Spain pours 200 million into broadband development

In August 2010, the Spanish government approved the allocation of €200 million to fund the expansion of broadband coverage and investment in next-generation access (NGA) networks. Despite having a digital strategy since 2006, Spain is only now releasing a plan (Plan Avanza 2) focused on stimulating investment in NGA. The relatively small fund is balanced by numerous other initiatives being taken by the Ministry of Industry, Tourism and Trade (MITYC). However, Spain will have to hurry up if it is to achieve its ambition to be a “leading European knowledge economy.”
On 8 August 2010, the MITYC announced a €200 million plan (Plan Avanza 2) to develop broadband coverage and infrastructure. The plan offers financial aid to two different types of project: those aimed at expanding broadband coverage at the “basic speed” (1Mbps) to all areas; and those with speeds of above 50Mbps.
Plan Avanza 2 is a continuation of Plan Avanza (launched in 2006 as Spain’s Information Society Strategy), which mainly focused on promoting innovation in the ICT sector, supporting SMEs in the integration of ICT, and investing in the digital content sector. With Plan Avanza 2, Spain starts to catch up with other digital strategies launched during the last two years by focusing on expanding the coverage of “basic speed” to a majority of the 3% of the population without broadband coverage, and most importantly by promoting investment in NGA.
However, despite addressing the matter of incentives for investment, Plan Avanza 2’s fund allocated to the deployment of fiber is small. In France, the cost of providing FTTH to 80% of households is likely to be over €15 billion, and Spain has poor FTHH coverage that currently only reaches approximately 2% of households.
Luckily, Plan Avanza 2 is not the only initiative addressing NGA. Spain is far from having finalized its solutions for incentives for investment in NGA, unlike France (see “Fiber beyond the city: France’s approach takes shape”), where the framework for the rollout of high-speed broadband in high-density areas has been finalized and attention is now being turned to low-density areas.
However, a belated effort is better than no effort, and the government seems to have realized it has to compensate for its delay. Apart from the already mentioned measures, the MYTIC is currently working on a regulatory framework that will promote NGA deployment by setting relevant rules for new infrastructure projects and common telecoms infrastructure in buildings.
Additionally, it is currently drafting recommendations for the elimination of obstacles to deploying next-generation access solutions (both fixed and mobile), such as high deployment costs, an unfinished regulatory framework, and the lack of coordinated rules.
As for the promotion of broadband ubiquity, Plan Avanza 2 is also complemented by other initiatives from the Spanish government, including:
  • allowing the 800MHz band to be used to provide mobile broadband services
  • the proposal to incorporate broadband access at a minimum speed of 1Mbps in the current universal service obligation (USO)
  • consulting on the re-farming of the 900MHz and 1800MHz bands, and the allocation of the 800MHz and 2.6GHz bands.
The spectrum auctions for the 800MHz, 900MHz, 1800MHz, and 2.6GHz bands that can be used for mobile broadband services are expected to start by 2011.
The extension of the scope of the universal service might change depending on the outcome of the EC’s final decision concerning its proposed modification of the Universal Service Directive (USD), expected to be published by the end of 2010.
Nonetheless, all these recent initiatives can only improve Spain’s broadband penetration (20.2%), which sits below the EU average of 24.8%.