Guidelines on State aid for broadband networks

SUMMARY OF:

Communication – Guidelines on State aid for broadband networks

WHAT IS THE AIM OF THE GUIDELINES?

They provide guidance on how the European Commission will apply European Union (EU) State aid rules when assessing the aid which EU Member States provide to support the deployment and take-up of broadband networks.

The rules are set out in Article 107(2)(a) and (3)(c) of the Treaty on the Functioning of the European Union.

KEY POINTS

The guidelines distinguish between, and apply specific compatibility conditions when assessing aid to:

• fixed access networks;
• mobile access networks; and
• backhaul networks (necessary for both fixed and mobile networks).

The Commission considers the following when conducting compatibility assessments under Article 107(3)(c).

• The contribution to the economic development of certain activities or areas, especially:
  • the economic activity as identified by the Member State;
  • incentive effect – the beneficiary must do something it would not have done otherwise;
  • respect of EU law – the measure must comply with EU legislation.
• The balance between positive and negative effect of the aid on the internal market, especially whether the aid is:
  • positive, i.e. contributes to reducing the digital divide or social or regional inequalities, while limiting risks of crowding out private investment;
  • needed, i.e. leads to clear benefits or remedying a market failure, identified by public consultation and mapping of target areas in areas where private investment is lacking, such as remote or low-population-density areas (Annex I details best practices);
  • appropriate, i.e. is more suitable than administrative or regulatory measures,and ensures significant improvement compared to existing situation;
  • proportionate and limited to the minimum necessary, i.e. the same change in behaviour could not be achieved with less aid and fewer distortions, the aid is granted through a competitive selection procedure, it ensures technological neutrality, it makes use of existing infrastructure, it fosters competition through wholesale access conditions, it provides for adequate clawback mechanisms,and it ensures accounting separation;
  • transparent, i.e. Member States, stakeholders, the public and the Commission can access its details.

Member States:

• are encouraged to involve national regulatory authorities in the design, implementation and monitoring of the measures;
• must consult national regulatory authorities on wholesale access products, conditions and pricing, and on existing infrastructures;
• may consult national competition authorities;
• may establish centres such as broadband competence offices to help public authorities design state support for broadband networks.

Transparency rules require Member States to:

• publish on the Commission’s transparency award website or on their national or regional ones:
  • the full text of the aid scheme decision,
  • details of every individual award above €100,000 (Annex II);
• ensure easy access to information on their comprehensive State aid websites and make it available for at least 10 years;
• submit reports to the Commission annually on each aid measure they approve and biennially on their key features (Annex III).

The transparency rules require the Commission to publish on its website links to national and regional measures.

Annex IV lists four typical investment models: gap funding, support in kind, direct investment and concessionaire.

The Commission may require an independent expert to evaluate aid schemes after their implementation to ensure they have not distorted competition or trade. Evaluations are mandatory for schemes with novel characteristics or involving aid over €150 million in 1 year or €750 million in total.

The guidelines replace those from 2013 (see summary).

FROM WHEN DO THE GUIDELINES APPLY?

They have applied since 1 February 2023.

BACKGROUND

Connectivity is a fundamental building block of digital transformation. It is vital for economic growth, innovation and social and territorial cohesion.

The new rules contribute to the EU’s strategic objectives of ensuring gigabit connectivity for everyone and 5G coverage everywhere in the EU by the end of the decade. To achieve this, investment, primarily private, is needed. This may be complemented by public funds.

The rules reflect the priorities set out in the gigabit society communication, the shaping Europe’s digital future communication, the digital compass communication and the 2030 Digital Decade policy programme (see summary).

To prevent State aid distorting trade or the internal market, it is banned by Article 107(1). Exceptions are provided for in Article 107(2) and (3) and in the general block exemption regulation (Regulation (EU) No 651/2014 – see summary).

For further information, see:

• State aid: Commission adopts revised State aid rules for broadband networks – press release (European Commission).

MAIN DOCUMENT

Communication from the Commission – Guidelines on State aid for broadband networks (OJ C 36, 31.1.2023, pp. 1–42).

RELATED DOCUMENTS

Decision (EU) 2022/2481 of the European Parliament and of the Council of 14 December 2022 establishing the Digital Decade Policy Programme 2030 (OJ L 323, 19.12.2022, pp. 4–26).

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of Regions – 2030 Digital Compass: the European way for the Digital Decade (COM(2021) 118 final, 9.3.2021).

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of Regions – Shaping Europe’s digital future (COM(2020) 67 final, 19.2.2020).

Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions – Connectivity for a Competitive Digital Single Market – Towards a European Gigabit Society (COM(2016) 587 final, 14.9.2016).

Consolidated version of the Treaty on the Functioning of the European Union – Part Three – Union policies and internal actions – Title VII – Common rules on competition, taxation and approximation of laws – Chapter 1 – Rules on competition – Section 1 – Rules applying to undertakings – Article 106 (ex Article 86 TEC) (OJ C 202, 7.6.2016, pp. 90–91).

Consolidated version of the Treaty on the Functioning of the European Union – Part Three – Union policies and internal actions – Title VII – Common rules on competition, taxation and approximation of laws – Chapter 1 – Rules on competition – Section 2 – Aids granted by States – Article 107 (ex Article 87 TEC) (OJ C 202, 7.6.2016, pp. 91–92).

Commission Regulation (EU) No 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty (OJ L 187, 26.6.2014, pp. 1–78).

Successive amendments to Regulation (EU) No 651/2014 have been incorporated in the original text. This consolidated version is of documentary value only.

last update 15.03.2023