Bonn/Brussels, 14.12.2022 With the state aid guidelines for broadband networks published on Monday, the European Commission sets out the rules for assessing future national broadband support programs. Member states must have state aid measures approved by the EU Commission in advance. In the view of the German Broadband Association (BREKO), the new regulations contain a positive innovation with regard to the determination of market failure, but miss the opportunity to consistently focus the new instrument of fiber optic vouchers on the promotion of new networks. An important lever for the fastest possible fibre-optic expansion in Germany remains the prioritization of funding to particularly poorly supplied areas without self-sufficient expansion potential.

The new state aid guidelines are expected to come into force in January 2023 and will not yet affect the new guidelines for federal gigabit funding expected in spring 2023. The new rules are only to be taken into account for new funding programs that the member states register with the EU Commission. Germany had already received the green light from the EU for federal gigabit funding at the beginning of 2021. Sven Knapp, Head of the BREKO capital office, therefore emphasizes: “It remains the case that we will make the fastest progress in fiber optic expansion if the gigabit funding is targeted at particularly poorly supplied areas without expansion potential and sensibly complements the self-sufficient fiber optic expansion. In order to achieve this, the Federal Ministry for Digital and Transport must link the allocation of funding in future with the potential analysis currently being carried out to ensure that those citizens who are currently least well served benefit first from the state-funded fiber-optic expansion.”

In BREKO’s view, the most important innovation in the EU state aid guidelines is that the determination of a market failure will in future be limited in time. If a subsidized project is not completed within three years, a new market investigation must be carried out in future to ensure that there are still no plans to roll out fiber optics in the area in question. “As subsidized expansion projects currently take four to five years on average, a second market survey will be necessary in many cases. We therefore hope that, in future, local authorities will only apply for funding where no commercial expansion is expected in four or five years’ time. The Federal Ministry for Digital and Transport Affairs should consider including this regulation in the new funding guidelines as early as 2023. This would also be possible without a new application to the EU Commission,” demands BREKO Managing Director Dr. Stephan Albers.

BREKO has been advocating the introduction of so-called fiber optic vouchers for several years in order to connect households that have not yet been economically accessible to the fiber optic network quickly and unbureaucratically. According to the association, the vouchers should be made available directly to affected citizens. However, BREKO believes that the possibilities for this new type of fiber-optic support contained in the new state aid guidelines fall far too short. Albers commented: “We see great potential in demand-side support, in particular to create incentives for connecting households that have not yet been economically accessible and are located close to areas that can be economically developed. We therefore very much regret that the European Commission has not consistently geared the voucher support towards creating new expansion incentives, but apparently only envisages the use of vouchers for existing networks. A focus on areas that have already been expanded wastes the potential to create incentives for fast, unbureaucratic expansion and the use of new fiber optic networks – also on the part of consumers. The European Commission should provide clarity here and explicitly refer the voucher funding to networks that are yet to be built.”