Europe sets rules on aid for broadband rollouts

The European Commission has published a set of rules for when state aid should be used to roll out broadband networks, in a bid to speed up the deployment of high-speed next-generation networks in the European Union.

The guidelines (PDF), announced on Thursday, followed a public consultation. According to competition commissioner Neelie Kroes, the rules will "facilitate the widespread rollout of high-speed and very high-speed broadband networks, enhancing European competitiveness and helping to build a knowledge-based society in Europe."

"We expect to see up to ($442 billion) of investment in both high- and very high-speed European broadband networks in the coming decade," Kroes said in a speech marking the launch of the guidelines. "While this investment should be made mostly by private companies, there is an important role for public investment in achieving the widest possible access to broadband in under-served and non-profitable areas."

Kroes laid out three rules for the use of state aid in rolling out a broadband infrastructure. The first is that where there is no private investment, a public-service network is needed to ensure universal coverage. The second is that aid must only be used to deploy networks in areas that private providers do not find profitable; and the third is that the network must be open to all service providers.

"Public funds are not always needed for public authorities to promote broadband deployment and, in any event, they should not crowd out or delay private investments," Kroes added. "Before granting state aid, public authorities should therefore consider whether they can promote private investments with other means, for instance by co-ordinating civil works and streamlining administrative procedures."

The new guidelines are not only applicable to next-generation access (NGA)--a term that generally refers to fiber access--as they also cover ADSL, cable, and Wi-Fi networks. The Commission is still working on a separate draft NGA Recommendation that it hopes will give an indication of what regulators will expect from operators when deploying fiber and other high-speed broadband access.

In the U.K., incumbent operator BT has said it will roll out fiber to 10 million homes by 2012. The company is already trialing various ways of doing this in London, Cardiff, and Kent. And in June's Digital Britain report, the government proposed a 50-pence-per-month levy on fixed lines across the country with the aim of funding the rollout of next-generation broadband to unprofitable areas.

In a statement issued Thursday, the Commission noted that one of its fundamental concerns is to avoid the re-creation of old monopolies with public support.

"(The new) guidelines contain appropriate safeguards to ensure that any broadband infrastructure funded with public money does not favor (the) existing operator," the Commission said. "A company that receives public monies needs to provide effective open access to its competitors to allow them to compete in an equal, non-discriminatory way."

David Meyer of ZDNet UK reported from London.