The Federal Ministry for Digital Affairs and Transport (BMDV) in Germany is planning to align broadband funding with private sector advancement and existing supply situation. This initiative is presented in a draft guideline that aims to promote gigabit expansion. The government also plans to issue the guidelines in a key issues paper, with the aims of addressing the oversubscription of the previous programme and the subsequent application freeze.
To ensure targeted allocation of funds, the government proposes state caps. For city-states like Bremen, Hamburg, and Berlin, a total of €75 million will be the limit, while €100 million will be the base amount for non-city states, including Bavaria and Baden-Württemberg. The remaining fund will be distributed in different countries based on the eligible connections’ percentage in Germany. The eligibility criteria for funding will be through a new list of criteria that will apply until the end of 2025.
The federal government plans to fund around €3 billion from April 2023, aiming to provide funding only in areas without a next-generation broadband network or those without a reliable data rate of at least 200 Mbit/s symmetrically or 500 Mbit/s in download.
The eligibility of an application will depend on a new catalog of criteria that includes backlog demand, use of synergies, digital participation in rural areas, population density, and cross-community cooperation. This catalogue will have a scoring calculator that potential applicants can access online.
The market investigation process will be made more flexible and less binding in this project. If a company applying for expansion funding cannot prove that pre-marketing has taken place, the area will be eligible for funding. Municipal industry dialogues will also help to identify opportunities for self-sufficient expansion.
The focus of the initiative is to strengthen the operator model, enabling cities and municipalities to set up their own network infrastructure and lease them to commercial providers. In future, municipalities can keep the passive infrastructure in their hands, which guarantees operation.
However, some critics argue that the new guidelines do not provide enough prioritisation, which slows down fiber rollout and makes it more expensive. The focus on municipal operator models has been described as “absurd”.
There is also a reduction in funding by the federal government, which states have been complaining about for a long time. The new guidelines do not provide the necessary planning security for rapidly expanding fiber optic networks by 2030.