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Paying for fast Internet

Olaf Krieger / nzAugust 20, 2014

Germany's federal government wants to provide faster Internet connectivity for its citizens, but it hasn't put nearly enough money on the table. A more serious financing plan is needed, says DW's Olaf Krieger.

https://p.dw.com/p/1CyD7
Fiber optic cables
Image: picture-alliance/dpa

A fast and reliable Internet infrastructure is as economically important today as a well-built road network. But outside the big cities, Germany's Internet is slower than in some of its competitor nations. Many villages and towns lack fiber-optic cables, so download speeds are much slower than in better-equipped cities.

Fast and reliable Internet connectivity is all the more important because many of Germany's famed Mittelstand companies - small or medium-sized enterprises that are world leaders in niche markets - are based in small towns and villages. Many say that slow Internet connections are a business disadvantage.

Olaf Krieger
DW's Olaf Krieger

The German government knows this, and says it wants to bring the nation's Internet infrastructure up to speed as part of its "Digital Agenda." Alexander Dobrindt, the federal minister of transport and digital infrastructure, has promised lightning-fast Internet connectivity, with download speeds of at least 50 megabits per second.

Dobrindt wants the entire country covered by the new high-speed infrastructure by 2018.

It sounds like a good plan, but it will be very expensive. Telecommunications firms say there are too few customers in the villages to make it commercially viable to lay fiber optic cables - so federal money will be necessary to pay for them.

Two billion euros won't pay for ten billion euros' worth of cable

Technical experts at telecommunications giant Deutsche Telekom have estimated that at least 10 billion euros of federal money will be needed in order to reach 90 percent of the population with high-speed Internet - and that's far more money than the government has said it's willing to spend.

Moreover, 90 percent coverage still leaves the remaining 10 percent unserved. Deutsche Telekom estimated that it would cost taxpayers an additional 15 billion to reach the last 10 percent of users in the thinly populated countryside.

Dobrindt has proposed raising money for the Digital Agenda by auctioning off a new round of broadcast frequencies for mobile phones. But according to Lars Klingbeil, a parliamentarian who sits on a committee working on the Digital Agenda, the auction will probably only bring in around 2 billion euros.

Klingbeil says at least 4 billion euros will be needed to expand high-speed Internet between now and 2017. And he has urged Dobrindt to find more money.

Dobrindt's current plan is at best half-hearted. It won't be enough to match the high-speed Internet standards of countries like South Korea or the US - nor those of some of Germany's next-door neighbors. In the countryside of Provence, France, or on the island archipelago between Finland and Sweden, reliable high-speed Internet access is already taken for granted.