European Commission: BDUK support does not breach State Aid rules

The European Commission has confirmed its finding that a UK umbrella support scheme for investments in next generation access (NGA) broadband networks, ‘BDUK’, is in line with EU state aid rules. In particular, the scheme is aimed at supporting local projects in rural and remote areas, where such networks would unlikely be developed on commercial terms.

“BDUK, as a national competence centre, will assist local granting authorities in designing and implementing successful broadband support measures in line with EU competition rules. The umbrella scheme will be a big step towards the achievement of the EU Digital Agenda targets and a strong impetus for growth in the UK” said Commission Vice President in charge of competition policy Joaquín Almunia.

The UK notified plans to set up an umbrella scheme for implementing around 140 local broadband support projects without individual state aid notifications to the Commission. The Broadband Delivery UK (BDUK) scheme aims to provide as many UK homes and businesses as possible with access to superfast broadband infrastructure in the so-called “final third” areas. These areas are typically low-density, rural areas, where commercial operators are unlikely to invest in high quality broadband networks.

The total value of aid to be delivered by the scheme is estimated around GBP 1.5 billion (€1.8 billion). This will most likely enable the UK to achieve the objective of the EU Digital Agenda of coverage of 30 Mbps networks for all European citizens (see IP/10/581 and MEMO/10/199).

The design of the BDUK scheme contains several ‘best practices’ which will help to ensure more effective, better targeted and less distortive public interventions. For instance, a national competence centre will advise smaller local authorities. Moreover, the UK telecommunications regulator will have a crucial role in designing wholesale access prices and conditions. All information related to projects under the scheme (including mapping, public consultation, tenders, aid beneficiaries) will be published on a central website. The UK has also committed to submit an evaluation of the scheme to the Commission before 31 March 2015 and to ensure that any forthcoming scheme will take this evaluation into account.

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