Fiber optic promoted too much? – Provider for reducing bureaucracy instead of more subsidies

Tursky announced that a new funding call would be announced in November. The exact volume has not yet been determined, “it will certainly be several hundred million euros. A total of EUR 420 million would be available in the 2024 budget. “That is 171 million more than initially thought, because we have already invested more money in the first distribution of the second broadband billion and because we are now planning a new call for November.” All told, the financial framework now amounts to 1.25 billion euros until 2027 intended for the second billion broadband.

The industry apparently does not want financing at all
The trade association “Internet Offensive Austria” does not want this money at all. At the beginning of the year, 900 million euros had already been allocated for fiber optic expansion – only 10 percent of this had been used and 90 percent of the projects would not be completed until 2027. The following subsidies would go to a market that no longer has construction capacity; competition for labor and machinery will drive up construction costs. At the beginning of October, the sector had already proposed an end to the financing of broadband expansion.

Instead, expensive bureaucracy must be reduced. The criticism is that people are waiting up to 18 months for simple building permits for urgent expansion work. It would also be better to stimulate demand so that the available connections are used, because the costs of actually connecting the cable to the house are very high.

State Secretary rejects criticism
Tursky rejects the criticism. “Something like that is said very quickly if you have the right market power.” There is a huge demand for fiber optic connections. “We have now finally achieved a speed of expansion in Austria that was unfortunately not there before.” Currently, approximately six billion euros are being privately invested in expanding broadband.

Tursky does not see that there is an overheated civil engineering market. ‘Currently I find that the opposite is the case.’ We can hear from all states ‘that the construction sector, which is currently under great pressure, is succeeding in shifting capacity from construction to civil engineering.’ Therefore, we will not give up, but “continue to accelerate the expansion of broadband.” This can also be seen as economic support for the construction sector. He sees the sector’s contradiction “more as an attempt by providers to further expand their current market power.” Traditionally, providers have also benefited from financing tenders, but especially the municipalities, which then became owners of the infrastructure, and the local cable network operators.

Financing “where there is market failure”
Financing will only be provided “where there is a market failure, that is, where no one is expanding privately because it is not profitable,” the State Secretary emphasizes. In Vienna, Salzburg and Tyrol the supply of gigabit-compatible fixed Internet connections up to the property line is already very high, and in the large federal states such as Lower Austria or Styria it is even lower. These are not always fiber optic, but “the future must be fiber to the home”.

This does not mean that these households actually use broadband internet; for many, the contracts are too expensive or the connection from the property line to the home is too expensive. “It is of course relevant for us to first make it theoretically available, and in a second step to increase the acceptance rate.” Austria is doing poorly “because we have such good mobile internet.” 38 percent of Austrian households would still use mobile internet solutions at home.

100 million euros for broadband in schools
Research and education will be financed with more than 100 million euros in the field of digitalization. The money goes, among other things, to broadband connections for schools and WLAN in classrooms, but also to devices.

As reported, billions in funding will also flow as part of the “Chips Act.” The EU wants to double the European market share in semiconductor production from 10 to 20 percent by 2030. “This means a fourfold increase in chip production in Europe,” Tursky explains. Thanks to the major players Infineon in Villach and AT&S in Leoben, Austria is now the fourth chip country in Europe in absolute figures. The Chips Act is an EU financing instrument that allows national states to support the development of semiconductor production in Europe with a total of EUR 40 billion. Austria will use EUR 3 billion of this to realize investments of EUR 7 billion by 2030. “This is not EU money, this is just permission to advertise,” Tursky clarified. Of the 3 billion, 160 million euros has initially been reserved for 2024, and half a billion for 2027.