Broadband rollout is hugely important for Baden-Wuerttemberg and its many small and medium-sized enterprises (SMEs). A high-performance digital infrastructure on a gigabit scale is an essential prerequisite for the digitalization of industry and the economy. But this is exactly what is missing at present: the supply of medium (up to 16 Mbps) and higher broadband (30-100 Mbps) in the state is relatively good, but future-proof gigabit fiber-optic networks are missing so far. However, these are exactly what is required for highly complex digitalized processes in industry and the economy – too low broadband could have a detrimental effect on the competitiveness of companies in the future. In addition, fiber-optic networks are necessary for the future rollout of 5G mobile networks.

The study “A gigabit network for Baden-Wuerttemberg – current status and perspectives of fiber-optic rollout” was produced with the support of the Baden-Wuerttemberg Stiftung, and aims to identify options for a rapid rollout of broadband based on optical fiber. 30 fiber-optic projects in the state were studied and six of them analyzed in detail as case studies. A key finding of the study is that there is no way around fiber-optic cables in the long term and even current interim solutions such as VDSL vectoring are rapidly reaching their limits. At present, only 1.9 percent of households in Baden-Wuerttemberg have a direct fiber-optic connection.

Dr. Bernd Beckert, who led the study at Fraunhofer ISI, makes three clear recommendations on how to obtain faster internet connections based on optical fibers: “First, better coordination of private-sector and public-sector rollout projects. Second, continued consistent federal state support with a focus on fiber-optic technology. Third, more broadband expertise in municipalities, districts and at federal state level that is incorporated directly into possible rollout projects.” Beckert emphasizes that fiber-optic rollout pays off, especially from an innovation policy point of view: Regions with broad gigabit internet coverage are more innovative and have high economic growth, because new technologies, applications and digital business models can develop in parallel.

Consistent continued state support with a special focus on fiber-optic technology is needed for the rollout to progress. A clear political commitment to fiber optic and addressing the issue of broadband in districts, towns and communities sends the right signal here. Unlike other German states, Baden-Wuerttemberg has consistently relied on an operator model from the outset that has proven a success. In this model, local authorities deploy the network but then lease out its operation. Since the effects only become apparent in the longer term, the state should also support projects in regions with extremely poor internet access following the “profitability gap model”. This means that commercial network operators – usually Deutsche Telekom – are subsidized to expand into regions that are not economically attractive. Switching to end-to-end fiber-optic cables should be planned from the start.

Finally, the expertise for fiber-optic rollout should be strengthened in districts, municipal authorities and at federal state level, because there is still a lack of experts for gigabit rollout in local government. Expanding the federal state’s clearing house or strengthening existing training and study programs could help here.

The Fraunhofer Institute for Systems and Innovation Research ISI analyzes the origins and impacts of innovations. We research the short- and long-term developments of innovation processes and the impacts of new technologies and services on society. On this basis, we are able to provide our clients from industry, politics and science with recommendations for action and perspectives for key decisions. Our expertise is founded on our scientific competence as well as an interdisciplinary and systemic research approach.