EC Adopts Rules For Broadband Funding

The European Commission has officially adopted guidelines on how member states should subsidise the roll-out of broadband networks.

In a statement released this week, the EC said it had adopted the guidelines which member states were asked to comment on early this year. The EC said it is attempting to provide a clear framework for government’s to contribute to roll-out of broadband without distorting competition amongst private network providers.

“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,” said competition commissioner Neelie Kroes. “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 make a distinction between competitive “black” areas, where no state aid is needed and underserved white” or “grey” areas in which government aid may be justified. “A number of crucial safeguards (such as detailed mapping, open tender, open access obligation or technological neutrality and claw-back mechanisms) are laid down in the Guidelines in order to promote competition and avoid the ‘crowding out’ of private investment,” the EC said in a statement.

Last week BT announced it is testing technology which uses “bonding” to extend the range and speed of broadband, to help deliver the government’s 2Mbps target.

The EC claims that Europe is among the top broadband regions of the world; more than 100 million residents have broadband access and leading countries’ penetration is in the order of 40 percent. The European Council has earmarked €1.02 billion for investment in broadband in Europe.

In May, the EC invited individual states and stakeholders to comment on the draft guidelines which it said should apply to state funding of next generation access networks.

In June, the commission announced it is investigating the UK’s proposed £6 levy on fixed telephony lines designed to fund further broadband expansion in the country. The EC is determining whether it contravenes European guidelines on state support of internet infrastructure. As part of the Digital Britain report, the government said it is planning to introduce a 50p-a-month tax on phone lines, to create a Next Generation Fund to pay for faster broadband across Britain.