04 September, 2012

ETNO response to State Aid for Broadband consultation

Public funding should go to underserved areas, no ‘crowding out’ of private investment and technology neutrality principles must be the basis of future European state aid policies for broadband

ETNO has expressed some concerns regarding the European Commission’s draft guidelines for the use of state aid for broadband. In particular, ETNO has in its response outlined concerns related to the new provision for the use of public funding in those areas where existing or planned NGA networks do not reach the end user premises.

State aid measures should not try to determine technology choices but rather support the market's choice of the most appropriate and efficient technologies and services to reach the Digital Agenda targets. As such, ETNO supports the recent statement made by Vice-President Kroes on the regulatory approach for NGA which states that roll-out will be achieved through a mix of different access technologies, wired or wireless.

“Competition between publicly funded FTTH networks and private NGA networks would have a significant impact on market players' investment plans, since the deployment of high speed broadband infrastructure may take place gradually over time, at different levels of the network, therefore satisfying gradually changing consumer demand. State aid rules and measures should focus on covering areas where investment is not planned by private players due to a lack of profitability.“ stated ETNO Executive Board Chairman Luigi Gambardella.

SMP-operators, which are already offering wholesale access through sector specific regulation, should not be obliged to provide a wider range of wholesale access products just because they receive aid in a specific area of the country. Indeed, the goal of open access obligations is the same when such obligations are imposed on SMP undertakings or aid beneficiaries, and imposing disproportionate obligations would increase investments costs and therefore the amount of aid needed.

ETNO believes that the 3 year investment period should be replaced by a longer timeframe of at least 5 years. In addition, the definition of the desired common interest goal and the concept of "step change" are not clear and risk creating situations where the funded projects do not coincide with future consumer demand.

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