The Commission has played its role by developing a framework for intervention in rural and sparsely populated areas. This framework is now well-tested and accepted by stakeholders. We have seen this demonstrated by the projects presented at this conference.

Let’s continue to work together to bring broadband to all European citizens. Bridging the broadband gap - and choosing the right means to do it - is vital for our society, for competitiveness and for growth.

It's easy to agree with his conclusions, but the development of future networks should at least be seen with more importance than it often appears to be given. Placing FTTx (Fibre) in the same boat as ADSL etc. is perhaps not the best way to view such advancements.
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