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Broadband networks - expansion strategies for Europe

What can Germany learn from abroad. A Bertelsmann Stiftung publication by Dr Bernd Beckert, Fraunhofer Institute for Systems and Innovation Research (ISI).


Digital developments increasingly determine the quality of life and social participation of all population groups today and in the future - be it through personalised health or education services, home office options or new mobility concepts. Especially for rural areas, digital technologies offer enormous potential for participation. Digitalisation is a great opportunity for value creation and the attractiveness of the regions. In particular, it can help to meet the challenges of demographic change.

However, for this potential to be exploited, all people in all regions must have access to digital developments. A basic prerequisite for this is the nationwide provision of high-performance internet. A look abroad and studies by various market observers show: The demand for fast internet connections in the gigabit range is growing rapidly. It is not only Industry 4.0 that is leading to new requirements in the commercial sector, but also in the private sphere, where changes in media use in particular are generating new demand.

However, transmission rates in the gigabit range can only be realised with the help of fibre optic technology. For this reason, Germany needs a future-proof, high-performance fibre optic network that can provide fast transmission rates in the gigabit range. A nationwide fibre-optic infrastructure is also the basis for the expansion of 5G mobile networks. In order for them to be able to forward data traffic for smart mobility and the Internet of Things, the mobile radio stations must be directly connected to the fibre optic network. However, Germany is lagging behind in fibre-optic expansion and is seriously underserved compared to other European countries, especially in rural areas.

By taking a targeted look abroad, this study examines which strategies and measures could accelerate the German broadband expansion. To this end, the expansion status and strategic framework in Germany are first presented and, in a second step, the expansion strategies of Estonia, Spain, Sweden and Switzerland are examined as a frame of reference. Through ambitious goals, a coordinated approach of all relevant actors as well as an active role of the municipal level, these countries are driving broadband expansion in a targeted and efficient manner. Finally, recommendations for action for Germany are derived from these foreign case studies.

This study is part of a series of publications as part of the Reinhard Mohn Prize 2017 on the topic "Smart Country - Vernetzt. Intelligent. Digital." The Bertelsmann Stiftung awards the prize annually on changing themes and thereby honours internationally renowned personalities who have taken their task of shaping society seriously and have committed themselves to social progress.

We would like to thank Dr. Bernd Beckert for the international comparison and the recommendations for action and Prof. Dr. Wolfgang Schulz and Dr. Martin Lose for the presentation of the legal framework.

Dr. Kirsten Witte Director Programm LebensWerte Kommune


High-performance broadband internet is not only a prerequisite for digital and thus social participation of all population groups. It is also important for value creation and the economic attractiveness of rural regions in particular.

But Germany is lagging behind in the expansion of high-performance broadband networks. Especially with regard to a fibre-optic infrastructure, which is considered particularly promising for the future, Germany is one of the worst-supplied countries in Europe - especially in rural areas. Against this background, this study deals with the question of which strategies can accelerate the expansion in Germany. It examines what we can learn from successful countries for strengthening momentum in Germany. Switzerland, Spain, Estonia and Sweden were selected as successful examples. They are better positioned than Germany in terms of broadband expansion, pursue new approaches and use strategies that can be transferred to Germany.

In Germany, broadband networks (especially VDSL and cable TV networks) are available over a wide area, but their performance is comparatively low. On the one hand, the dynamic of the expansion is hindered by different approaches of the federal government and the states. The federal government wants to achieve 50 Mbit/s downstream for all households by 2018 with a mix of technologies. Individual federal states are instead pursuing infrastructure targets for fibre expansion. On the other hand, Telekom's vectoring strategy is hampering the roll-out of fibre networks.

Estonia used its independence from the Soviet Union in the 1990s to redefine itself as E-Estonia with a strong focus on digitalisation. The small country is one of the frontrunners in the availability of fibre connections. This success was achieved through the development of an inter-municipal nationwide backbone in a public-private partnership, which also enables rural areas to be supplied with fibre.

Spain has seen a surge in fibre availability in cities since 2011. The reason for this success is, on the one hand, pro-competitive regulation. On the other hand, it is attractive bundling offers that boost competition. Another success factor is unconventional cooperation between telecommunications providers and citizens' associations. However, these expansion activities do not radiate out into the country.

Sweden has the highest utilisation rate of fibre connections in Europe. The high penetration of fibre, especially in urban areas, is due to the strong role and commitment of municipalities. They see broadband internet as part of the provision of public services. The municipalities have built out a large part of the network in Sweden as city networks in the open access model. In contrast to other countries, in Sweden the telecommunications monopolist also invests in Open Access networks. The expansion activities are coordinated in a broadband forum.

Switzerland is not a frontrunner, but it is above the EU and OECD average in terms of fibre availability. As a strategy for success, it is relying on a multi-stakeholder approach for a coordinated fibre roll-out. At a round table, the dominant telecom provider1 agreed with municipal utilities and other stakeholders on a cooperative roll-out based on a 4-fibre open access model. The strong role of the municipal utilities and the authority of the Swiss regulatory authorities made this approach possible.

Especially when it comes to public investment and state involvement, legal aspects set important framework conditions. For this reason, the study provides an overview of the legal framework in a separate chapter before deriving recommendations for Germany. Relevant here are EU state aid law as well as constitutional and simple legal requirements.

Finally, the study derives recommendations for Germany from the findings of the country studies. All the countries considered have set themselves more ambitious goals than Germany. Germany should therefore also set itself more ambitious goals at the federal level in order to push ahead with the expansion of fibre optics. In addition, the players involved must cooperate more and better coordinate their expansion activities. This is the only way to avoid, for example, the duplication of lines in the future. A multi-stakeholder approach like in Switzerland would be a helpful starting point.

Germany can also learn from the countries considered here at the state, district and municipal level: an inter-municipal fibre-optic network like the one in Estonia could also drive expansion in this country and lower connection prices. Clustering of expansion areas and better coordination of the municipalities would also contribute to this. In all the countries compared, municipalities play a much stronger role in broadband expansion. In Germany, however, there are still legal limits to the commitment of municipalities and districts, which would have to be changed accordingly.

Overall, it also makes sense in Germany to extend the principle of services of general interest to the provision of broadband internet. This is because the country studies have shown that it is often only through municipal involvement that competition is triggered and technical innovations are driven forward. In this way, the expansion of fibre optics in Germany can be accelerated - and this is necessary to meet the strong increase in demand for gigabit connections in the future.


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