1 State aid control in the broadband sector Oliver Stehmann Click to edit subtitle Digital Agenda Assembly – workshop 5: Financing and facilitating broadband projects

Background   81 decisions since 2003   Most of them in white areas

3 Introduction  Need for national schemes No local notifications No local notifications  Revision of Guidelines Public consultation (August 2011) Public consultation (August 2011) Deadline: September 2012 Deadline: September 2012

4  The Broadband Guidelines

5 Critical issues  Private investment versus fast roll-out Risk of crowding out private investment Risk of crowding out private investment Risk of state determining the choice of technology Risk of state determining the choice of technology  Foster competition  Efficiency versus competition Economies of scale, scope and double marginalisation Economies of scale, scope and double marginalisation

6 The Broadband State aid Guidelines Two main parts: Two main parts: basic broadband deployment (Section 2) basic broadband deployment (Section 2) deployment of NGA networks (Section 3) deployment of NGA networks (Section 3) A number of core requirements are common to both sections.

7 Section 2: State aid for Basic Broadband Deployment Absence of aid: Absence of aid: - MEIP: Equity participation or capital injections - SGEI: Altmark, no duplication of existing networks, access obligation - self provision of public entities (administrations etc): but aid if network is opened to third parties: Xarxa Oberta - general infrastructure investment (civil works, multi- functional ducts) - N 53 /2010: duct scheme in Germany constitutes State aid - Judgement Halle / Leipzig airport (T-443/08); General infrastructure: aid already in the construction

8 Section 2: State aid for Basic Broadband Deployment Compatibility (Article 87 (3) ©) white, grey and black zones white, grey and black zones The Grey zones: Need for a detailed assessment The Grey zones: Need for a detailed assessment Compatibility requires: Compatibility requires: (i) no affordable or adequate services are offered to satisfy the needs of citizens or business users; (i) no affordable or adequate services are offered to satisfy the needs of citizens or business users; (ii) there are no less distortive measures available (including ex ante regulation) to reach the same goals; (ii) there are no less distortive measures available (including ex ante regulation) to reach the same goals; (iii) limited prospects that third parties would build an alternative infrastructure. (iii) limited prospects that third parties would build an alternative infrastructure.

9 Section 2: State aid for Basic broadband Deployment 5 principles Publication Publication Mapping Mapping Technological neutrality Technological neutrality Open tender Open tender Open access Open access

10 Section 3 Support for NGA network deployment Technological neutrality Technological neutrality one basic broadband operator exists: MS to demonstrate one basic broadband operator exists: MS to demonstrate - that current broadband services cannot meet users' needs for more advanced services and - there are no other less distortive means to reach the same goals Basic black – NGA white Basic black – NGA white - The presumption: existing operators should have the incentives to migrate in the near future to NGA networks - The rebuttal: MS to demonstrate that no such investment plans exist

11 Particular issues Procuring backhaul versus last mile Procuring backhaul versus last mile Monitoring execution Monitoring execution access issues: access issues: - 7 years, 3-4 cases: permanent, - sale to private operators - what technology acceptable (GPON?)? - access to new and existing infrastructure Ownership of passive infrastructure Ownership of passive infrastructure

Many thanks for your attention 12