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EU state aid rules do not slow down urban broadband

May 20th, 2016

In an article “EU red tape leaves urban homes in internet slow lane” published on 18 May, the Daily Telegraph slams EU “red tape” for hampering UK Government efforts to rollout high-speed broadband in urban areas that don’t have it yet. The article implies that EU state aid rules prevent public subsidies for such rollout.

This is untrue.

In fact, the European Commission’s 2013 Broadband Guidelines for state aid explain how state aid rules apply to the rollout of fast broadband and how investment can be made more quickly.

In 2012 the Commission approved the previous National Broadband Scheme for the UK for rural areas . In May 2016 the Commission endorsed the new UK broadband scheme for 2016-2020 within a month of its notification by the UK authorities.

Many public measures, including investments by the state in broadband projects, are exempted from state aid rules and can be implemented immediately because they do not distort competition. Where state aid is involved, the purpose of EU rules is to ensure that private investment is not crowded out by public money. In other words, the whole idea is to have more choice and more investment, not less. The Telegraph article itself quotes the UK Department for Culture, Media and Sport (DCMS) saying that they are working with the industry to drive commercial investment in urban areas, so as to focus public financing on rural areas, where there is less private appetite.

Contrary to what the article suggests, the rollout of high-speed broadband across Europe is one of the European Commission’s priorities under the EU’s Digital Single Market Strategy, an overarching effort to make the EU fit for the digital age. It is up to the UK – and each individual member state – to decide where and how to invest in top-speed connectivity. Currently, with 91% of households covered by high-speed broadband (at least 30 Mbps), the UK is well above the EU average (71%) (see Digital Economy and Society Index, DESI).

So EU state aid rules help rather than hamper the rollout of high-speed broadband.

What is more, the EU actually funds – from its so-called structural funds – broadband rollout in remote areas. One case in point is Superfast Cornwall – so far the largest single European investment in broadband and which was supported with €65.5 million (roughly £50 million*) from the European Regional Development Fund (ERDF) out of a total €93.1 million (roughly £71 million*). It now covers 95% of premises and a successor programme is in the pipeline.

* Please note: all amounts expressed in sterling are for information purposes only.

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Please note that all statements in all entries were correct on the date of publication given. However, older archived posts are not systematically updated in the light of later developments, for example changes to EU law.

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