The European Commission has published draft guidelines on public funding of broadband networks under the State aid rules. The first part of the Broadband Guidelines outlines the Commission’s policy regarding traditional broadband networks. The second part of the Guidelines addresses public financing of high speed “next generation” networks that will require significant investment.

The Commission’s proposed approach is to distinguish between “white areas” where there is no broadband network provider, “grey areas” where there is only one broadband network provider and “black areas” where there are two or more providers. In general, State aid to white areas will be viewed positively (due to lack of private investment) while aid to black areas will be treated critically (due to strong presence of private investment). The Commission has launched a consultation on the Broadband Guidelines that will be open until 22 June 2009.