European Commission issues aid guidelines for broadband networks

SEPTEMBER 17, 2009 -- The European Commission has adopted guidelines for the application of EC Treaty state aid rules to the public funding of broadband networks. The guidelines are intended to provide a clear and predictable framework for stakeholders and help member states accelerate and extend broadband deployment.

SEPTEMBER 17, 2009 -- The European Commission has adopted guidelines for the application of EC Treaty state aid rules to the public funding of broadband networks. The guidelines are intended to provide a clear and predictable framework for stakeholders and help member states accelerate and extend broadband deployment.

The guidelines also contain specific provisions concerning the deployment of next-generation access (NGA) networks, with an eye toward allowing public support to foster investment without creating “undue distortions” of competition. The guidelines take account of comments received during a public consultation.

Access the guidelines.

Competition Commissioner Neelie Kroes said, "The guidelines offer member states and public authorities a comprehensive and transparent tool to ensure that their plans for state funding of broadband are compliant with the EU's state aid rules. The guidelines will therefore facilitate the widespread roll out of high speed and very high speed broadband networks, enhancing European competitiveness and helping to build a knowledge-based society in Europe."

The guidelines explain how public funds can be channeled for the deployment of basic broadband networks as well as NGA networks to areas where private operators do not invest. The guidelines outline the distinction between competitive areas ("black" areas) where no state aid is considered necessary and unprofitable or underserved areas ("white" and "grey" areas) in which state aid may be justified, if certain conditions are met. This distinction is then adapted to NGA networks (whose deployment is still at an early stage, in the EC’s view) by requiring member states to take into account not only existing NGA infrastructures but also concrete investment plans by telecom operators to deploy such networks in the near future. Safeguards (such as detailed mapping, open tender, open access obligation or technological neutrality, and claw-back mechanisms) are laid down in the guidelines to promote competition and avoid hindering private investment.

According to the EC, while investments for broadband networks should primarily be driven by private operators, state aid can play a crucial role to extend broadband coverage in areas where market operators have no plans to invest. The primary objective of the Broadband Guidelines is to foster a wide and rapid rollout of broadband networks while at the same time preserving the market dynamics and competition in a sector that is fully liberalized. The guidelines also ensure specify that whenever state aid is granted to private operators, the aid must foster competition by requiring the beneficiary to prove open access to the publicly funded network for third party operators, the EC concludes.


More in FTTX