State aid: Commission approves German scheme for very high capacity broadband networks in Bavaria

This article is brought to you in association with the European Commission.

---

The European Commission has approved, under EU State aid rules, a Bavarian scheme to deploy very high capacity networks in Bavaria. The aid will bring very fast broadband to customers in areas where the market does not provide them, in line with the EU broadband connectivity goals. The scheme follows an earlier gigabit pilot project, which was approved by the Commission in December 2018. Contrary to the pilot project, which involved only six municipalities, the present scheme applies to the whole of Bavaria. Commissioner Margrethe Vestager, in charge of competition policy said: “The Bavarian scheme promotes the deployment of gigabit-infrastructure. With this scheme, public money will be channelled into those areas which are most in need of better connectivity. At the same time, it will foster investment from private operators.” Germany notified to the Commission the Bavarian scheme, which aims to develop a new, publicly financed very high capacity connectivity infrastructure that will deliver a faster internet for households, companies and public institutions in Bavaria. The new network will be capable of offering speeds of 200 megabits per second (Mbps) for households and 1 gigabit per second (Gbps) for companies and public institutions. These broadband speeds are far above those that users currently have in the target areas. As the earlier pilot project, the Bavarian gigabit scheme will bring about a significant improvement – a ‘step change’ – in connectivity. The Bavarian gigabit scheme is in line with the strategic objectives of the Gigabit Communication, as it allows for public investment in areas where the new 2025 targets are not yet met and no sufficient infrastructure is to be provided by private investors within the next three years. At the same time, it protects incentives for private investments, which are needed in order to achieve full coverage with very high capacity connectivity networks in Europe. As in the pilot project and to avoid duplication of infrastructures, the German authorities will take existing and planned investments by market operators into account in the following way:

• The infrastructure will connect customers that don’t have access to certain minimum speeds yet: 100 Mbps download for households; 200 Mbps symmetric (upload and download) or more than 500 Mbps download for companies;
• The new networks will not be deployed where a very high capacity network is already in place or planned by private investors, such as a fibre network leading to the customers’ premises or an upgraded cable network.
• Areas where there are two or more networks providing fast broadband (30 Mbps or more) in parallel are also excluded from the project.

The aid will be awarded based on open, transparent and non-discriminatory tenders, with all technologies being able to compete for provision of the service. On this basis, the Commission has approved the Bavarian gigabit scheme under the Broadband State aid Guidelines. The project will contribute to the EU strategic objectives set out in the Commission’s Gigabit Communication, which encourages investments into very high capacity networks across the EU. Background Building on the EU’s existing 2020 broadband targets, the Commission has identified in its Gigabit Communication the connectivity needs to build a European Gigabit society, where very high capacity networks enable the widespread use and development of products, services and applications in the Digital Single Market. The existing 2013 Broadband State Aid Guidelines allow for such public investments where a market failure exists and where these investments bring a significant improvement (step change). This is also subject to certain other parameters to protect competition and private investment incentives. In December 2018, the Commission approved a Bavarian pilot project to deploy very high capacity networks in six municipalities (Berching, Ebersberg, Hutthurm, Kammerstein, Kleinostheim and Kulmbach). The relevant procedures preparing a deployment of very high capacity infrastructures in these six municipalities have in the meantime successfully started. The non-confidential version of the decision will be made available under the case number SA.54668 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.