On Tuesday, the European Commission (EC) put out for comment draft guidelines on the applicability of European state aid rules to the public funding of broadband networks in unserved areas. European Union (EU) competition commissioner Neelie Kroes described the guidelines as “important in the present economic circumstances as investments in this important infrastructure may both help economic recovery in the short-term and allow long-term benefits for European competitiveness.” The EC guidelines correspond to larger EU efforts to mandate an economic recovery package that identifies the expansion of rural broadband as one area of potential state investment. Within the draft document, the EC specifies that it has taken “an overwhelmingly favorable view towards state measures for rural and unserved areas, while being more critical [of] aid measures in areas where a broadband infrastructure already exists and competition takes place.” Adding that, in its prior decisions, “the Commission has underlined that broadband networks tend to profitably cover only part of the population,” the draft document concludes that “state support is needed to achieve ubiquitous coverage.” For state funding purposes, the EC said it would define a competitive market as one that is served by two or more broadband providers. Such markets would not be eligible for state aid under the draft rules. The EC hopes to issue final guidelines later this year after reviewing comments that are due on June 22.