In the struggle for the economic stimulus package, Transport Minister Scheuer wants to secure billions for a new state society. It is not only supposed to close dead spots.
If it is after the CSU Go then the federal government will this Tuesday with the stimulus package have plenty of money in hand for expanding the mobile network. The Bavarians want “a comprehensive 5G network throughout by 2025 Germany build up”, as the party convention recently decided.
The state should now take care of what is actually incumbent on the mobile phone companies that have acquired licenses for this purpose for a lot of money. “To do this, we want to equip the federal government’s new mobile communications infrastructure company with five billion euros – with the aim of providing ultra-fast mobile communications throughout Germany,” says the decision of the CSU.
The project caused astonishment in the industry, as the plans were once completely different. At the end of 2018, the CSU called for the first time to found a state company, which closes the white spots on the cellphone card in Germany. At this point it was all about completing the 4G network (LTE).
The aim is to “everywhere, where the economic expansion does not work or private mobile operators do not see themselves able to ensure a functioning supply”, the CSU regional group decided at its time at the New Year’s meeting.
That was the wish of the then new Federal Minister of Home Affairs Horst Seehofer. Finally, the result of the Bundestag election was under the banner of the regions left behind, which led to the success of AfD had contributed. Seehofer wanted at least the radio connections to be established quickly. The Transport Minister has to implement it Andreas Scheuer (CSU).
In the meantime, the CSU’s 5G plans are about much more. State society has not existed to this day, but there are countless requests from lobbyists for state aid to get out of the misery in the face of the economic downturn caused by the corona crisis.
Minister of Economy too Peter Altmaier (CDU), for example, in close collaboration with Scheuer, is demanding a purchase premium worth more than five billion euros for the car manufacturers, while the SPD this rejects and Finance Minister Olaf Scholz (SPD) even canceled a clarification talk with Altmaier last Friday. The SPD relies on a children’s bonus and would prefer to borrow from local authorities, which the Union rejects. A good 80 billion euros have to be distributed.
It is therefore unclear whether Scheuer will receive the hoped-for five billion euros at the coalition summit this Tuesday. On top of that, there is factual criticism of the plan to organize the expansion with a new state authority.
Scheuer insists on complete care
The 5G cellular standard promises at least modernity. And yet: there is a problem. The Federal Minister of Finance has had an economic viability study commissioned by the Federal Ministry of Transport since late April. It is intended to demonstrate that the establishment of a mobile communications infrastructure company (MIG) is advantageous in order to close the last gaps in the mobile network. The investigation is available to the Handelsblatt.
Telekom, Vodafone and Telefónica provided 99.2 to 99.5 percent of households with mobile telephony, as well as 90 percent of the area, as the “German Partnerships” determined for the ministry. But Scheuer insists on a complete supply. Therefore, the “106,120 households” that are still missing should use “approx. 5000 mobile phone locations ”can be connected to the 4G network. There is no mention of the 5G network plans.
The federal government may only set up a company in private legal form if there is “an important interest” that “cannot be achieved better and more economically in any other way”.
Since the ministry has had the plan to found its own GmbH for some time, the result of the investigation turns out accordingly: The white spots should not be stopped by a lean support program, which is controlled by a few officials in a department of the ministry. Not even through a department in the area previously responsible for mobile communications Federal Network Agency or from the already existing federal broadband office, which implements the corresponding funding program.
In the case of an award to external parties, there is talk of “considerable award and time risks” in which Federal Network Agency be it difficult to recruit staff. Therefore, an official solution is not recommended anyway, even if the costs are “about the same”, says the report.
The GmbH will initially receive 97 full-time positions. At least that’s what the investigation says. But there has long been talk of “150 to 200 employees”, as the telecommunications expert of the SPD parliamentary group, Gustav Herzog, explains. “The effort is out of proportion,” said the coalition partner.
Accordingly, the Federal Ministry of Finance and the Chancellery have raised concerns. For example, the 50-page study did not take into account the previous expertise and work of the Federal Network Agency in the field of mobile communications.
The officials in the finance department advocate a simple funding program, for which 1.1 billion euros have already been earmarked and with which the mobile operators are to be motivated to set up masts in the uneconomical corners of the Republic. So it was actually agreed in the government’s cellular strategy.
Accordingly, the GmbH should create an infrastructure atlas, advise municipalities, identify federal properties on which masts can then be erected, monitor the expansion and determine how faster construction can take place. “Together with the measures already taken, coverage of 99.95 percent of households and area coverage of 97.5 percent is to be achieved,” the Ministry of Transport said at the time.
The officials in the finance department are now asking why such a large company is needed, which should then also have “at least two managing directors”, as stated in the draft social contract that is available to the Handelsblatt. There are also three supervisory boards and an advisory board.
Six departments are also planned as well as branches (“regional representatives”) in the federal states. In addition, the GmbH should act “indefinitely” and not close its gates again when all the masts are up.
Minister Scheuer, however, plans long-term. The GmbH should only be dissolved once the 5G network is in place. Nobody knows how long this will take. With a new GmbH, Scheuer can also take away competencies from the Federal Network Agency. It has long been a thorn in the side of the minister, most recently in the award of 5G frequencies.
At that time, the CSU wanted to provide every successful bidder with tough supply requirements. The network agency, however, issued less stringent conditions. The argument: Companies must also be able to set up and operate a network that pays off.
Now Scheuer counters with his GmbH, which is not only supposed to close the last gaps in the 4G network, but also to advance the comprehensive 5G expansion at an early stage.
How this can be done is not yet known. After all, the mobile phone companies bought licenses for a lot of money and linked them with the right to expand the network under clear conditions – to supply 99.7 percent of households with LTE (4G) by 2024 and also to advance 5G expansion.
But Scheuer does not want to wait for a nationwide 5G network, for which far more masts will be necessary than today and, moreover, the business models are missing. While the industry wants to set up local 5G networks on its own premises, so far only the association of the automotive industry has demanded radio networks nationwide and threatens not to bring autonomous and connected cars to the market beforehand.
Sluggish network expansion
It currently takes a good two years in Germany for a radio mast to be planned, approved and set up. Broadband expansion is also sluggish. “The MIG should only distract from the fact that there is no progress with the broadband expansion,” it says critically CDUPoliticians.
The digital politicians of the CDU, organized in the “cnetz”, therefore demand a restart for the broadband expansion. A good four million houses are still supplied with at least 50 megabits per second (Mbit / s), although there has been a funding program since 2015 and all households should be connected by the end of 2018.
Of the promised six billion euros from the funding program, just 500 million euros were called up. “If the previous funding strategy is continued, even the target of 50 Mbit / s set for 2018 will become unreachable,” they warn. They call for no longer to examine individual projects at great expense, but instead to grant flat-rate grants so that the expansion goes ahead quickly, especially in the corona crisis.
But the Ministry does not contest that. Rather, the GmbH should be settled as a subsidiary of the toll operator Toll Collect, which has now been nationalized. This would give the Minister of Transport direct access – and would help Toll Collect.
Business is said to soon break business if the company does new competitors with the European toll system EETS how the fuel card providers DKV and UTA enter the market and collect the truck toll. There would only be a new field of activity for the employees.
Revised funding program
Scheuer wants to announce all of this at a new mobile phone summit. He had to cancel the meeting planned for April because the mobile phone providers had run into a storm against the planned funding program, through which a total of 1.1 billion euros should be invested in the expansion.
It was about responsibilities between municipalities and mobile operators, about the question of operator or grant models. Scheuer now wants to talk to the industry on June 16 and present a revised funding program and plans for MIG. A draft summit declaration, which is available to the Handelsblatt, states that MIG should “assume a central hinge function”. The Federal Network Agency is said to play virtually no role in mobile communications. It is also planned that the network operators will disclose all their expansion plans and data and that the provider with the lowest subsidy requirement per mast should be awarded the contract.
Meanwhile, negotiations with the Ministry of Finance are “in the final vote,” as coalition circles said. The aim is to bring the concept to the Committee on Budgets in the last week of the meeting, at the beginning of July. Then the roughly planned budget for society should be increased. The management of the GmbH alone is earmarked for 50 million euros a year.
The funding for the construction and the mobile communications strategy are to flow from the digital fund, which the federal government intends to use to fund broadband expansion and digitization in schools. The five billion for 5G expansion are therefore necessary.
If the CSU asserts itself with its demand for five billion euros extra, then there would either be “to the Telekom networks, Vodafone and Co. another large 5G state network – or gold-plated 4G masts, “warns SPD politician Herzog before the coalition meeting on the economic stimulus package.