Broadband guidelines: Revised state aid rules for broadband networks

In mid-December 2022, the European Commission adopted the revised Communication on State aid to promote broadband networks (“Broadband Guidelines“). The new Broadband Guidelines set out the framework conditions according to which EU Member States must design future state aid measures to be notified to the Commission to support the expansion and use of broadband networks. The update of the existing regulations focuses on supporting the achievement of the EU’s strategic objectives with regard to technological, regulatory and market-related developments. In addition, the new rules reflect the EU’s current policy priorities as set out in the Communication on the Gigabit Society, the Communication on Shaping Europe’s Digital Future, the Communication on the Digital Compass and the proposal for the Digital Decade Policy Program recently adopted by the European Parliament and the Council. The new guidelines will enter into force the day after their publication in the Official Journal of the European Union. This is expected to happen in January 2023.

The revised guidelines provide for the following changes in particular:

• The threshold for publicly funded fixed networks will be adjusted. On the basis of the amendments in question, Member States may invest in areas where the market does not provide and is unlikely to provide end-users with a download speed of at least 1 Gbit/s and an upload speed of at least 150 Mbit/s in the future. Any public investment must at least triple the available download speed and provide a download speed of at least 1 Gbit/s and an upload speed of at least 150 Mbit/s in competitive areas.
• A new assessment framework for the roll-out of mobile networks (including 5G networks) will be introduced. According to the new guidelines, Member States may support the roll-out of mobile networks even if private operators would not otherwise have made the investments and the investments are not linked to other measures such as the use of certain radio frequencies and associated coverage obligations.
• The newly introduced measures to promote broadband use also aim to remove connectivity barriers and improve access to broadband services. The revised guidelines therefore now set out the conditions under which social and connectivity vouchers may be used to incentivize consumers and business users to use broadband services for the first time or to supplement them.
• Individual provisions will be simplified in order to facilitate the practical application of the guidelines and reduce the administrative burden for companies and authorities. For example, the revised guidelines allow Member States to require operators to provide wholesale access products (e.g. through specific bitstream parameters or the provision of VULA access) depending on the competitive situation in a given area and the demand for certain products. This reduces the costs of such products. At the same time, these measures help to maintain competition and avoid lock-in effects.
• The guidelines also provide additional guidance on certain key terms that are relevant for the Commission’s state aid assessment. This includes clarifications and assessment frameworks on the terms mapping, public consultations, tendering procedures, wholesale access prices and clawback mechanisms.
• In addition, the criteria for weighing up the positive effects of the aid against its negative effects on competition and trade have been updated. The assessment now also takes into account possible effects of the measures in terms of their impact on achieving EU digital and green transition objectives.

Further details and questions on the application and changes to the broadband guidelines are answered by the European Commission in a FAQ.