Public intervention to support broadband deployment in the EU

The European Union (EU) believes that public intervention, often through public-private partnerships using loans or grants, may accelerate broadband deployment in less profitable areas and that open access requirements to make infrastructure accessible to competing service providers encourages competition.

The EU monitors public funding in member states so that public subsidies are not being used in ways that run counter to competition. Typically the EU supports projects that offer open access to all service providers and are technology neutral. The communications infrastructure has managers independent from the state and may have owners that are network operators selected through open tenders.

The EU has permitted these types of publicly funded broadband projects in rural and remote areas in at least seven member states. The EU has been less convinced about the necessity of these types of projects in metropolitan areas, where there could already be broadband competition: it prohibited public funding for one such project in the Netherlands that would have competed with existing broadband services and would have distorted competition through discrimination. However, the EU permitted a project in a metropolitan area in the Czech Republic, provided that the project served only the public sector and citizens accessing public sector non-commercial web sites.

EU funds can contribute to the development of less advanced areas, especially in more recent member states, and to ensure that ICT infrastructure is available and affordable where the market fails to do so. Examples of these uses of EU funds are:

  • In Greece, all areas, with the exception of major cities, are being provided with broadband networks. These networks use fibre and/or radio technologies;
  • In Hungary, underserved towns of fewer than 15 thousand inhabitants, and which are considered to be unattractive to private investment, are receiving support for building broadband networks;
  • In Ireland, 120 towns without commercial broadband suppliers are receiving support for constructing broadband networks. The networks remain in the ownership of the state and the municipalities, but are to be managed under tender by a wholesale network operator that will offer services to retail service providers; and
  • In Lithuania, rural areas are getting 3000 km of fibre links to complement the existing core networks. Public Internet access points in these areas are also being funded partly by EU funds. Access networks are expected in a later phase of the work.

Source: Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions Bridging the Broadband Gap (European Commission, March 2006), http://ec.europa.eu/information_society/eeurope/i2010/docs/digital_divide/communication/com_bridging_bb_gap_2006_en.pdf.
 

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