In October last year, the Flemish minister of Innovation Philippe Muyters (of the N-VA party) announced his intention to provide the whole of Flanders with a superfast fibre-to-the home network. The minister considered the efforts of the main broadband-players (Proximus and Telenet) insufficient. Proximus and Telenet were at the time already upgrading their networks; Proximus wanted to provide 85% of companies and families with fibre-optic connections, with a speed of 1 Gb/s. Telenet had similar intentions. As a comparison to understand how fast these speeds actually are: the European goals for broadband speeds were 30 Mb/s (0.03 Gb/s) for all citizens in the European Union and 100 Mb/s (0.1 Gb/s) for at least 50% of the European citizens by 2020.
More speed, more coverage, open access, and lower prices
Muyters demanded even more speed (2,5 Gb/s), a higher coverage, access to their networks for other providers and lower tariffs. If Telenet and Proximus would not meet these demands, Muyters threatened to start the construction of a government-owned fibre network. As a result, Telenet and Proximus met the minister halfway. In July of this year, Muyters presented the agreements that were made between the government and the two telecommunications companies. According to Flemish newspaper 'De Tijd', the companies promised to offer all Flemish companies and families a connection with a download speed of at least 1 Gb/s. In accordance with Muyters’ demands, this should increase up to 2,5 Gb/s after 2020.
Will Flanders become the digital Eden of Europe in 2020? That remains to be seen. The agreements are comprised in Memorandums of Understanding (MoUs), whereas MoUs typically are not legally enforceable. So, what will come of the promises? Connection speeds of 1 Gb/s will likely indeed be achieved by 2020, as these speeds were part of the original network upgrade plans of Telenet and Proximus. However, it is highly unlikely that these speeds will be available for everyone.
Rural areas in particular are generally not sufficiently profitable for companies to invest in the installation of (fibre) networks that are able to achieve these speeds. Without governmental interventions such as statutory (universal service) obligations or some form of state aid, some rural areas may never get connected. This market failure creates a ‘digital divide’ between cities and the countryside that, ironically, will increase even further if the more densely populated regions of Flanders would actually receive connection speeds of 1 Gb/s or higher. These speeds would create a sharp contrast with areas that do not even receive a connection speed of 30 Mb/s. In Wallonia, the French-speaking part of Belgium, this problem is even more prevalent.
In 2016, minister of the Digital Agenda, Telecommunications and Postal services identified 39 municipalities as ‘White Zones’ with the help of the Belgian telecom regulator BIPT, which identified the internet coverage in Belgium. The coverage of each area is publicized on their website in the format of an interactive map. These White Zones are municipalities in which at least 40% of the population does not have access to connection speeds of 30 Mb/s. Fortunately, the same minister announced in June of this year that 23 of these municipalities no longer qualify as White Zones, as their coverage has been increased. Great news, but the previously mentioned interactive map of BIPT shows that on 01-03-2017 (which appears to be the most recent date this map has been updated), there was still a coverage of ‘only’ 95,5% of houses that have access to connection speeds of 30 Mb/s or higher. This means that there could still be about 500.000 Belgians who have no access to a ‘Next Generation Network’. Now that high speed Internet access has become an absolute necessity to participate fully in today’s information society, this poses a serious problem.
Could governmental (fibre) networks actually be the solution?
Although the promises of Proximus and Telenet have caused minister Muyters to abandon his plans for a government-provided broadband network, at least for now, the idea of a governmental (fibre) broadband network is still worthy of consideration. In fact, it appears to be the only solution if market providers cannot deliver their promises to guarantee fast Internet for all.
Precisely for this reason, the Rivierenland Region in the Netherlands sought and recently received permission from the European Commission for the construction of a passive (fiber or equivalent) broadband network on all NGA-White addresses.
This example shows that where market providers cannot sufficiently guarantee fast broadband access, (national, regional or local) governments in Belgium and elsewhere could indeed potentially solve the problem by constructing an open passive fibre network themselves. In order to achieve economies of scale, multiple local governments (such as municipalities) can also work together by establishing a joint entity or undertaking.
Such a measure could realise important benefits for rural citizens. Because governments can focus on merely covering costs, rather than trying to make as much profit as quickly as possible, governments could be able to provide broadband infrastructure in rural areas for the same or a very similar price as market providers offer in more densely populated areas. In contrast, due to the high cost-price of connecting rural addresses (longer distances of digging and laying cables per address) a market provider may have to charge additional fees, which in turn could result in insufficient demand and provide for an impossible business-case.
Would you like to know more about what governments can legally do to ensure sufficient broadband coverage and quality? Please be referred to our Broadband Fact sheet, or contact us.
This article was written by Cas Mevissen, in collaboration with Matthijs van Bergen.