Germany Gets Grant for High Speed Broadband Network Expansion

High speed broadband network projects will soon change the telecom landscape of German cities and villages as the country receives a grant of 3 billion euros to develop next generation access technologies. European Commission has approved Germany’s proposal for a national support scheme that aimed at massive deployment of next generation broadband networks according to EU state aid rules. EU commission found that the main elements of Germany’s telecommunication infrastructure development proposals meet the guidelines set by the commission.

There were speculations that the prevailing Vectoring technology used in Germany is not competitive and therefore not effectively beneficial to the end users. European Commission after analysis of Germany’s proposals stated that overall the scheme furthers the objectives of the EU Digital Strategy while maintaining competition in the market. Under the scheme telecommunication service providers and local authorities would be able to apply for funds in target areas, where they offer basic broadband service and where there are no private investment plans for the next 3 years.

Germany aims to build broadband access networks capable of delivering download speeds of 50 Mbps to majority of its households and businesses with a minimum of 30 Mbps. The networks that are going to be expanded or built will make faster internet services in areas where private operators are reluctant to enter. This is a major boost to Germany to reduce the digital drive existing in the country.

Germany has been traditionally favoring legacy networks due to the facts that such networks were already existing in the country and replacement with fiber is expensive and time consuming. German authorities have favored a slow transition from copper based access networks to fiber based access networks. Compared to many other developed and developing economies of Europe and Asia, Germany opted for a gradual transition that resulted in a sluggish and noncompetitive telecom market in the country.

The approval came after more than one year since Germany notified the European Commission of its plans to provide 3 billion euro support of NGA broadband deployment over the coming years in the country. The Commission assessed the measure under its EU state aid rules, in particular the 2013 Broadband State Aid Guidelines. EU Guidelines demands that the publicly funded networks shall be open to all competitors on non-discriminatory conditions. Funding can be provided for projects that engage in significant investment in networks with substantial improvement in service levels.

Germany’s plan included vectoring technology, which can be added to Next Generation Access networks while allowing increase of connectivity speeds even further with moderate additional investment. One of the drawback of Vectoring technology is that a large number of households have to be bundled together, to be served by one provider only. This kills the competition in service market by limiting subscriber choice to one provider. This means that competitors cannot gain physical access to single subscribers. The Commission was therefore concerned with vectoring technology that is used in Germany. EU pointed out that Vectoring technology may have anti-competitive effects. Germany confirmed and could convince EU that an access product capable of granting full access to vectored networks for competitors would be implemented soon that will meet EU guidelines for competitiveness in the telecom service market.


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