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Brussels, 17 th September 2009

State aid: Commission adopts Guidelines for broadband networks

The European Commission has adopted Guidelines on the application of EC Treaty state aid rules to the public funding of broadband networks. The Guidelines provide a clear and predictable framework for stakeholders and will help Member States to accelerate and extend broadband deployment. The Guidelines also contain specific provisions concerning the deployment of Next Generation Access networks, allowing public support to foster investment in this strategic sector without creating undue distortions of competition. The Guidelines take account of comments received during a public consultation (see IP/09/813 ).

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."

Over the past five years, the Commission has developed a coherent and consistent practice with regard to state support to rollout of broadband networks by adopting more than 40 individual decisions. The new Guidelines build on this experience.

In particular, the Guidelines explain how public funds can be channelled for the deployment of basic broadband networks as well as Next Generation Access ("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 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 the situation of NGA networks (whose deployment is still at an early stage) 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. 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.

Although investments for high speed and very high speed 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 roll-out of broadband networks while at the same time preserving the market dynamics and competition in a sector that is fully liberalised. 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.

In May and June 2008, the Commission publicly consulted all stakeholders and held a multilateral meeting with Member States on 22 June 2009. Almost 100 comments were submitted by Member States, incumbents, alternative operators, internet service providers or civil society organisations. Member States and other stakeholders supported the Commission's decision to issue Guidelines and welcomed the new rules for NGA networks.

Investments in broadband networks also form a crucial part of the European Economic Recovery Plan (see IP/08/1771 ), for which the Commission has provided €1.02 billion through the European Agricultural Fund for Rural Development (EAFRD) for developing broadband internet in rural areas (see IP/09/142 and MEMO/09/35 ). The Guidelines will help public authorities to invest these and other funds fairly and effectively and thereby contribute to the short-term economic recovery and long term competitiveness of Europe.

The guidelines are available at:

See also MEMO/09/396 .

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