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Cable Europe: Beware public money for broadband

October 19, 2011

Cable Europe, the association for Europe’s MSOs was swift to react to Commissioner Neelie Kroes’ recommendation to the European Parliament that €9 billion be spent on broadband infrastructure between 2014 and 2020 through the Connecting Europe Facility.

Caroline Van Weede, Managing Director, Cable Europe says: “There is a case for state aid funding to make sure that the Digital Agenda avoids a Digital Divide. But we have a warning about how to use public funds. Keep them out of our territories. Not because we are scared to compete with other players – on the contrary. But because it kills the will for private investment if the market figures that the state will just pour money in if you wait around long enough. That is not going to help Europe’s Digital Agenda.

In the meantime, we’re busy beavering away on our networks and getting on with investments. It’s part of why we can say that we’re already achieving Digital Agenda goals in Europe. Today, 50 per cent of EU households are within the reach of cable broadband networks delivering speed levels between 10 and well over 100 Mbps. Or in other words, half of the digital agenda coverage target for 2020 will be delivered by cable in 2013.

Private investment is a key driver. Public investment, just like aid in the developing world, should go where the need is most urgent. Getting this right is a life or death scenario for Europe’s ICT future. We’ll be happy to see aid going where it’s needed most in the other half, the white spaces that are calling out for connectivity.”

Manuel Kohnstamm, President, Cable Europe says: “We see good opportunities to work with EU Commissioner Kroes, to help kick start fibre investments in the Other Half of Europe, the part where no cable competition exists or can be expected. And thats where a word of caution may be useful coming from a player in the market with experience in taking risks, and investing. There is a big gap in Europe when it comes to connectivity the gap is made up of white spaces or areas where there is no viable commercial model to invest. Inclusive and for all EU citizens whether in urban or rural settings, the Digital Agenda rightly aims to connect all Europeans to the best communications infrastructure possible.

Where this new tax-payers money is used to subsidise the development of rural areas, we are very supportive, provided that cable gets its fair share. We too, keep building NGN networks in greenfield areas. But where these public funds end up invested in areas where nascent players new entrants are already setting up shop or have planned new investments, the use of such funds could be hugely distorting.

If Europe is serious about spurring private investment with the limited funds it has available which I strongly believe it is and has to be we need to challenge each and every investment of public funds by simply questioning: Is this investment likely to have a perverse effect on a market which is just waking up thanks to private funds or is this investment the only chance of getting service up and running here?

Its an important thing to get right. And don’t get me wrong, I don’t wish to question a positive announcement aiming to further the Digital Agenda in the toughest spots to reach, the Other Half of Europe. Let’s just make sure that the investments kick-start rather than stifle development where it is needed most.”



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