European Commission introduces broadband funding guidelines
Friday 18 September 2009 15:29:34 by John Hunt

The European Commission has set out guidelines for state funding of broadband projects within the 27 countries of the European Union to try and help foster a coherent and consistent practice. Over 40 individual decisions have been made over state aid for broadband in member states, and the guidelines draw off these to create a guide to explain how public funds can be used to help deployment of both normal broadband networks, and next generation access (NGA) networks (such as fibre to the home), in areas where operators are not investing.

"The Guidelines offer Member States and public authorities a comprehensive and transparent tool to ensure that their plans for state funding of broadband are compliant with the EU's state aid rules. The Guidelines will therefore facilitate the widespread roll out of high speed and very high speed broadband networks, enhancing European competitiveness and helping to build a knowledge-based society in Europe."

Neelie Kroes, Competition Commissioner

One key point covered in the guide is that any funding provided must be used to create an open-access network. That means that it must be available for all network operators to be able to provide and sell broadband services on. This may have some unforeseen repercussions. The so called "Carter Tax"- a 50p levy on all telephone lines suggested by the Digital Britain Report was designed to help fund broadband access in rural areas. One way to do this is by the deployment of mobile broadband based technology to mobile phone masts to provide a service in keeping with broadband speeds. This may however be hard to provide in an "open-access" model as sharing of the radio network would require a lot of work.

Another solution that we imagine BT are hoping will come out trumps is Broadband Enabling Technology, a pilot of which was extended by Openreach earlier this week. The technology enables broadband on lines up to 12km away and with speeds up to 2Mbps (if two lines are available). This would be easier to fit in the "open-access" model, although it does require special equipment at both ends which may limit full-unbundling.

A further interesting requirement of open-access when applied to NGA networks is that providers have to offer both access to the dark fibre as well as bitstream access (equivalent of an IPStream type product that most UK non-LLU providers use) and sub-loop unbundling if being deployed as FTTC.

The full guideline document is available here (PDF).