Internet in rural areas
Only a quarter of the fiber optic funds have been paid out so far
Fiber optic cables to the home are considered the best technology for fast and stable data connections. (Archive image) Photo
© Sina Schuldt/dpa
The internet is becoming increasingly important in the digital age. But in some rural areas things are moving at a snail’s pace. The federal government is making billions available to change this – has it been successful?
When it comes to expanding fast fixed-line Internet, only about a quarter of the Funding that the federal government has made available for this purpose in recent years has been used. As the Federal Ministry for Digital Affairs announced in response to a request, a total of around 16 billion euros has been approved for broadband expansion in various funding programs since 2015. According to the information, only more than four billion euros of this has been used. According to the ministry, the remaining funds, i.e. more than eleven billion euros, are currently being used and are continuously being used by the applicants. “We assume that the funds approved so far will also be paid out in the approved amount.”
According to a goal of the federal government, fiber optic connections should be available everywhere where people live and work by 2030. We are still a long way from that. Providers such as Deutsche Telekom and Deutsche Glasfaser are expanding rapidly. However, the companies are avoiding some sparsely populated areas because it is not economically viable for them. The federal government is providing funding so that such rural areas are not cut off from appropriate digital participation.
Fiber optic offers the best data transmission
It is about Internet with fiber optic cables running right into the house or apartment (FTTH, Fiber to the Home). This is considered the best technology for fast and stable data connections. Internet via telephone lines (DSL/VDSL) is a discontinued model in the long term, and the network via television cable (HFC, Hybrid Fiber Coax) cannot technically keep up with pure fiber optic cables.
According to the Federal Ministry of Transport and Digital Affairs, headed by Volker Wissing (FDP), the federal funds are paid out according to the progress of construction. “That is why the majority of the approved funds are only paid out several years after the approval has been granted.”
Before the funds are paid out, various procedural steps must be completed. Municipalities must first carry out the so-called market research procedure and only then can they apply for the funds. Once this has been approved, the tender is issued and only after the contract has been awarded can a company submit a building application.
Invoices will be submitted depending on construction progress
These, in turn, are checked and approved, after which construction work can begin – the latter is not a sure-fire success given the limited construction capacity. Depending on the progress of construction, invoices are submitted and then paid. According to the ministry, it usually takes two to four years between approval and the first cash flow. The federal government is currently funding more than 3,000 expansion projects, creating four million new fiber optic connections.
Funding only for a small part of the expansion
The Federal Ministry says that the gigabit funding is primarily aimed at supporting rural, less densely populated or structurally weak regions. They are on the right track, with fiber optic connections already available for around a third of German households, and the trend is rising sharply. 90 percent of the expansion is self-financed, i.e. without funding. “The current funding concept improves the balance between private and subsidized expansion of telecommunications networks.”
State funding is not without controversy, and many telecommunications companies view it critically. “Due to the high bureaucratic hurdles, the implementation of state-funded expansion projects takes significantly longer than the private fiber optic expansion; up to seven years is not uncommon here,” says Sven Knapp from the Federal Association for Broadband Communications (Breko). “Nevertheless, the subsidized fiber optic expansion is and remains important for supplying regions in which private expansion is not possible.”
The federal government recently cut subsidies for fiber optic expansion. Instead of three billion euros, only two billion euros will be made available this year. The reason for the cut is the federal government’s current budgetary difficulties.