EU cuts risk delaying broadband roll-out - telecoms lobby

BRUSSELS Tue Feb 5, 2013 9:06am EST

BRUSSELS Feb 5 (Reuters) - Proposed cuts to European Union funding for telecoms infrastructure would delay development of high-speed broadband networks, hitting economic growth, industry lobby group ETNO said.

The group, whose members include Deutsche Telekom and Telecom Italia, opposes a reduction in telecoms funding that would result from European Council President Herman Van Rompuy's spending proposals to get a deal on the EU budget.

Neelie Kroes, the EU commissioner dealing with digital technology, supports a proposed 50 billion euro ($68 billion) "Connecting Europe Facility" for cross-border infrastructure projects under the EU's next long-term budget for 2014-20.

Of this, 9.2 billion euros are earmarked to expand broadband and digital networks, amid concerns Europe is falling behind Asia and the United States.

But Van Rompuy has recommended a 25 percent cut in the budget, together with reductions in other spending, in a bid to get the 27 EU countries to agree on the seven-year budget of nearly 1 trillion euros ($1.4 trillion).

Cutting broadband spending would hurt the EU's long-term growth prospects and deter private investors, ETNO said on Tuesday in a letter to Van Rompuy, EU Commission President Jose Manuel Barroso, European Parliament President Martin Schulz and Ireland, which holds the rotating EU presidency.

"This would be a short-sighted decision since broadband networks constitute a critical infrastructure for the competitiveness of our economy," ETNO chairman Luigi Gambardella wrote.

The European Commission - the EU's executive arm - wants all Europeans to have access to broadband by 2013 and at least 50 percent of European households to be able to subscribe to internet access above 100 Mbps (megabits per second) by 2020.

ETNO's other members include Dutch provider KPN, France Telecom's Orange unit, Telefonica, Telekom Austria, Telenor and TeliaSonera . ($1 = 0.7376 euro) ($1 = 0.7376 euros) (Reporting by Foo Yun Chee)

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