Improving broadband coverage in rural areas ‘crucial’ – Hogan

The European Commission recently outlined its plans for the EU Digital Single Market (DSM).

One of the aims of the DSM package is to close the digital gap between urban and rural areas and the ultimate aim is to provide fast/ultra-fast broadband on the whole of the EU territory by 2020.

Options available to Member States or regions under their 2014-20 national or regional Rural Development Programmes are aimed at addressing these challenges.

A strong supporter of today’s initiative, EU Agriculture & Rural Development Phil Hogan stated introducing or improving broadband coverage in rural areas is crucial for boosting growth and jobs in rural areas, enabling businesses to remain competitive, integrating rural areas into the overall economic context, and enhancing the attractiveness of rural communities.

“One of the aims of this initiative is to ensure that the EU funds that are already foreseen for the coming years – including an estimated €2 billion from the CAP’s Rural Development Programmes – are spent efficiently and where they are most needed, to give a real EU added value.

“In this sense, I am particularly pleased to note the proposal for a ‘one stop shop’, so that mayors or other regional representatives can easily see what EU-funded opportunities are available to them.”

Closing the gap between rural and urban Broadband

The needs for fast and ultra-fast broadband are significantly more marked in rural areas of the EU than in urban areas, it says.

In 2013, only 25.1% of rural areas were covered by the Next Generation Access (NGA), as compared to 68.1% in urban areas.

But the digital gap between rural and urban areas is not only a question of coverage, it often relates speed, quality and cost.

Private operators frequently find that it is not economically viable to invest in new broadband services in rural areas, frequently because ICT and broadband infrastructure is limited and costs are therefore higher and the potential returns are not as high as in more populous urban areas.

In short, there is not necessarily the critical mass to ensure profitability.

Consequently there is a role for public funding for stimulating investment and overcoming these problems. In this context, Member States have various options to use EU-funding to co-finance ICT and broadband projects – a format that helps leverage other investment, sometimes in conjunction with other Financial Instruments.