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Tony Shortall, Telage - INCA State Aid Seminar
1. The European Dimension:
State Aid & Next Generation
Broadband
.
Tony Shortall
24 July 2012 London 1
2. State Aid and Next Generation
Broadband
• Context
• Technological neutrality
– FTTP or not?
• Future directions
• Conclusion
24 July 2012 London 2
3. Context
• The objective of State aid control is to ensure that
government interventions do not distort competition and
intra-community trade.
• State aid is defined as an advantage in any form
whatsoever conferred on a selective basis to
undertakings by national public authorities.
• The EC Treaty pronounces the general prohibition of
State aid.
• Exemptions for a number of policy objectives for which
State aid can be considered compatible.
– SGEI, Market Investor, Regional Development... <1% blocked
• System is unique to Europe.
– Don’t crowd out private funds
– Preserve and facilitate competition
• Is not assessed in a vacuum, what is ex-ante regime?
24 July 2012 London 3
7. Technological Neutrality 1
• False neutrality- setting targets which
include as many platforms as possible
• Initial attempt to set minimum targets,
‘a NGA network is further defined as involving: (i) laying fibre to existing street
cabinets offering the prospects of downstream bandwidths of a minimum of 40 Mbps
and 15 Mbps upstream .....(ii) upgrading current cable networks to deliver speeds up to and
beyond 50 Mbps against the previous maximum speed of 20 Mbps, using the new 'DOCSIS 3.0'
cable modem standard, or (iii) connecting newly built homes and offices with fibre
connections offering services up to 100 Mbps and beyond.’
• Subsequently removed....
‘NGA networks are wired access networks which consist wholly or in part of optical
elements and which are capable of delivering broadband access services with
enhanced characteristics (such as higher throughput) as compared to those provided
over existing copper networks
24 July 2012 London 7
8. Technological Neutrality 2
• Second attempt to set limits, maintains
existing definitions but adds a new
definition
Aid to ultra-fast broadband networks
In light of the Digital Agenda objectives, in particular achieving 50%
penetration to internet connections above 100 Mbps, public intervention
would still be possible in areas where existing or planned NGA networks do
not reach the end user premises with fibre networks.
• ‘Despite developments, no technologies can deliver the same services as
FTTH (speeds, symmetry, future-proof)’ DG Comp October 2011
• Perceive a preference for FTTP
• Potentially changing the areas where aid
can be directed....
24 July 2012 London 8
9. Previous allocations not spent
• €2.3 Billion not spent from ERDF funding
in current budget (Poland biggest single
recipient)
• Next budget proposes CEF with €9.3bn
with €7bn seen for network development
• In addition to CEF, ERDF and national
allocations in particular may increase
(BDUK)
• Spending such large funds will require a
streamlined process.
24 July 2012 London 9
11. Conclusions
• EU is well behind its own NGA targets.
• The role of public finance in achieving
NGA is increasing (+ externalities).
• The new State Aid guidelines want to
facilitate these investments.
• Scope of finance is being widened.
• Preference for FTTP is being extended
• Clearer role for NRA and more
coordination.
24 July 2012 London 11
12. THANK YOU!!
tony.shortall@telage.net
24 July 2011 London 12