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Author Topic: Study – Lack of State Aid Putting Future Broadband Ambitions at Risk  (Read 624 times)


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A new study from the Centre on Regulation in Europe (CERRE), which did a systematic analysis of all of the 157 broadband measures that have been notified to the European Commission by Member States (inc. UK) between 2003 and August 2018, has warned that the current level of public funding is “insufficient“.

At present the existing Digital Agenda for Europe (DAE) strategy, which was originally adopted in May 2010, is still trying to deliver on its promise of ensuring that very home in the EU can access a 30Mbps+ capable Next Generation Access (NGA) superfast broadband connection (plus 50% subscribed to a 100Mbps+ service) by the year 2020. The UK is closer than most to achieving this, but others are well behind.

More recently the EU has proposed a non-binding “Gigabit Society” commitment that would require member states to ensure that everybody could access a minimum speed of 100Mbps by 2025 (focus on FTTP), which is likely to be much harder to achieve outside of dense urban areas (in urban areas most EU countries, including the UK, can already deliver such speeds via existing cable or fibre-based networks and even 5G is a future option).

However the authors estimate that public funding from all sources to support broadband deployment in the period to 2020 amounts to around €7 billion per year. “At this rate it will take Europe nearly 30 years to meet its FTTH targets,” said the report.

They also found wide variations in public funding between Member States: in the period 2003-18 France spent around €215 per capita and Italy €145, whilst the majority of Member States spent less than €100 per capita and some less than €10. Overall 65% of public funding for broadband comes from Member States.

    Richard Feasey, CERRE Research Fellow, said:

    “We found that broadband infrastructure receives less than 5% of available European funds, despite being a strategic priority for Europe and for the Juncker Commission. Current public funding is insufficient if Europe is to achieve its Gigabit Society targets. It is also important that whatever public funds are allocated, they are also used efficiently.

    If broadband infrastructure deployment is a priority for the EU, we think that the Commission should also explore how to formalise its Digital Agenda and Gigabit Society targets, to give Member States stronger incentives to meet those targets.”

    Recommendations for EU and National Policy Makers

    1. Mobilise grassroots interests in public funding of broadband with an EU-wide competition for funds.

    2. Improve coordination between the European Investment Bank and the European Commission’s DG Competition to ensure that in each case the appropriate public funding instrument is used.

    3. Increase the share of European funds allocated to broadband.

    4. Revise the existing ‘Broadband State Aid Guidelines’ now to clarify key elements such as:

    · when and how public funds can be used if commercial operators have no plans to deploy Very High Capacity infrastructure;

    · require that State Aid can only be used once adoption rates for a new technology have achieved certain thresholds in areas where it has already been deployed by the private sector;

    · consider allowing higher prices for broadband services provided by publicly funded networks in order to reduce the cost to the taxpayer and increase the coverage that can be obtained;

    · explain how the universal service provisions of the new EU Electronic Communications Code will ensure that all users can benefit from affordable access to publicly funded broadband networks;

    · simplify the regime so that measures to protect competition align with those that already apply to commercially-funded networks under the Significant Market Power regime and ensure enforcement.

    5. Require Member States to provide more data to enable the evaluation of the effectiveness of State Aid measures. ‘Effectiveness’ should be measured by whether public funds achieve the goal of extending broadband services to the greatest number for the lowest cost to the taxpayer, and not simply in terms of competition or the time taken to approve the project.
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Re: Study – Lack of State Aid Putting Future Broadband Ambitions at Risk
« Reply #1 on: November 22, 2018, 07:07:44 PM »

Overall 65% of public funding for broadband comes from Member States.

The report says the other 35% comes from "European funds", which probably means Member States paying it into the EU budget.


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Re: Study – Lack of State Aid Putting Future Broadband Ambitions at Risk
« Reply #2 on: November 23, 2018, 12:35:22 AM »

It kinda has to, just as government grants come from taxpayers. Neither the EU or national governments have their own money, it all comes from individuals and companies.
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