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),
• 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+,
• 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,
• In 2013: testing of several pilot projects using debt or equity financing facilities, in cooperation with the EIB.

Contact:

ken.ducatel@ec.europa.eu