household notes - Bundle shortens Gigabit-Subsidy
The Bund is reducing its annual subsidies for fiber-optic buildout in the countries by one billion Euro. Instead of the planned three billion Euros, only two billion Euros will be available in 2024. This information comes from a letter of the Federal Transport Ministry obtained by the German Press Agency.
Bavaria's Finance Minister Albert Füracker (CSU) protested: "The Bund is cutting a billion Euros for Germany's digital future in this year. That is absolutely irresponsible." The Federal Ministry does not expect any effects on the pace of the gigabit buildout. The Broadband Communications Association - the interest representation of telecommunications network operators - considers the reduction in state gigabit funding sensible.
Gigabit Program heavily demanded
The fiber-optic subsidies are intended for the particularly expensive network buildout in rural regions, where telecom providers have to lay kilometers of cable for relatively fewer households. The funding has been in high demand from local authorities since the start of the program and is almost chronically oversubscribed. The telecom providers have criticized their industry association several times that the subsidies are too high.
Budget constraints at the Bund
The reason for the reduction is the current budget constraints of the Federal Government. The Federal Ministry justifies the short-term withdrawal of funds this year with the receipt of gigabit funding in the next year: "It is good news that we can continue to support the fiber-optic buildout strongly next year despite the tight budget situation," it says in the Berlin letter. "For this reason, it was necessary to adjust the funds that were available for 2024 to around two billion Euros."
How much gigabit money is planned for 2025 is not entirely clear from the letter: "In addition to around 900 million Euro change approvals and the KfW program, the Federal Government brings a billion Euro for new approvals of broadband construction projects in the framework of the Gigabit funding 2.0 into the budget," it says there. Bavaria's Finance Minister Füracker fears a drastic reduction also in the next year.
Füracker: "Impossible planning for municipalities"
Instead of the 460 million Euros that the state government had calculated, only 295 million Euros remain available for the Free State according to the minister's words. For North Rhine-Westphalia, 230 million Euros are still planned, for Baden-Württemberg 215 million. "The behavior of the Bundes on the part of the Bundes is almost speechless," criticized the CSU politician. "Such a reduction, quasi retroactively, makes any planning for our municipalities impossible."
The Federal Transport Ministry contradicts the concerns: "The gigabit buildout is progressing as quickly as ever," emphasized a spokesperson. "We see a high dynamics in the market. 90 percent of the expansion is now taking place self-financing." The funds could therefore be used more targeted and adjustments could be made. "The Bund is investing billions in the broadband buildout in the future." We are on a very good course to reach all expansion goals by 2030.
Goal for 2030 is the comprehensive coverage of all households and businesses.
The Bundesverband Breitbandkommunikation (Breko) argues that the Gigabit-Funding procedures are taking too long and too much state money is being spent. "Reducing the funds for Gigabit funding is understandable in the context of the strained budget situation," explained Hauptstadtbuero-Leader Sven Knapp. "We are even advocating for a faster fiber-optic rollout, as there may be less funding for areas where a significantly faster, self-financed rollout is possible."
- Despite the reduction in fiber-optic subsidies by the Bund, amounting to a billion Euro, Bavaria's Finance Minister Albert Füracker finds it irresponsible to cut funds for Germany's digital future.
- The Federal Ministry of Transport justifies the withdrawal of one billion Euros in subsidies for 2024 due to budget constraints, assuring that funding will be strongly maintained in 2025.
- Telecommunication providers have often criticized the high subsidies for fiber-optic buildout in rural regions, as it demands laying kilometers of cable for relatively fewer households.
- The German Press Agency reported that the Federal Transport Ministry is reducing its annual subsidies for fiber-optic buildout from three billion Euros to two billion Euros in 2024.
- Albert Füracker, Representative of the CSU, and the Broadband Communications Association consider the reduction in state gigabit funding sensible, but Bavaria's Finance Minister fears a drastic reduction also in the next year.
- German Telecom and several local authorities have been heavily demanding the fiber-optic subsidies intended for rural regions since the start of the program, which is often chronically oversubscribed.
- The eventual goal of the German government is to provide comprehensive coverage of all households and businesses with fiber-optic networks by 2030, ensuring a smoothly running digital future for Germany.
