The European Parliament has approved a scaled-back investment package for digital services and broadband infrastructure which it hopes will help the continent's ailing economies to modernise and become more competitive.
The package is part of a larger plan called Connecting Europe Facility (CEF) that was proposed in 2011, and aims to improve the continent's transport, energy and digital networks.
CEF's digital component originally had a total budget of €9.2 billion (A$14.1 billion). Of this, €7 billion (A$10.7 billion) was originally earmarked for high speed broadband at 100 megabit per second or more investment.
However, the funding was pared back severely last year thanks to deteriorating economies in the EU, and now stands at just €1 billion (A$1.53 billion).
Now, just 15 per cent of the funding will go towards broadband infrastructure, with the rest aimed at digital services projects.
Neelie Kroes, the European Commission's vice president for the digital agenda, who championed the investment, remained optimistic it would make a difference.
“We need to combine investments like the ones voted on today with new rules so that we build a truly connected continent. When we have seamless networks and services that everyone can use, that’s when we’ll know that Europe is ready to compete for decades to come in the global economy,” Kroes said.
Telcos and utilities, as well as cooperatives and construction firms, will be tapped by the EU for broadband infrastructure project proposals, along with public authorities.
EU hopes the funding for broadband infrastructure will help support investment in less attractive parts such as non-urban and rural areas, but also to put competitive pressure on telcos and internet providers to invest more in their own networks.
Digital service infrastructure projects such as e-health, public high-speed backbone networks across Europe, electronic identity and procuremenet and smart grids can also apply for grants from the CEF, the EU has said.