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In keeping with the ambitious digital agenda goals set in the EU 2020, the European Commission has approved, under the EU guidelines for state aid to broadband, the use of over €1.8 billion public funds for broadband development to support economic recovery, inclusive growth and the long term competitiveness of the EU. The public funds are aimed to ensure that all citizens have access to high speed Internet access in the European Union, including in rural or remote areas.

Commission Vice-President in charge of competition policy Joaquín Almunia commented: "Smart investments into high and very high speed broadband infrastructures are crucial to create jobs, increase economic performance and to unlock the competitive potential of the EU in the long term. The Commission is committed to help EU countries to accelerate private and public investments in this sector."

In 2010, the Commission adopted a record number of 20 decisions covering aid for broadband development in, among others, Catalonia, Finland and Bavaria (the complete list can be found here) authorising the use of over €1.8 billion of public funds for broadband development. This will potentially generate up to €3.5 billion of investments in the sector. The approved aid in 2010 is more than four times the amount allowed in 2009 (see table below).

The national public support was in line with the September 2009 Broadband Guidelines (see IP/09/1332, MEMO/09/396 and MEMO/10/31), which set out in detail the Commission's approach to state aid in this field. Public support is necessary to ensure universal coverage of broadband infrastructure thus avoiding a digital divide between urban and rural or remote areas.

The Commission has set out ambitious targets for broadband development in its EU 2020 strategy, in the Digital Agenda (see DAE webpage, IP/10/581, MEMO/10/199, MEMO/10/200) and further clarified the possible use of public funds in this sector in the Broadband Communication (see IP/10/1142, MEMO/10/426 and MEMO/10/427).

These targets can only be reached if EU and public funds complement private investments to extend current generation broadband and very high speed broadband coverage to areas where market operators are unlikely to invest on commercial terms in the near future. Adequate and affordable broadband services can bring great economic and social benefits for people living and working in such areas, for instance by providing them with the possibility of teleworking, access to e-health, e-government and e-learning services.

When assessing public support to broadband networks, the Commission makes sure public support does not crowd out private investment and allows alternative operators to get effective and non-discriminatory access to the subsidised broadband infrastructures, thereby increasing the choice and quality of the services available to citizens.

The approach has ensured that broadband networks are built in areas where nothing was available before and are made accessible to competing Internet service providers on non discriminatory terms. Thereby, state aid helps households and companies in rural areas to benefit from state-of-the-art similar services at similar prices as those established in urban areas.

The Commission will further encourage the smart use of public funds in line with the Broadband Guidelines to bring high speed and very high speed Internet access to as many Europeans as possible, as quickly as possible – to help them benefit from the advantages of a knowledge-based society.

Besides national funding, for the 2007-2013 financing period of the EU Structural Funds, a total of €2.3 billion was allocated to broadband infrastructure investments and € 12.9 billion to information society services; and a further €360 million through the Fund for Rural Development was used for broadband funding. The EIB invested in 2009 €2.3 billion (since 2000 a total of €12 billion) in broadband infrastructures.>

Approved State aid for broadband per year in the EU

Watch out cable, Verizon (NYSE:VZ) is going to continue to expand the speed of its Fiber to the Premises (FTTP)-based FiOS service throughout 2011.

Evidence of this ongoing drive was seen at Verizon throughout 2010 despite the fact that the RBOC declared in late 2009 that it would focus the majority of its FTTP build out on remaining markets and those where it had recently established video franchise agreements.

Among the notable developments of Verizon's ongoing speed drive in 2010, included the introduction of a 150/35 Mbps speed tier for bothresidential and later SMB customers and the no contract service options.

Available on either a contract or non-contract option, the 150 Mbps service tier is obviously a way to defend itself against cable's ongoing speed movement via its DOCSIS 3.0 migration on not fiber, but its existing HFC network.

Although it will take time before the 150 Mbps tier is available throughout Verizon's entire FiOS footprint, the continual focus on upping speeds is all about providing enough headroom for new applications at the home and business.

In anticipation of this year's Consumer Electronics Show (CES), a Multichannel News report emerged that Verizon plans to launch a trial with a number of New Jersey homes for its Home Monitoring and Control service. Among other things, the new service would allow FiOS users to remotely lock or unlock doors, adjust thermostats, power and turn off and on lights via smartphone, PC or FiOS TV widget. Along with home monitoring, Verizon plans to also display a premium HD videoconferencing service for FiOS using Cisco's umi device.

Likewise, the 150 Mbps tier will also resonate with the diverse SMB market (remote radiology clinics, law firms and graphic designers) that require large amounts of bandwidth, but up till now have had little choice other than purchasing expensive T1 circuits or switching to cable.

Of course, the introduction of the 150 Mbps speed tier is only the tip of the iceberg in Verizon's speed quest.

In 2010, Verizon conducted a FierceTelecom's 2011 Predictions: Verizon continues to up FiOS speed ante – FierceTelecomhttp://www.fiercetelecom.com/story/fiercetelecoms-2011-predictions-verizon-continues-fios-speed-ante/2011-01-01?utm_medium=nl&utm_source=internal#ixzz1Ajl8oKGa

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The total number of fixed broadband connections worldwide will pass 500 million by the end of this year and will continue to grow to 720 million by the end of 2015, according to a study by Analysys Mason. Fixed broadband will account for 62 percent of the 1.16 billion broadband connections available worldwide by the end of 2015. Developed regions (Central and Eastern Europe, developed Asia-Pacific, North America and Western Europe) offer limited growth opportunities in terms of new business. The report forecasts that fixed broadband net line additions will grow at a CAGR of 3.9 percent during 2009-2015 in these regions. By contrast, fixed broadband net line additions will grow at a CAGR of 13.7 percent in the emerging regions (Central and Latin America, emerging Asia-Pacific, the Middle East and North Africa and sub-Saharan Africa).

Central and Latin America will have the highest CAGR of all regions in terms of fixed broadband connections at 15.4 percent between 2009 and 2015. However, emerging Asia-Pacific will account for most of the net line additions, growing from 117 million lines at the end of 2009 to more than 250 million by the end of 2015. Emerging regions will generate 28.5 percent of worldwide fixed broadband retail revenue by 2015, up from 17.2 percent in 2009. Developed markets accounted for 67 percent of fixed broadband connections at the end of 2009. This will fall to 54 percent by the end of 2015, the researcher said. The Middle East and North Africa's fixed broadband market will achieve reasonable growth during the forecast period. As a result, it will account for an increasing, albeit small proportion of worldwide fixed broadband revenue to 2015. Its share of worldwide access retail revenue will grow from 2.3 percent in 2009 to 3.4 percent in 2015. In sub-Saharan Africa, mobile services will continue to be crucial to the development of the region's broadband market. The number of mobile broadband connections in the region exceeded that of fixed broadband connections in 2009. By 2015, Analysys expects that fixed broadband will account for 9 percent of broadband connections in the region.

Verizon's (NYSE: VZ) new 150/35 Mbps speed FiOS Fiber to the Premises (FTTP) speed tier is yet another way the service provider is set on one-upping cable's DOCSIS 3.0 efforts.

Initially targeting the 12.5 million residences that the FiOS network passes, Verizon will also extend the service to SMB customers by the end of the year.  

Under the current pricing scheme, Verizon will offer four options. Customers can purchase the new speed tier with wireline voice service for $194.99 with a one-year contract, while FiOS Internet with phone service on a month-to-month basis is $209.99. When purchased on a one-year contract without wireline voice, customers will pay $199.99, while FiOS Internet without voice on a month-to-month basis will cost $214.99 per month.

Of course, the new 150 Mbps service comes with the typical installation fee of $49.99, while customers that want a month-to-month contract will have to pay a $79.99 installation fee.

Other than saying it would be initially available to a large piece of its subscriber base, John Schommer, director of broadband product development for Verizon, would not specify how many subscribers would be eligible for the service. "Inside of the CO itself, you'll deploy an Optical Line Terminal (OLT) and as long as there's a GPON terminal available there, everyone in the wiring center can receive the new speed," he said. "We don't want to give out the number, but it's a vast majority of our customers can receive the service on day one."

The installation of the new service, even for BPON-based customers, will be relatively quick for existing customers because the fiber drops are already there. If a customer is still on the BPON network, Verizon will just swap out the Optical Network Terminal (ONT) on the side of the house with a new GPON-based ONT.   

One of the biggest changes with the new speed tier is that it will leverage an Ethernet instead of Multimedia over Coax (MoCA) to connect to the home network's Actiontec Broadband Home Router (BHR).

"The one difference with this is we've actually gone faster than MoCA has developed in this timeframe," Schommer said. "Some of the next version of MoCA will handle speeds that are slightly higher than this, but we're going for Ethernet."  

MoCA 1.1 currently provides 175 Mbps of throughput while version 2.0 can deliver up to 1 Gbps in particular configurations. After placing the GPON ONT on the side of the user's home, Verizon will then run Ethernet cable back into the BHR.

With the Actiontec broadband home router (BHR), which includes a GigE interface and 802.11n, Verizon claims it can deliver 300 Mbps throughput on a wired connection and over 100 Mbps via a WiFi connection on the BHR.

Even though the 150/35 Mbps tier won't appeal to every user, Schommer said "there's always a rush for people that demand the highest available speeds, so we anticipate a bit of a rush this week, but we expect that to slow down over time."

Obviously, the new service is all about trumping cable. Comparable options from Cablevision offer 101 Mbps download capabilities, while Comcast and Time Warner Cable offer 50 Mbps.

With a substantial base of GPON-based equipment already installed in their network, Verizon's 150 Mbps service follows its XG PON trials where it demonstrated the ability to deliver a 10 Gbps/1Gbps connection to a home in Taunton, MA.

Schommer said that while the XG PON trials are encouraging, Verizon will migrate to the next stage as needed. "Verizon will increase speeds as it sees penetration increase over time, we will offer the higher speeds obviously and as those speeds increase, we'll look to deploy the next-generation of the GPON terminals," he said. "I don't see foresee that being in the immediate future, but rather a year two or three down the road."  

But if you're not ready for the 150/35 Mbps service, fear not. Verizon will continue to offer its 50/20 Mbps, 25/25 and 15/5 speed tiers on a stand-alone basis. It will also offer FiOS Internet speeds of 35/35 Mbps, 25/25 Mbps and 15/5 Mbps in double-, triple- and quadruple-play bundles.

Argentine newspaper La Nacion reports that President Cristina Kirchner has launched a national connectivity plan to bring broadband access and free digital television to parts of the country not yet served by existing networks. The project, known as ‘Argentina Conectada’, will involve the deployment of a 26,000km backbone by state-owned satellite company Arsat in rural and unprofitable areas to complement the existing infrastructure of the country’s telecoms operators. Planning Minister Julio de Vido said that the first 10,000km of fibre will be rolled out in the most remote parts of Argentina. Also under the plan, the first five of 47 digital TV antennas have been launched in the metropolitan area of Buenos Aires and Resistencia in the province of Chaco, with the remaining 42 to be inaugurated by mid-2011, boosting coverage to 75% of the population. The remaining 25% will be covered by satellite TV. The implementation of the Argentina Conectada project will require government investment of around ARS8 billion (USD2.02 billion) over the next three years.

Jamii Telecom of Kenya has signed a Sh1.2 billion ($14.8 million) deal with ZTE Corp. to connect 100,000 homes with a fiber to the home (FTTH) network, reports Business Daily. Jamii asserts it will be the first Internet service provider (ISP) in Kenya to deploy an FTTH network.

The firm will target households in Karen, Lavington, Parklands, Kilimani, Kileleshwa, Lang’ata, South B, Nyayo Estate Embakasi, Gigiri, and Runda in Nairobi in the first phase, Business Daily adds. Jamii Telecom subsequently will connect Kisumu, Nakuru, Mombasa, Eldoret, and Nyeri in the second and the third phases, which are to be carried out in the next two years.

The European Commission today launches a public consultation on the "Europe 2020 Project Bond Initiative" which aims at boosting the funding of projects with long-term revenue potential in line with the Europe 2020 policy priorities. This follows the announcement made by President José Manuel Barroso in his State of the Union Address1. Its objective is to help the private project companies to attract capital market funding from investors such as pension funds and insurance companies. The Europe 2020 Project Bond initiative has been identified in the Annual Growth Survey as a priority measure to enhance growth.

In the launch of this initiative, European Commissioner for Economic and Monetary Affairs Olli Rehn said: "Financial instruments should play a larger role in the funding of public-interest projects. Today public budgets are in need of consolidation. But at the same time, we need to promote sustainable growth in Europe. EU budget resources must be used more effectively so that such projects attract capital market financing. This is why we are joining forces with the European Investment Bank in this Project Bond Initiative."

European Investment Bank President Philippe Maystadt said: "Infrastructure finance in Europe has suffered since the financial crisis and banks face new constraints on long term lending. Project bonds could be a way to attract capital from other investors, such as pension funds and insurance companies, and be a useful addition to traditional financing options."

In the transport area, the assessment of the investment plans of the Member States reveals that around € 21.5 billion per year is needed in the post-2013 period to remove significant bottlenecks, construct missing cross-border links, and interconnect transport modes.

The stakeholders' consultation paper has been prepared under the guidance of President Barroso and in close collaboration with Vice-President Siim Kallas (responsible for Transport), as well as Vice-President Neelie Kroes (Digital Agenda) and Commissioners Günther Oettinger (Energy) and Janusz Lewandowski (Budget).

Huge infrastructure investment needs in the this decade
Over the next decade, record investment volumes in Europe's transport, energy, information and communication networks will be needed in order to underpin the Europe 2020 flagship actions. Developing smart, upgraded and fully interconnected infrastructures will foster the completion of the internal market. Preliminary estimates point to investment needs of €1.5 to 2 trillion for Trans-European Transport Networks, the energy sector and information and communication technologies. These needs, combined with the fact that government budgets face severe constraints, make it crucial to foster the participation of the private sector in the financing of infrastructure projects.

Europe 2020 Project Bond Initiative
The Project Bond Initiative should provide EU support to private "project promoters" issuing bonds to finance in particular infrastructure projects. This should help them attracting capital market financing from institutional investors. The key role of the Commission and the EIB will be to absorb part of the risk of a project. Technically, the instrument will improve the rating of the senior debt issued by the the project entities. This will ensure that such debt can be placed as bonds with institutional investors. As the EU participation will be capped, there will be no unlimited or contingent liabilities for the EU budget.

The Initiative could be available to projects that are assessed to be economically and technically feasible, cost-effective and that have a prospect of financial viability.

Options for the increased use of financial instruments for EU policy goals, as well as for their streamlining within the next multiannual financial framework for the period after 2014, were presented in the EU Budget Review. 2

What is next?
The consultation is open for comments from today. The deadline for contributions is 2 May 2011. On 11 April, the Commission, together with the EIB, will organise a conference on the Project Bond Initiative which will feed into the consultation process. Following the completion of an impact assessment, the Commission will bring forward a proposal for the implementation of the Europe 2020 project Bond Initiative.

Links
Digital Agenda:

http://ec.europa.eu/information_society/digital-agenda/index_en.htm

DG ECFIN:

http://ec.europa.eu/economy_finance/consultation/index_en.htm

SPEECH/10/411 of 7.9.2010.

COM(2010) 700 final, 19.10.2010.

REDWOOD CITY, Calif., March 10, 2011 /PRNewswire/ — According to a newly published report by Dell'Oro Group, the trusted source for market information about the networking and telecommunications industries, the PON market posted record revenues of almost $800 million in the fourth quarter of 2010. The report shows that the continued upward trajectory of the market was driven largely by growing fiber deployments in China.

"We estimate that China accounted for more than half of total GPON revenues in the fourth quarter," said Tam Dell'Oro, President of Dell'Oro Group. "Chinese operators initially utilized EPON when fiber deployments began a couple of years ago, but have increasingly utilized GPON over the last several quarters. We now expect that GPON will become the leading PON technology in China within the next few years due to its higher bandwidth capabilities and functionality," Dell'Oro added.

The top three GPON vendors in the fourth quarter were Huawei, Alcatel-Lucent, and Ericsson. While Chinese vendor, Huawei, remained the top PON supplier in its domestic market, non-Chinese vendors Alcatel-Lucent and Ericsson also derived substantial portions of their fourth quarter GPON revenues from shipments to China. Alcatel-Lucent benefited from being a leading supplier for Verizon's FiOS, which also accounted for a significant 15 percent of total GPON revenues.

Read more: PON Market Reached Another Revenue Milestone in Fourth Quarter, According to Dell'Oro Group – FierceTelecom http://www.fiercetelecom.com/press_releases/pon-market-reached-another-revenue-milestone-fourth-quarter-according-dello?utm_medium=nl&utm_source=internal#ixzz1GILbwLj7

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