EC revises broadband network State aid rules
December 14, 2022
By Colin Mann
The European Commission has adopted a revised Communication on State aid for broadband networks (‘Broadband Guidelines’). The revised Broadband Guidelines set out the rules under which the Commission will assess State aid measures notified by Member States to support the deployment and take-up of broadband networks in the EU.
The new rules contribute to the EU’s strategic objectives of ensuring gigabit connectivity for everyone and 5G coverage everywhere by the end of the decade, which is essential to achieve the digital transition of the Union. The new Guidelines will enter into force the day following their publication in the Official Journal of the European Union, which is expected in January 2023.
The revised Broadband Guidelines will provide an up-to-date framework to support the digital transition and reflecting technological, regulatory and market developments. In addition, the new rules reflect the current EU policy priorities as set out in the Gigabit Society Communication, the Shaping Europe’s Digital Future Communication, the Digital Compass Communication, as well as the Digital Decade Policy Programme recently adopted by the European Parliament and the Council.
In particular, the revised Guidelines:
- Align the threshold for public support to fixed networks with the latest technological and market developments. These changes will allow Member States to invest in areas where the market does not and is not likely to provide end-users with a download speed of at least 1 Gbps and an upload speed of at least 150 Mbps. Any State investment will have to at least triple the available download speed and, in competitive areas, provide at least 1 Gbps download and 150 Mbps upload speeds.
- Introduce a new assessment framework for the deployment of mobile (including 5G) networks. The new Guidelines will enable Member States to support mobile networks where the investment would not otherwise have been undertaken by private operators and is not guaranteed by other measures, such as the coverage obligations attached to the use of some radio spectrum.
- Explain how public support can be used to incentivise the take-up of broadband services. By addressing barriers to digital connectivity and increasing access to broadband services, take-up measures aim at promoting digital inclusion and societal resilience. The revised Guidelines spell out the compatibility criteria for social and connectivity vouchers to incentivise consumers and business to use broadband services.
- Simplify certain rules in order to facilitate the practical application of the Guidelines and to cut red tape for companies and public authorities. For example, the revised Guidelines allow Member States to require operators to provide the most appropriate set of wholesale access products depending on the competitive situation in a given area and the demand for specific products. This will reduce costs of such products, while preserving competition and preventing lock-in effects.
- Clarify and provide further guidance on certain key concepts, which are important for the State aid assessment carried out by the Commission, such as mapping, public consultations, selection procedure, wholesale access pricing, and claw back mechanisms.
- Update the criteria used for balancing the positive impact of the aid against its negative effects on competition and trade. The assessment will take account of different possible effects, such as the contribution to the EU’s digital and green transition objectives.
The Broadband Guidelines set out conditions under which State aid granted by Member States for the deployment of broadband networks and the take-up of available broadband services may be considered compatible with the Single Market. The new rules aim at helping Member States meet the ambitious EU connectivity targets, at the least possible cost for taxpayers and without undue distortions of competition in the Single Market.
The adoption of the revised Broadband Guidelines follows an evaluation of the existing rules conducted in 2020 and a consultation of interested parties on the proposed revised text, including Member States, businesses, interest groups, companies, NGOs, and citizens. The review builds on the Commission’s experience gained in the application of the previous rules as reflected in its case practice in recent years.
The provisions of the Broadband Guidelines are complemented by the General Block Exemption Regulation, which lays down ex ante compatibility conditions on the basis of which Member States can implement State aid measures without prior notification to the Commission. In 2021, the Commission adopted an amendment of the GBER to facilitate certain recovery-related aid measures, which includes important provisions on fixed and mobile networks as well as measures to incentivise the take-up of broadband services. The current revision of the GBER includes technical adjustments to ensure alignment to the revised Broadband Guidelines.
The revision of the Broadband Guidelines complements other on-going initiatives, such as the review of the Broadband Cost Reduction Directive, replacement of Recommendation 2010/572/EU of 20 September 2010 on regulated access to Next Generation Access Networks and Recommendation 2013/466/EU of 11 September 2013 on consistent non-discrimination obligations and costing methodologies to promote competition and enhance the broadband investment environment, and the earlier revision of the Recommendation of Relevant Markets in 2020.
“The revised Broadband Guidelines adopted today are a major step towards a successful European digital transition,” stated Margrethe Vestager, Executive Vice-President in charge of competition policy. “They will make it easier for Member States to support the deployment of performant broadband networks in insufficiently connected areas. This will benefit both consumers, businesses and the public sector. By reducing the digital divide, the new rules will further contribute to correcting social and regional inequalities across the EU.”