The €120m WiFi marketing scam from the European Union

Who am I and why should you care about my opinion? Well, for starters, I’ve written a master thesis in wireless connectivity and spent my entire professional career in the telecom industry. Five years at equipment giant Ericsson, two years at NYC based startup Payfone and the last five years I’ve been building Instabridge, a community for free WiFi in emerging markets which has raised over $8m.

So far, I have not seen a single critical voice raised towards the €120m “free” WiFi program from the EU. Unfortunately, the project is wrong on so many levels I don’t even know where to start and while I have low hopes, I hope this essay can kick start a discussion around the program and in a best-case scenario, cancel it all together.

Free wifi in public spaces from the European Union — would be great if the premise was true

It’s a scam from the beginning: The EU is not building free WiFi

The whole premise is based on a lie. European countries are not getting free WiFi from the European Union. They are getting a voucher to buy WiFi equipment and installation for up to €150,000. Only problem is, as people in the telecom industry know: equipment is cheap (just ask Ericsson or Cisco how selling hardware is working out for them). Service, maintenance, and backhaul (getting the routers powered and connected to the internet at sufficient speed) is where the money is at.

See it as if you pay for college yourself and once you’re done, your parents pay for the taxi ride to your graduation party and then go around boasting how they paid for your education.

It solves the wrong problems

A problem with only allowing a specific type of internet access (public WiFi) is that it doesn’t address the real costs. The cost of buying a router and screwing it to a lamp pole is not what limits WiFi accessibility. Large parts of Europe lack decent infrastructure such as a well built out low cost fiber network.

What will happen is that well-developed countries that needs this the least (Sweden, Germany, France) that already have a large fiber network will be the largest beneficiaries of this. And at the same time the countries that needs it the most will not be able to benefit and would be better of spending money to lay more fiber in the ground.

It’s wasteful

Take a step back and think about what the program actually is:

• The EU receives membership fees from states
• The EU gives the money they just received back to said states if they use it to buy WiFi routers and brand them as WIFI4EU

As astute readers will know, taking money from member states and then giving it back to member states once they write an application for it sums up 93% of the EUs €500bn budget, so why single out this initiative in particular? That’s a good question and while I don’t have a great answer the general idea of the EU’s many grants is to allocate resources from rich members states to poor ones (at least in theory), which this one does not — it’s the other way around. Countries like Romania will be paying for free WiFi in the UK.

Now add the bureaucracy that is set up to manage this: a custom-built web portal, staff to evaluate the applications (only certain cities are eligible and only certain areas of cities) and marketing material (of course translated into all 24 officially recognised EU languages).

I cannot stress the above point enough. The EU isn’t exactly known for conserving resources — remember, this is an organisation that until recently couldn’t decide where to put its headquarters so they ended up spending €200m per year to move it back and forth between Strasbourg and Brussels (The Telegraph: “The farce of the EU travelling circus”)

There are other hidden costs too that are potentially huge. Small cities without sufficient knowledge are going to go down a rabbit hole of providing “free” WiFi without realising the hidden costs. Three years later they end up realising they have been tricked into paying for an EU-branded WiFi network.

If it’s not clear already: this is a marketing scam

There are so many more unanswered questions around this project it’s impossible to cover them all in one article. For example: Should the EU even be a connectivity provider in countries with low cost ISPs and a (semi) well-functioning telecom market? If you want more connectivity, is WiFi the best access technology in all member states? (Both questions merit longer responses but in case you’re wondering, the answers are no and no).

Regardless, I’ve already made my point. Nobody in their right mind, that wanted to increase internet speeds and connectivity in the EU would do it the way the EU has done it. Both on a fundamental and philosophical level, the program is wrong, wasteful and doesn’t solve the right problems.

Here’s a radical idea that would not only allow member states to provide great connectivity (the stated purpose of the program) but also reduce any unnecessary bureaucracy in the process: lower the membership fees with €120m and let each country choose themselves how they want to spend the money: digging down fiber, providing free WiFi or if they have bigger problems than providing WiFi: use the money for something radically different.

Pro tip: don’t hold your breath for that happening anytime soon as it doesn’t solve the true purpose of the program.

The true purpose is to get 8,000 WiFi networks branded as WIFI4EU. Oh, and did I mention the WiFi networks have to be in city centers to make them as visible as possible? Funny how that works.

The true purpose is not to lower the cost of connectivity. It’s a marketing to scam using €120m to market the EU as someone who provides free WiFi while scamming small cities and municipalities to foot the real cost.