Not everyone has the opportunity to get fast Internet. Market parties sometimes find the investment too risky. The government mistrusts state aid. Ten municipalities in Gelderland took matters into their own hands.
In the past, training was not the first point of attention among fruit growers in Gelderland. In the 19th century, family farms primarily had to work. The schools were far away, in cities like Gorinchem or Den Bosch. The connection with the rest of the Netherlands was also difficult. The train only replaced the ferry to Bommelerwaard late. The first traffic bridge was only built in 1933. Now the difficult connection plays again: with the Internet.
Local banks, farms, greenhouse construction, and tree growers all need fast internet. Educational institutions, which can improve the level of education, need it. The residents need it. But digging up miles of dirt and laying miles of cables in hard-to-reach areas is an investment companies are reluctant to make.
Ten municipalities decided that the change was necessary. The good internet, they reasoned, is a utility like the road network or the sewage system. Everyone should have it. This path led the municipalities to Brussels, Luxembourg, a stubborn province, a hostile market, and the court of Arnhem. In the end only seven congregations remained. “We had to speed up,” says Zaltbommel councilor Kees Zondag (Finance, ZVV), a member of the executive board of the joint regulation UB Rivierenland. ‘Now we are called Fruitdelta’, he clarifies. “You have to do something about lobbying and branding if you want to shed a few bucks in The Hague.”
“Sometimes it looked like Alice in Wonderland”
Cable worth 37.5 million euros had to be buried. How do you finance that? Sunday explains, from time to time he doesn’t like the idea of market forces. ‘The outdoor areas are not interesting for market parties, because they want a return. If the distances are too great, the construction costs per address are sometimes twenty times higher and then you, as part of the market, will not be able to do it.’ They said market parties: it should be for everyone and the public. They didn’t want that.
A visit to Luxembourg to obtain European funding ends in disappointment. The interest rate proposed by the European Investment Bank is more than double what the municipalities can obtain from the local bank. Without financing and without interest from the market parties: they are on their own.
State aid seems to be the only option. They need the approval of the European Commission for that. They send extensive documentation to Brussels to demonstrate market failures so that they can provide state aid. Market players are not interested and the result is that for some areas there is no realistic prospect of a broadband network. The province of Gelderland thought that this Brussels process, a ‘notification process’, was ridiculous. Home Affairs, the ministry responsible for communication with the European Commission, was helpful. But Economic Affairs had never heard of a notification process.
Contact with Brussels was at times “remarkable”, says Stan Herms, who started as project leader for the joint scheme in 2014, then became mayor and is now secretary-director. ‘We had already carried out a series of market inquiries and asked the parties what they planned to do about the upgrade. Their reactions were unclear. We had everything done and documented at the zip code level. But at a certain point the Commission asked us to consult the market once again. That takes weeks. We were quite surprised and did not get a clear answer to the question why it was necessary. We did, but sometimes it seemed kind of Alice in Wonderland†
Read the rest of this article in Domestic Governance Issue 10 (click here for the digital magazine).