{"id":17478,"date":"2018-11-22T00:01:37","date_gmt":"2018-11-22T00:01:37","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=17478"},"modified":"2018-11-22T06:52:02","modified_gmt":"2018-11-22T06:52:02","slug":"study-lack-of-state-aid-putting-future-broadband-ambitions-at-risk","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2018\/11\/study-lack-of-state-aid-putting-future-broadband-ambitions-at-risk.html","title":{"rendered":"Study – Lack of State Aid Putting Future Broadband Ambitions at Risk"},"content":{"rendered":"

A new study from the Centre on Regulation in Europe<\/a> (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<\/em>“.<\/p>\n

At present the existing Digital Agenda for Europe<\/strong> (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+<\/strong> 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 (here<\/a>).<\/p>\n

More recently the EU has proposed a non-binding “Gigabit Society<\/em>” commitment that would require member states to ensure that everybody could access a minimum speed of 100Mbps<\/strong> by 2025 (focus on FTTP<\/a>), 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<\/a> is a future option).<\/p>\n

However the authors estimate that public funding from all sources to support broadband deployment in the period to 2020 amounts to around \u20ac7 billion per year. “At this rate it will take Europe nearly 30 years to meet its FTTH<\/a> targets<\/em>,” said the report.<\/p>\n

They also found wide variations in public funding between Member States: in the period 2003-18 France spent around \u20ac215 per capita and Italy \u20ac145, whilst the majority of Member States spent less than \u20ac100 per capita and some less than \u20ac10. Overall 65% of public funding for broadband comes from Member States.<\/p>\n

Richard Feasey, CERRE Research Fellow, said:<\/strong><\/p>\n

“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.<\/p>\n

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.”<\/p><\/blockquote>\n

At the European level, the most significant source of State Aid for broadband is the Regional Development Fund (ERDF). This is one of five \u2018structural funds\u2019 which together form the European Strategic Investment Fund (ESIF). In addition, the Agricultural Fund for Rural Development (EAFRD) has funds of \u20ac100 billion in the period 2014-2020, some of which have also been applied to broadband (this fund is much smaller than the ERDF and has a wider set of funding objectives).<\/p>\n

Member States tend to make different decisions about the proportion of ERDF and EAFRD funds which they allocate to broadband infrastructure. The table below provides an indication of the proportion of funds allocated to broadband (BB) in the 2014-20 period for selected Member States:<\/p>\n

\"eu_state_aid_broadband\"<\/p>\n

The data suggests that no Member State has allocated more than 3.6% of their European funds (ERDF and EAFRD) to broadband infrastructure in the period 2014-2020. The Czech Republic, France and Italy allocate a relatively higher proportion of their funds to broadband (relative to relevant peers), each for different reasons.<\/p>\n

By comparison Spain, Germany and the UK each allocate a “relatively low proportion<\/em>” of both their overall funds and their ERDF to broadband. Spain receives similar levels of structural funds to Italy but allocates much less to broadband. Germany receives less funding than either Spain or Italy, but significantly more than the UK. In response the report makes several recommendations.<\/p>\n

Recommendations for EU and National Policy Makers<\/strong><\/span><\/p>\n

1. Mobilise grassroots interests in public funding of broadband with an EU-wide competition for funds.<\/p>\n

2. Improve coordination between the European Investment Bank and the European Commission\u2019s DG Competition to ensure that in each case the appropriate public funding instrument is used.<\/p>\n

3. Increase the share of European funds allocated to broadband.<\/p>\n

4. Revise the existing \u2018Broadband State Aid Guidelines\u2019 now to clarify key elements such as:<\/p>\n

\u00b7 when and how public funds can be used if commercial operators have no plans to deploy Very High Capacity infrastructure;<\/p>\n

\u00b7 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;<\/p>\n

\u00b7 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;<\/p>\n

\u00b7 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;<\/p>\n

\u00b7 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.<\/p>\n

5. Require Member States to provide more data to enable the evaluation of the effectiveness of State Aid measures. \u2018Effectiveness\u2019 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.<\/p><\/blockquote>\n

At this point there remains a question mark over how relevant all this will be to the UK when we leave the EU next year, although the current draft deal does appear to tie us in to some EU State Aid rules for at least another couple of years (we’ll wait to see if this deal survives to become a final text examining it).<\/p>\n

On top of that the UK doesn’t have any plan for meeting the EU’s latest target. At present they indicate that around 98% of the UK should be covered by “superfast broadband<\/em>” by 2020 and there’s an aspiration to reach universal coverage of Gigabit capable “full fibre<\/em>” (FTTP<\/a>) by 2033 (this will require several \u00a3 billion but so far only a small fraction has been committed), but nothing about achieving universal coverage of 100Mbps+ “ultrafast broadband<\/em>” by 2025.<\/p>\n

CERRE State Aid for Broadband Infrastructure<\/strong>
\nhttp:\/\/www.cerre.eu\/..\/CERRE_StateAidBroadband_FinalReport.pdf<\/a><\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

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“.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[471,85,52,55,65,56,38,34],"class_list":["post-17478","post","type-post","status-publish","format-standard","hentry","category-uk_isp_news","tag-bduk","tag-europe","tag-fibre-optic","tag-fttc","tag-ftth","tag-fttp","tag-politics","tag-statistics"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nStudy - Lack of State Aid Putting Future Broadband Ambitions at Risk - ISPreview UK<\/title>\n<meta name=\"description\" content=\"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\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2018\/11\/study-lack-of-state-aid-putting-future-broadband-ambitions-at-risk.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Study - 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