EU publish Guidelines for State aid to deploy broadband networks

The European Commison (EU) has issued some guidelines for applying state aid to support and accelerate the existing broadband networks as well as boost the growth in high-speed, fibre based, next generation broadband in its Member states.

Deployment of traditional broadband (ADSL, cable and wi-fi) and next generation (fibre) broadband will get as much as €300bn investment in the next ten years, according to Neelie Kroes, Competition Commissioner. However, the major part of these investments (by private companies) would rather go to urban places than rural locations, thus public funding has an important role to achieve ‘the widest possible access to broadband in under-served and non-profitable areas’.

Primarily, State aid measures should aim at higher levels of broadband coverage and penetration. This can be done by an effective state intervention such as funding with projects to deploy broadband services in rural or remote areas which usually do not attract private investors. However, Kroes also pointed out that public authorities should carefully consider all the aspects, before granting state aid, as the public funds ‘should not crowd out or delay private investments.’

Finally, the future broadband infrastructures should be open to all broadband service providers, as it would rapidly improve broadband penetration and healthy competition.

In a recent report, it was stated that on-going growth in next generation broadband services and the competition among service providers would lead to greater ‘digital divide’ in a country or a region, meaning a majority of broadband users will be left behind in terms of super-fast broadband access.