broadband strategies handbook.pdf - Khazar University

Box 2.4: Expe rience in the European Union with State Aidfor Financing BroadbandIn the context of market reform, good practicein financing universal access projectsusing public financing other than funds ininternational jurisdictions includes the practiceof setting out rules or guidelines on theprovision of public funding for universal serviceand access. The EU state aid guidelinesfor funding broadband assist in bringing universalaccess and service through the presenceof clear rules that do the following:• Facilitate next-generation access (NGA)and broadband investments from publicfunds in order to bring broadband connectivityto underserved areas• Enable the rapid deployment of broadbandand especially NGA networks,thus avoiding the creation of a new digitaldivide• Due to the conditions laid down for thegranting of state aid (such as open access,open tenders), allow the maintenance ofcompetition, thus helping to ensure betterand more broadband services.Historically, funding decisions could bemade on a case-by-case basis in the EU.However, in light of the significant level ofinvestments, stakeholders require a level ofcertainty—hence the need for the guidelines.Source: Box taken from European Commission and ITU 2011.to roll out superfast fiber broadband to unprofitable areas with the help ofEuropean funding. The European Regional Development Fund’s ConvergenceProgram is investing £53.5 million, or just over 40 percent of the totalfunding, with BT providing £78.5 million (France 2011).Direct government intervention. Market-based investments should be themainstay for broadband deployment, but some degree of direct governmentfunding may be required to enable and complement the market, particularlyin areas that are not considered economically viable by privateoperators. The form of this more direct intervention will vary from countryto country. In many countries, subsidies are used to underpin privatesector investment.Some governments have effectively used subsidies and other financialincentives to spur broadband deployment. Canada, Germany, Greece, Korea,Malaysia, Portugal, Singapore, the United Kingdom, and the United Stateshave all announced plans to undertake and are implementing substantialdirect government funding for network infrastructure development. Insome countries (for example, Canada, Finland, Germany, Portugal, theUnited Kingdom, and the United States), measures to expand broadbandaccess and to bolster connection speeds have been included in the country’s70 Broadband Strategies Handbook