- Only a quarter of the fibre funding has been paid so far
Regarding the expansion of high-speed fixed-line internet, only about a quarter of the allocated funds, which the federal government has set aside in recent years, has been utilized so far. According to the Federal Ministry of Digital Affairs, approximately 16 billion euros have been approved for broadband expansion since 2015 across various funding programs. However, only more than 4 billion euros of this have been drawn down. The remaining funds, totaling over 11 billion euros, are currently being used and continually drawn down by applicants, the ministry reports. "We assume that the funds approved so far will also be paid out in full."
The federal government's goal is to have fiber optic connections available everywhere people live and work by 2030. However, we are still far from achieving this. While providers like Deutsche Telekom and Deutsche Glasfaser are expanding significantly, they often bypass thinly populated areas due to economic unfeasibility. To prevent such rural regions from being left behind in adequate digital participation, the federal government provides funding.
Fiber optic offers the best data transmission
It's about internet with fiber optic cables laid directly to homes or apartments (FTTH, Fiber to the Home), considered the best technology for fast and stable data connections. Internet via telephone lines (DSL/VDSL) is a legacy model, and even the network via TV cables (HFC, Hybrid Fiber Coax) cannot keep up with pure fiber optic.
Federal funds are paid out based on construction progress, according to the Federal Ministry of Transport and Digital Infrastructure, led by Volker Wissing (FDP). "Therefore, the main part of the approved funds is only paid out several years after approval."
Before funds are paid out, various procedural steps must be completed. Municipalities must first conduct a market survey procedure before they can apply for funds. After approval, a tendering process follows, and only then can a company submit building applications.
Invoices are submitted based on construction progress
These are then checked and approved, after which construction can begin - the latter is not a given due to limited construction capacities. Invoices are submitted based on construction progress and then paid. It usually takes between two to four years from approval to the first payment, according to the ministry. The federal government is currently funding over 3,000 expansion projects, creating four million new fiber optic connections.
Funding for only a small part of the expansion
The Federal Ministry states that the Gigabit funding program specifically supports mostly rural, less densely populated, or structurally weak regions. They report being on the right track, with fiber optic connections already available for around a third of German households, with a strongly increasing trend. 90% of the expansion is done economically, without funding. "The current funding concept improves the balance between private-sector and publicly-funded expansion of telecommunications networks."
State funding is not without controversy, with many telecommunications companies viewing it critically. "The implementation of state-funded expansion projects takes significantly longer than economic fiber optic expansion due to high bureaucratic hurdles, with up to seven years being no rarity," says Sven Knapp from the Federal Association of Broadband Communication (Breko). "Nevertheless, the funded fiber optic expansion remains important for the supply of regions where economic expansion is not possible."
Recently, the federal government reduced subsidies for fiber optic expansion. Instead of three billion, only two billion euros will be available this year. The reason for the cut is the current federal budget constraints.
The ongoing challenges in utilizing the allocated funds for high-speed internet expansion, as discussed, make the widespread use of The Internet via fiber optic cables even more crucial for rural areas. Despite the criticism from telecommunications companies about the lengthy process of state-funded expansion projects, the funded fiber optic expansion remains vital for areas where economic expansion is not feasible.
