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February 14, 2013

Cuts in European Broadband Spending Plan Lead to Outcry from Diverse Voices

By Ed Silverstein, TMCnet Contributor

There has been an outcry from many in the tech sector over severe cuts in a proposed broadband budget for the European Union – as part of the region’s multi-year spending plan.

The cuts were encouraged by the United Kingdom and Germany – yet they make it more difficult to expand high-speed service to the region at a time when its presence would help economic development.

Most recently, Frost & Sullivan (News - Alert) industry manager Saverio Romeo called it a “disappointment” that broadband investments were cut, including in such key sectors as e-health and e-government.

“Considering that the budget reduction has been designed around an austere approach to EU spending, the investments in technologies that cannot only promote growth, but can also reduce the cost of public services, have been reduced,” Romeo said in a statement. “Frankly, it is paradoxical…Next generation broadband access and the next generation of digital services are fundamental for building a smart and strong Europe.”

In addition, Neelie Kroes, vice president of the European Commission, was also disappointed by the budget cut affecting the Connecting Europe Facility. Officials agreed to keep in about $1.3 billion out of the original proposed $12.34 billion.

“This still leaves room to invest in service infrastructure, in fields like eProcurement and eInvoicing, that can support a digital single market and ensure top-quality, 21st-century public services for Europeans,” she said in a blog post. “But this funding will have to be exclusively for digital services, because such a smaller sum does not leave room for investing in broadband networks. I regret that, because broadband is essential for a digital single market, the rails on which all tomorrow’s digital services will run; and this could have been an innovative and highly-market oriented way to deliver it, almost budget-neutral in the long run.”

Europe has pledged to have fast broadband coverage in place for the entire region by 2020 – and the budget cut makes it more difficult to reach the goal. The EU Commission wants broadband connections of 30 megabits a second to be available to 500 million EU residents by 2020, TMCnet reported.

Now, it appears that more effort will be made to encourage private investment in broadband, fixed and wireless sectors, she added.

ETNO, (European Telecommunications Network Operators' Association) an industry group, was also disappointed by the cut.

"ETNO is disappointed that budget cuts have been made which affect forward-looking initiatives such as the Connecting Europe Facility, and in particular the fund devoted to NGA (next generation access) networks, which have a real role to play in driving Europe out of the current crisis," Luigi Gambardella, chair of ETNO's executive board, said in a statement.

"Given the key importance of high-speed broadband networks and the potential leverage effect on private network investments of the CEF, this budget cut is a missed opportunity for Europe's economic recovery," he added.

The budget cut was “engineered” by UK Prime Minister David Cameron, with assistance from Germany, according to The Register.

The money still could be reinstated by the European Parliament. The EU budget plan is for seven years.

The U.K.’s Department for Culture Media and Sport issued a recent statement reported by The Telegraph that said in part, "It remains important that the EU agrees [to] an affordable budget which reflects the current fiscal position faced by Member States. The U.K. does not support unaffordable increases in spending. The commission had interesting proposals for the €9.2bn CEF but the government has not developed any future broadband plans on the assumption that it would go ahead."

Edited by Braden Becker
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