EC adopts revised State aid rules for broadband networks

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
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.

CT Bureau