Table of Contents 1.Introduction11 1.1.Context11 1.2.Purpose12 1.3.Evaluation criteria13 1.4.Scope of the evaluation13 2.Background to the intervention14 2.1.Legal and policy background14 2.2.Background of the intervention16 2.2.1.Description of the intervention and its objectives16 2.2.2.Baseline17 3.Implementation of the State aid rules for the deployment of broadband networks18 3.1.The rules18 3.2.Description of the current situation21 3.2.1.Number and Types of State aid measures21 3.2.2.Transparency aid module22 3.2.3.Monitoring23 3.2.4.Evaluation Plan23 3.2.5.Technological advance24

3.2.6.State aid policy developments and recent events26 4.Method27 4.1.Data collection and assessment27 4.2.Challenges and robustness of findings30 5.Analysis and answers to the evaluation questions31 5.1.Effectiveness31 5.1.1.Support the rapid deployment of broadband infrastructure, helping reduce the 'digital divide’32 5.1.1.1.Facilitate the deployment of broadband infrastructures, in line with 2020 DAE connectivity targets and bringing connectivity to low population density, rural and remote areas32 5.1.1.2.Address a market failure or major inequalities37 5.1.1.3.Higher quality of services at affordable prices39 5.1.2.Limitation of distortion of competition41 5.1.2.1.Protecting existing investment43 5.1.2.2.Protecting future investment plans46 5.1.2.3.Promoting competition in the market49 5.1.2.4.Promoting competition for the market52 5.1.3.Transparent decision-making55 5.1.3.1.Clarity of the rules56 5.1.3.2.Simplified rules60 5.2.Efficiency61 5.2.1.Administrative efficiency61

5.2.2.Have the 2013 Broadband Guidelines led to more efficient State expenditure?66 5.2.3.Overall balance: Have the benefits associated with the 2013 Broadband Guidelines outweighed the cost?72 5.3.Relevance74 5.4.Coherence78 5.5.EU added value80 6.Conclusions81 Annex 1: Procedural information84 1.Lead DG84 2.Organisation and timing84 3.Exceptions to the Better Regulation Guidelines85 4.Consultation of the RSB85 5.Evidence, sources and quality85 Annex 2: Synopsis report87 1.Outline of the consultation strategy87 2.Methodology and tools used to process the data88 3.The results of the stakeholder consultations89 4.Contributions received outside the formal consultation context99 5.Use of the information gathered99 Annex 3: Overview of the State aid rules for broadband infrastructure development subject to the evaluation100 Annex 4: Overview of the implementation of the State aid rules for broadband infrastructure development101





Table of Figures Figure 1. Number of aid measures per individual beneficiaries and per Member State published in TAM. 22 Figure 2: Number of aid measures monitored between 2013 and 2020 23 Figure 3. Number of projects servicing connectivity types by country 39 Figure 4. Replies to question 2 of the open public consultation 42 Figure 5. Replies to question 3 of the open public consultation 42 Figure 6. Replies to questions 41 and 42 of the targeted consultation 44 Figure 7. Replies to question 44 of the targeted consultation 44 Figure 8. Replies to questions 45 of the targeted consultation 45 Figure 9. Replies to question 46 of the targeted consultation 45 Figure 10. Replies to question 57 of the targeted consultation 47 Figure 11. Replies to question 50 of the targeted consultation 48 Figure 12. Replies to question 55 of the targeted consultation 48 Figure 13. Replies to question 63 of the targeted consultation 52 Figure 14. Replies to question 77 of the targeted consultation 53 Figure 15. Replies to question 65 of the targeted consultation 53 Figure 16. Replies to question 80 of the targeted consultation 54 Figure 17. Replies to question 67 of the targeted consultation 55

Figure 18. Replies to question 11 of the targeted consultation 61 Figure 19. Share of State aid administration costs by category: Greek authorities 63 Figure 20. Question 14 to the open public consultation 66 Figure 21. Timeline between start of State aid measure and the entering into service, per project 67 Figure 22. Percentage of aid spent on total amount available 68 Figure 23. Question 12 of the open public consultation 69 Figure 24. Question 16 of the open public consultation 70 Figure 25. Question 11 to the open public consultation 71 Figure 26. Replies to question 14 of the targeted consultation 75

List of Tables Table 1. Replies to questions 2 and 3 of the open public consultation 57 Table 2. Clarity of requirements and concepts used in the State aid rules 58 Table 3. Replies to questions 2 and 3 of the open public consultation 59 Table 4. Reasons for delays in the application of broadband State aid as expressed by stakeholders 69



List of Annexes Annex 1: Procedural information Annex 2: Synopsis report Annex 3: Overview of the State aid rules for broadband infrastructure development subject to the evaluation

Annex 4: Overview of the implementation of the State aid rules for broadband infrastructure development

Glossary Term or acronym Meaning or definition 4G Fourth generation wireless technology for digital cellular networks 5G Fifth generation wireless technology for digital cellular networks ADSL Asymmetric Digital Subscriber Line; A technology that enables, for example, rapid access to interactive broadband services and video on demand through copper wire used in existing local telephone loop plant, In its "2+" iteration, ADSL supports one-way transmission at bit rates up to 24 Mbps on a single pair of copper wires and enables subscribers to connect to data networks and the Internet at speeds from 50 to 200 times faster than current analogue modems operating at 28.8 Kbps. Backhaul The middle part of a broadband network, connecting the local access to the core internet network. Technically the link from the cable head to the international switching centre. Bandwidth Bandwidth is the capacity of a network or other communication channel for transferring data, measured in bps. Basic broadband Basic broadband networks are based on the existing fixed or wireless networks including (ADSL, ADSL2+ networks), non-enhanced cable (e.g. DOCSIS 2.0), 3G mobile networks (UMTS) and satellite systems. Basic networks can typically deliver at least 2 Mbps and less than 30 Mbps. BCO European Broadband Competence Offices BER Block Exemption Regulations BEREC Body of European Regulators for Electronic Communications Bitstream access Wholesale access provider installs a high-speed access link to the customer premises and makes this access link available to third parties Black NGA areas Black NGA areas are those where two or more NGA networks are present or planned in the near future. Bps Bits per second Broadband A term applied to high speed electronic communications systems BRP Better Regulation Portal CEF2 Digital The Connecting Europe Facility Digital Programme CERRE Centre on Regulation in Europe DAE Digital Agenda for Europe initiative Dark fibre Unlit fibre without transmission systems connected. DESI Digital Economy and Society Index; DESI is a composite index that summarises relevant indicators on Europe’s digital performance and tracks the progress of EU Member States in digital competitiveness DG Directorate-General DG COMP Directorate-General for Competition DOCSIS Data Over Cable Service Interface Specification; A cable TV network solution Duct Underground pipe or conduit used to house (fibre, copper or coax) cables of a broadband network. EECC European Electronic Communication Code EU European Union EU2020 Europe 2020 Strategy EEA European Economic Area FTE Full-time equivalent; a unit to measure employed persons in a way that makes them comparable although they may work or study a different number of hours per week. FTTB Fibre to the Building, which reaches the end user premises with fibre, i.e. fibre is rolled out to the building, but copper, coax or LAN is used within the building FTTC Fibre to the Cabinet; From which the first-mile connection starts, a local area infrastructure. Fibre laid to the cabinet, with copper wires completing the connection. FTTC/VDSL Fibre to the Cabinet / Very-high-bit-rate Digital Subscriber Line FTTH Fibre to the Home network, which reaches the end user premises with fibre, i.e. an access network consisting of optical fibres lines in both the feeder and the drop segments of the access network (including in-house wiring). FTTP Fibre to the Premises; used interchangeably with FFTH FWA Fixed Wireless Access; Fixed Wireless Access technology allows to supply connectivity services through radio spectrum, without requiring deployment of copper and optical fibre networks for the so called “last mile” segment Gbps Gigabit per second GBER General Block Exemption Regulation GDP Gross Domestic Product GPON Gigabit Passive Optical Network Grey NGA areas Grey NGA areas are those where one NGA network is present or planned in the near future. IA Impact Assessment LTE Long-Term Evolution; high performance communication system for cellular mobile phones. Step towards 4th generation, but commonly called 4G. Mbps Megabit per second Mobile broadband Used to describe various types of wireless high-speed internet access through a portable modem, telephone or other device NGA Next Generation Access networks (also called fast broadband networks) consist wholly or in part of optical elements and which are capable of delivering broadband access services with enhanced characteristics (such as higher throughput) as compared to those provided over already existing copper networks. In most cases, NGA is the result of an upgrade of an already existing copper or co-axial access network. NGA networks are capable of providing at least 30Mbps. NGN Next Generation Network; Where one network transports all information and services (voice, data, and media such as video) by encapsulating these into IP packets, similar to those used on the Internet NGO Non-Governmental Organisation NRA National Regulatory Authority OECD Organisation for Economic Co-operation and Development OJ Official Journal of the European Union PtP Point to point REFIT European Commission's Regulatory Fitness and Performance Programme RRF Recovery and Resilience Facility RRP Recovery and Resilience Plans RSB Regulatory Scrutiny Board SA State aid SAM State aid Modernisation SGEI Services of General Economic Interest; economic activities that public authorities identify as being of particular importance to citizens and that would not be supplied (or would be supplied under different conditions) if there were no public intervention. SMP Significant Market Power State aid Scoreboard The Scoreboard is the European Commission’s benchmarking instrument for State aid. It was launched by the Commission in July 2001 to provide a transparent and publicly accessible source of information on the overall State aid situation in the Member States and on the Commission's State aid control activities. Furthermore, the data in the report are used for further statistical analysis and represent an important source of information. SWD Staff Working Document TAM Transparency Award Module, gives access to state aid individual award data provided by Member States in compliance with the European transparency requirements for state aid. TFEU Treaty on the Functioning of the EU UK United Kingdom US United States UMTS Universal Mobile Telecommunications System, also known as 3G and the most prevalent mobile communication technologies, follow the 3rd Generation Partnership Project’s (3GPP) technical specifications. Ultrafast networks Networks able to provide at least 100 Mbps download VHC Very High Capacity VHCN Very High Capacity Networks VULA Virtual Unbundled Local Access VVA Valdani Vicari & Associati White NGA areas White NGA areas are those where no NGA network (capable of providing speeds above 30Mbps download) is present or planned in the near future. WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste xDSL Digital Subscriber Line technologies; A collective term for all types of digital subscriber lines, including asymmetric digital subscriber line (ADSL), symmetric digital subscriber line (SDSL) and high-data-rate digital subscriber line (HDSL). 1.Introduction 1.1.Context High quality electronic communications infrastructure is crucial for connecting and integrating the Union and its remote regions, allowing all users to have access to private and public electronic communications services contributing to social cohesion and supporting a more competitive and sustainable economy. Investments in electronic communications network deployment come primarily from private operators with public support complementing these private initiatives where necessary. State aid control in the electronic communications sector plays an important role in developing a co-ordinated investment strategy. The Broadband Guidelines, adopted in 2013 and the relevant provisions of the General Block Exemption Regulation (GBER), adopted in 2014, set out specific criteria for the allocation of public funds for pro-competitive infrastructure deployment in areas that need it most. They seek to ensure that public support leads to modern infrastructure increasing consumer welfare and reducing the 'digital divide' where commercial operators do not invest, while avoiding crowding-out of private investments or discriminating against certain operators or technology platforms. The State aid rules for the deployment of broadband infrastructure have helped Member States to channel public support in a pro-competitive manner in line with the targets set out for 2020 by the Digital Agenda for Europe (DAE). These objectives were updated in 2016 by the Commission in its Gigabit Society Communication that sets additional and more ambitious targets for electronic communications network deployment by 2025 in line with expected use, market and technological developments. In February 2020, the Commission published a new EU digital strategy (Shaping Europe’s Digital Future). In March 2021, the Commission presented the EU digital ambitions for Europe’s digital transformation by 2030 where connectivity is one of four cardinal points for digital transformation. 1.2.Purpose In view of the very rapid technological developments in this field, and the current and future challenges that these entail, it has become evident that, although the Broadband Guidelines do not formally have an expiry date, it is expedient to undertake an evaluation. The evaluation assesses in particular the extent to which the State aid rules applicable to broadband are still fit for purpose, in view of their objectives and developments in the market and in legislation, having regard to the new political objectives of the Commission, including the European Green Deal, and a Europe fit for the digital age. The Commission in 2012 engaged in an overall reform of EU State aid policy and launched the State aid modernisation (SAM). In 2019, it launched a Fitness Check, which was an evaluation of the rules which were adopted as part of the State aid Modernisation exercise. At the time, it was considered that there was no need to include the Broadband Guidelines in the Fitness Check. The reason for this was that the application of common assessment principles, in the Broadband Guidelines, to a large extent is driven by the technological requirements and developments in the sector, and the rules were considered sufficiently open-ended to cater for developments expected in the near future and flexible enough to assess diverse State interventions, including those addressing the new policy targets of the Gigabit Communication. However, technological developments continued to accelerate, and after the launch of the Fitness Check, the need to take these developments into account became increasingly clear. The continued application of State aid rules on a case-by-case basis has in the meantime contributed to a body of case practice which addresses this evolving situation also having regard to the 2025 Gigabit objectives. A study was also launched to examine the Commission’s practice under the Broadband Guidelines and the experience gained in the application of State aid rules in the broadband sector (data gathering exercise, identifying challenges in the application of the Broadband Guidelines, best practices, improvements to address identified difficulties; also aiming at verifying elements required under the Better Regulation rules), and a separate evaluation of the Broadband Guidelines was therefore considered better justified. The present evaluation analyses how the Broadband Guidelines and the relevant provisions in the GBER (Article 52, in its version in force up to December 2020) have functioned and to what extent they have stimulated the deployment of electronic communications infrastructure and contributed to more competitiveness in the sector. The purpose of the evaluation is also to check to what extent the current rules respond to technological developments as well as socio-economic needs and are appropriate having regard to the new EU strategic objectives in terms of connectivity and digital transformation. The evaluation will provide a basis for a decision about whether a revision of the current State aid rules for broadband infrastructure deployment is necessary. 1.3.Evaluation criteria The purpose of this evaluation is to examine the application of the Broadband Guidelines against five criteria: effectiveness, efficiency, relevance, coherence and EU added value. This is a retrospective exercise with the aim of establishing what has worked well or poorly, and it compares actual performance to earlier expectations. The findings will serve as a basis for conclusions on how well the Broadband Guidelines have been performing, whether the Broadband Guidelines are fit for purpose’ in view of the current situation and if not, what are the underlying reasons for this. This Staff working document reflects the findings and views of the Commission’s staff and does not preclude any formal decision by the Commission. 1.4.Scope of the evaluation The timeframe covered by this evaluation is the period since the entry into force of the relevant rules (2013 for the Broadband Guidelines and 2014 for the relevant provisions of the GBER) until January 2021, at the end of the consultation period. The evaluation covers the 27 Member States and the United Kingdom regarding aid measures put in place by public authorities in application of the current rules since their entry into force, which were either authorised by the Commission or exempted from the prior authorisation under the relevant GBER provisions.

2.Background to the intervention 2.1.Legal and policy background Competition is a major driver of growth. It incentivises enterprises, including new ones, to enter markets and innovate, improving productivity and competitiveness in a global context. State aid control is part of competition policy enshrined in the Treaty (Article 107 and 108 TFEU) and its basic rationale is to avoid undue market distortions and subsidy races, as well as to safeguard the internal market and create a competitive landscape with a level playing field. State aid is a form of support given by a Member State that provides an undertaking or specific undertakings with an advantage over its/their competitors. The Treaty contains a negative presumption against all forms of State aid. However, while Article 107(1) of the Treaty on the Functioning of the European Union (TFEU) lays down a general prohibition of State aid granted by Member States to undertakings, Article 107(3) TFEU also allows for a number of policy objectives for which State aid may be granted. As such, State aid control does not prevent Member State governments from supporting businesses. State aid control ensures that any detriment arising from distortions of competition is outweighed by the public purpose pursued by the aid. The exemptions laid down in Article 107(3) TFEU are discretionary in nature and the Commission has exclusive competence to decide on these exceptions, i.e. on the so-called ‘compatibility’ of State aid with the internal market. In exercising these discretionary powers, when issuing decisions on compatibility, the Commission balances the negative effects of the aid measure on trade and competition in the internal market with its positive effects in terms of contributing to the development of an economic activity. To ensure predictability and legal certainty for Member States and stakeholders on how it applies its margin of discretion in interpreting the compatibility provisions in Article 107(3) TFEU, the Commission has adopted a series of rules (in the form of ‘soft law’ such as guidelines and frameworks). There is also no legal obligation to adopt guidelines and frameworks. The adoption of such guidelines by the Commission is an instance of the exercise of its discretion. While the guidelines and frameworks on compatibility set out how the Commission will assess aid measures, and allow Member States to grant support under Article 107 TFEU, they do not oblige Member States to grant aid; this remains in their discretion. As described above, the Commission has exclusive ex-ante control power: under Article 108 TFEU, Member States are obliged to notify their intentions to grant State aid and cannot implement the measure before the Commission's approval. ‘Unlawful aid’ means aid put into effect in contravention of Article 108(3) TFEU. The Commission’s approval takes the form of a Commission decision. Such decisions can be challenged and are subject to European Courts’ scrutiny. For small amounts of aid and/or less distortive aid measures however, the Commission has issued block exemption regulations, pursuant to Article 109 TFEU, laying down the conditions that have to be fulfilled in order to deem the State aid measure compatible with the internal market without the necessity of an ex-ante notification and approval. Since 2008, the previous block exemption regulations (so-called ‘BERs’) have been ‘merged’ into a single document, the GBER. The GBER is directly applicable and thus its conditions binding for the numerous national administrations in the Member States if they wish to grant aid under it. The aid measures fulfilling the conditions of GBER are presumed to be compatible with the TFEU and thus exempted from the requirement of prior notification to the Commission, Member States may implement those measures without prior Commission scrutiny. In addition, the Commission in the so-called de minimis Regulation, provides a ceiling below which measures are deemed not to constitute State aid within the meaning of Article 107 TFEU, and are exempted from the notification procedure, because they are considered not to have any effect on cross-border competition among Member States. In a State aid procedure, the counterpart of the Commission is the Member State. Once a measure is approved (or block-exempted), the Member State is authorised, on the basis of the Commission decision (or the applicable block exemption regulation), to disburse the aid to the beneficiary or beneficiaries. This may be done according to its national administrative set-up (at national or regional level for instance, or through specific aid granting bodies) and depending on the type of the aid measure. Only the Member State is a party to a State aid procedure, the beneficiary is merely a third party. 2.2.Background of the intervention 2.2.1.Description of the intervention and its objectives As explained above, an evaluation of the rules is justified by the need to determine whether the Broadband Guidelines are still fit for purpose in view of the rapid technological developments, reflected in changes in the market and in legislation. The general objective of State aid under the Broadband Guidelines is to facilitate the development of economic activities consisting in broadband deployment and related broadband network services, where such aid does not adversely affect trading conditions to an extent contrary to the common interest. The specific objectives are the following. Support the rapid deployment of broadband infrastructure, helping to bridge the “digital divide” The Broadband Guidelines must be coherent with EU policy and aligned with the rapid technological development in the sector, as this has an impact on competition between different platforms and different operators in the market. In particular, the categorisation of intervention areas (white, grey and black) needs to be critically assessed. This implies aligning the Next Generation Access (NGA) definition with technological and market developments, and EU policy. Directing State aid to where it is needed is essential for ensuring that State aid is used in an effective and efficient way which addresses market failures or major inequalities while minimising distortion of competition and protecting taxpayers’ resources.

Limitation of distortion of competition A central objective of the Broadband Guidelines is to ensure that competitive markets are maintained. A competitive process plays a role at different levels to protect private investment and limit the crowding out of such investment by State aid. A competitive selection procedure as a pre-condition for granting of State aid ensures competition between bidders and should help keeping aid to the minimum and to select the most effective operator and technology, without prescribing a particular technology to be used (technological neutrality). A detailed coverage analysis (mapping and public consultation) protects current and planned investments from overbuilding by public funds. Once the publicly financed infrastructure is in place, effective access shall be granted such that competition on the new platform between different operators and services providers is ensured. Furthermore, to ensure that public resources are used efficiently, use of existing infrastructure should be effective.



Transparent decision making Rules must be clear to enable Member State designing State aid measures that are compatible. This is even more important for measures under GBER as they are implemented without the Commission’s formal approval. Clarity is therefore key to a successful implementation of the State aid rules. In addition, the Broadband Guidelines aimed at reducing the administrative costs to the minimum necessary while ensuring that sufficient information is available in order to assess the performance of the State aid expenditure. It is also important to assess whether further guidance is needed or whether there is a need for simplification of the rules. Provisions concerning the deployment of broadband networks were introduced in the GBER adopted on 17 July 2014, following the modification of the Council Regulation No. 1588/2015 (‘Enabling Regulation’) that allows the Commission to declare that certain categories of State aid are compatible with the internal market and exempted from the notification requirement provided for in Article 108(3) TFEU. The GBER aimed at enabling manifestly compatible State aid measures for the deployment of broadband networks to be introduced swiftly. The GBER plays a crucial role in simplifying and clarifying rules, cutting red tape and allowing for well-defined projects to go ahead as fast as possible. 2.2.2.Baseline The Commission has considerable experience with assessing State aid granted for the roll-out of broadband networks. Since 2003, it has taken over 170 decisions in this sector . On the basis of its case experience, in 2009 and 2013 the Commission adopted Guidelines for the assessment of State aid in broadband. As the 2009 Guidelines expired after 3 years, a review process started in April 2011, in view of the rapid technological developments in the sector. The Impact Assessment on the 2009 Guidelines explored options for a review. The baseline scenario was prolonging the 2009 Guidelines for three more years. Therefore, the evaluation baseline as regards the Broadband Guidelines is the situation before 2013, when they entered into force. The evaluation baseline as regards the GBER provisions related to the deployment of broadband networks is before 2014, when they entered into force. This evaluation does not assess the scenario that the State aid rules in the broadband sector in force would simply be abolished. The consequence of the absence of substantive rules would be the direct application of the Treaty, i.e. the notification of each and every measure constituting State aid in the meaning of 107(1) TFEU and the assessment of their compatibility by the Commission carried out directly under the Treaty, without any substantive guidance provided to Member States by relevant soft law. It is therefore not a question of State aid guidelines for broadband or not, but to evaluate the existing rules against the situation as before their entry into force. 3.Implementation of the State aid rules for the deployment of broadband networks 3.1.The rules The Broadband Guidelines set out a number of requirements which need to be fulfilled for State aid measures to be compatible with the TFEU. First, they must be in line with the EU policy targets embedded in the Europe 2020 Strategy (‘EU2020’) and the Digital Agenda for Europe initiative (‘DAE’): (i) bring basic broadband access to all Europeans by 2013; (ii) ensure that by 2020 all Europeans have access to much higher internet speeds of above 30 Mbps; (iii) 50% or more of the European households subscribe to internet connections above 100 Mbps. Second, they must comply with the following compatibility criteria: -Member States are required to identify the target area of the intervention and classify it as white/grey/black NGA areas in terms of NGA infrastructure existing and planned in the near future, on the basis of a detailed mapping and public consultation, taking into account the various technologies that can reliably provide at least 30 Mbps download speeds. -Member States must demonstrate that the publicly supported interventions will deliver a significant improvement compared to what the infrastructure present or planned can offer, bringing significant new investments in the broadband network and significant new capabilities to the market in terms of capacity, speed and competition (‘step change’). -Member States must select beneficiaries through open competitive selection processes based on transparent, non-discriminatory criteria allowing the selection of the most economically advantageous offer. As an exception, Member States may also choose to rely on a direct investment, where the public authorities deploy and manage a network, directly or through a fully owned in-house entity, who would typically also be the wholesale operator of the network. The selection procedure needs to be technologically neutral, -The publicly supported network must ensure effective open and non-discriminatory wholesale access to third parties, in line with the principle of technological neutrality. Wholesale access prices should be based on pricing principles set by the NRA or on benchmarking.

-It is recommended to use existing infrastructure in order to avoid an unnecessary and wasteful duplication of existing networks and reduce the amount of public funding. -For projects with an aid amount above EUR 10 million, a mechanism to ensure the absence of overcompensation has to be introduced. -Member States are required to submit reports to the Commission on the implementation of the scheme every two years since the date the network was put in use. The GBER lays out the conditions under which Member States may implement aid measures supporting the deployment of broadband infrastructures without requesting the Commission’s prior authorisation. It covers aid measures that are deemed per se manifestly compatible. Article 52 of the GBER regulates aid measures for the deployment of broadband networks in areas where there is no infrastructure of the same category (either basic broadband or NGA network). Besides the compatibility criteria specific to the public support for the deployment of broadband networks, the Broadband Guidelines and the GBER include obligations applicable to all State aid measures. These are: -Transparency of State aid measures and awards: The aim of transparency requirements is to promote compliance, reduce uncertainties and promote a level playing field in the internal market for Member States and companies. In this context, Member States have to, as a condition for granting aid (both under the Broadband Guidelines and corresponding provisions of the GBER), publish on a central website information on aid measures and their beneficiaries. The transparency requirement applies to all aid measures exceeding EUR 500 000 per beneficiary. For more details, please refer to Section 3.2.2 ‘Transparency aid module’. -Monitoring: To ensure that aid measures comply with the rules in a consistent way throughout the EU, the Commission monitors how Member States apply approved or exempted aid schemes. To this end, the Commission services set up an annual monitoring process during which they select a sample of State aid measures for further scrutiny already in 2006. The Commission services check both the compliance of the selected measures with their legal basis and their implementation. For more details, please refer to Section 3.2.3 ‘Monitoring’. -Evaluation plans: To further ensure that the positive effects of State aid outweigh its potential negative effects, certain notified or block-exempted schemes are subject to an ex-post evaluation. In principle, this only applies to national aid schemes and aid schemes with large aid budgets, containing novel characteristics or when significant market, technology or regulatory changes are foreseen. The aim of the evaluation of such schemes is to assess the actual impact of aid, to enable Member States to improve the design of future schemes by making them less distortive and more effective, and the Commission to design better State aid rules for the future. For more details, please refer to Section 3.2.4 ‘Evaluation plan’. 3.2.Description of the current situation 3.2.1.Number and Types of State aid measures Between 2013 and 2020, Member States put in place 233 publicly supported broadband measures (62 approved by decisions and 171 GBER measures). This represents EUR 62.7 billion of total State aid spending, of which EUR 20 billion was reported by Member States as spent under the GBER and EUR 42.7 billion under Commission decisions. There is a significant difference between the total amount of public funding and the number of projects among Member States. In addition, there is a significant gap between approved aid and money actually spent by Member States. Part of this gap is due to the delay in implementation. In some cases, after having received the approval, due to internal reasons (e.g. elections), the planned measures were abandoned (e.g. France’s first Très Haut Débit scheme). In other cases, the implementation of large measures requires time, some of them covering hundreds or even thousands of individual projects. For the period between 2014 and 2019, only EUR 7.8 billion of aid were actually spent (14% of approved amounts). Even though all Member States operate within the policy framework of the Digital Agenda and the Gigabit Society Communications, among Member States there is a significant difference also with regard to the type of projects funded with State aid. Thus, the implementation of the Broadband Guidelines varies across aid measures and across Member States, as the latter had different targets and objectives. The variation is compatible with the Broadband Guidelines which provide sufficient flexibility for Member States to an address their individual concerns. Nevertheless, the objectives set by national administrations can have far-reaching consequences for the technologies deployed and competition for State aid. Objectives can refer to downstream and upstream bandwidths and/or other capabilities. Openness to competition can also be expressed as an objective. Some countries such as France, Spain and Portugal have set more ambitious objectives or targeted State aid towards very high capacity infrastructure from an early stage, which was mostly delivered via full fibre. Others, such as Austria, Germany, Greece, Hungary and the UK, began with more modest objectives, which initially served to support the deployment of FTTC/VDSL infrastructure. Until recently, Member States focussed on achieving the Digital Agenda 2020 targets, but the national broadband strategies of many Member States are progressively incorporating the targets for 2025 as set out in the 2016 Gigabit Communication and even the targets for 2030 of the Digital Decade Communication. 3.2.2.Transparency aid module

As explained in Section 3.1 ‘Rules’, Member States must publish information on the aid beneficiaries on a central website. The Commission has set up the State aid Transparency Public Search (TAM) which centralises this information. Only six Member States have published information on aid beneficiaries: Austria, Germany, Lithuania, Finland, France and Italy. The number of individual beneficiaries that have received aid measures exceeding EUR 500 000 (the publication threshold) varies greatly between Member States, as shown in Figure 1. Figure 1. Number of aid measures per individual beneficiaries and per Member State published in TAM. Source: TAM In total, EUR 3.3 billion have been reported, which represent nearly half of the amount of aid spent (see Section 3.2.1 ‘Number and Types of State aid measures’). This suggests that approximately half of the aid spent in total concerns projects of less than EUR 500 000. 3.2.3.Monitoring As explained above, the purpose of ex-post monitoring is to check whether a State aid measure under GBER or the Broadband Guidelines has been correctly implemented. The monitoring aims at assessing the implementation of either an individual measure or a State aid scheme. Every year the Commission randomly picks a few such measures to be monitored. Between 2013 and 2020, 24 monitoring cases have been processed. 7 of them addressed State aid for broadband under GBER, the rest were notified measures. Figure 2: Number of aid measures monitored between 2013 and 2020 Source: DG COMP data No major irregularities relating to the sectoral-specific requirements (i.e. broadband related conditions) were detected and all the monitoring cases could be closed without further action. With regard to notified measures, the monitoring showed that the compatibility criteria of the Broadband Guidelines were implemented without major difficulty. The data which have been provided in this context have fed into the WIK study (referred to in Section 4.1 ’Data collection and assessment’). 3.2.4.Evaluation Plan When notifying large schemes, Member States have to provide an evaluation plan. The aid evaluation under these plans is different from the present exercise that concerns the rules evaluated under the Better regulation guidelines. It is carried out ex-post and looks, in particular, into macro-economic effects of the State aid measure. Up to 2020, the Commission approved nine evaluation plans with large budget involved and/or containing elements of novelty . While no overall conclusions can be drawn regarding the State aid policy as such, due to the punctual nature of the information submitted, the final reports nevertheless provide some useful indications. What can be noted so far is that the average quality of the State aid evaluations completed is generally good. Member States are producing clear documents that are compliant with the approved evaluation plans. The quality and limitations of the data are addressed in detail and the (overall positive) results of the counterfactual impact evaluations are credible. 3.2.5.Technological advance Evolution of network performances During the period covered by the Broadband Guidelines the main targets for broadband in Europe were set by the Digital Agenda for Europe (see Section 1.1 ‘Context’). These targets focused on achieving universal availability of 30 Mbps and a 50% take-up of 100 Mbps broadband. In 2016 ambitions were raised to Gigabit capable infrastructure in the context of the Gigabit Society goals (see Section 3.2.6 ‘State aid policy development and recent events’), released at the same time as proposals for the European Electronic Communications Code. In 2021, additional targets for 2030 were added to complement those for 2025, confirming EU’s objectives regarding coverage with networks able to support at least 1 Gbps download speeds by 2030. An analysis by WIK-Consult in the context of studies on ‘Danish Telecommunications Market in 2030’ and on ‘Relevant Markets susceptible to ex ante regulation’ highlights that advanced applications e.g. in the field of smart cities, smart agriculture, e-health and e-education are likely to require dedicated capacity, in excess of the capacity available through mass-market infrastructure. Meanwhile, the needs of small businesses and consumers are also likely to increase, not only to support the simultaneous use of multiple devices and exploit improvements in video quality, but to enable the use of critical public services including e-health and e-education. These needs may be even greater in rural areas which lack ready access to health and education facilities. In the medium term, copper or upgraded copper technologies may not to be able to meet these needs. There may thus be a need to distinguish copper and upgraded (FTTC/VDSL) copper from technologies which offer very high capacities, including the capability to offer 1 Gbps and above. Alongside full fibre, technologies which currently would appear to be able to provide 1 Gbps download speeds include cable networks upgraded to DOCSIS 3.1 or above and g.mgfast networks, which involve the deployment of fibre close to the end-user with copper limited to the final metres. Certain wireless technologies – in particular 5G fixed wireless access - also may be able to provide 1Gbps speeds, in particular if latency is further improved. However, the capabilities and reliability of this technology are likely to remain below that of FTTH or equivalent, making it a solution that is most appropriate for remote areas or households in sparsely populated districts. As discussed above, so far in nearly all cases Member States targeted broadband State aid at NGA white or basic broadband white or grey areas. However, some recent cases have arisen in Germany, Spain and Greece, in which the authorities have sought approval for State aid to be provided in NGA grey areas. Based on the objectives defined in the 2016 Gigabit Communication, in these cases the Commission authorised public support for the deployment of the state-of-the-art networks in areas were less performing NGA networks were already in place.

Mobile versus fixed networks With the move towards a new mobile generation (5G) two issues have come up: substitutability between fixed and mobile infrastructure and joint use of infrastructure. Current case practice assumes that mobile and fixed networks are in separate markets. Mobile networks cannot (fully) substitute fixed networks and vice versa. State aid for mobile networks has therefore been assessed directly under the Treaty, relying on a mutatis mutandis application of the principles of the Broadband Guidelines. Thanks to the deployment of fixed fibre backhaul until base stations, the use of millimetre-wave frequencies, densification of sites and other developments, mobile 5G infrastructure may become a more close substitute to fixed infrastructure. However mobile networks can be affected by weather conditions and physical obstacles, including walls. In addition, there remains one important difference between the two types of networks. Mobile technology is a “shared” medium rather than a dedicated architecture. As a result, speed and capacity vary with the number of users in the network at a specific point in time. For that reason fixed (including 5G based fixed-wireless networks) and (5G) mobile services, even if provided over the same network, may still be considered to be in separate markets. 3.2.6.State aid policy developments and recent events In the 2016 Gigabit Communication, the Commission set connectivity goals for 2025. These goals require for all European households, rural or urban, an internet connectivity of at least 100 Mbps upgradable to 1 Gbps speed. They also require socio-economic drivers, such as schools, hospitals and public administration to benefit from Gigabit connectivity and all urban areas and major transport paths be covered by 5G networks. The term ‘100 Mbps upgradable’ has been clarified in the Shaping Europe’s digital future 2020 Communication where it has been explained that, as the decade progresses, households will increasingly need 1 Gbps. This would imply that by the end of 2025 households will need such quality of service. This was confirmed by the Commission’s recent observations on the rapidly evolving demands for network capacity and the need to ensure sustainable investments into networks capable of offering Gigabit speeds to cater for the European data economy beyond 2025. Indeed, the Digital Compass Communication envisages that by 2030 all European households will be covered by a Gigabit network, with all populated areas covered by 5G. The COVID-19 pandemic broke out in March 2020 and affected the entire European economy and society. As regards connectivity, it underlined the role of very high capacity networks for people, businesses and public institutions. Very high capacity networks, including but not limited to fibre and 5G, are critical for the recovery from the crisis and to foster EU’s resilience. On 27 May 2020, the Commission adopted its Recovery Plan to tackle the consequences of the crisis stemming from the COVID-19 outbreak. In this context, under the Next Generation EU programme, the Recovery and Resilience Facility (RRF) supports as a priority the digital transition and contributes to the achievement of the EU Digital Strategy. For this to happen, national Recovery and Resilience Plans (RRP) should dedicate at least 20% of allocated funding to supporting the digital transition, including the deployment of very high capacity infrastructure. In recent cases, the Commission has dealt with a number of measures supporting significantly higher capacities to reach Gigabit targets in line with the updated objectives and responding to growing connectivity needs accentuated by the COVID-19 crisis. Very high capacity networks are also essential to achieve sustainability goals. The EU’s 2050 objective of climate neutrality as set in the European Green Deal cannot be reached without a fundamental digital transformation of the society. As regards the Digital Strategy, on 19 February 2020, the Commission issued a Communication on Shaping Europe’s digital future, which summarises the key objectives to promote technological solutions that will help Europe pursue its own way towards a digital transformation that works for the benefit of people and respects fundamental values. One of the components of this transformation is the secured and performant connectivity infrastructure that contributes to the transformation of mobility patterns allowing teleworking, video-conferencing, electronic commerce and thus helps greening the society and makes an important contribution to the main environmental objectives. 4.Method 4.1.Data collection and assessment The current evaluation is based on a wide range of data sources/inputs. When assessing the data, the Commission started with the analysis of the case practice and then assessed the findings of the study commissioned to WIK in 2019. The analysis was complemented by the information collected during the public consultation and the targeted consultation. Finally, all other data sourced listed below were taken into account, in order to triangulate the data collected in the course of the evaluation. Public authorities and private stakeholders had the opportunity to provide their feedback on the Roadmap on the evaluation of the State aid rules on broadband infrastructure deployment from 16 June 2020 until 11 August 2020 (see in detail Annex 2, Synopsis report). An open public consultation was also carried out in order to gather inputs from a broad range of stakeholders. The public consultation reached out to all relevant stakeholders and in addition gave unlimited access to everybody who wished to contribute. In addition, the Commission launched a targeted consultation. The targeted consultation took the form of an online questionnaire addressed to the main stakeholders and interested parties (beyond the general public) on more specific issues regarding the Broadband Guidelines and the relevant provisions of the GBER. The targeted consultation was open (i.e. published on DG Competition’s website As explained above in Section 2.1 ’Legal and policy background’, the interlocutor of the Commission in State aid procedures are the Member States. It is the Member States at national level and other public authorities (for instance regional and local authorities) who design public policies in line with State aid rules and apply the State aid rules when granting public support. They are also the ones to disburse State aid. As such, this evaluation pays special attention to the responses of the public authorities as they are of particular relevance to the analysis. The input from Member States was gathered via the open public consultation, the targeted consultation and through various meetings and workshops in the context of the European Broadband Competence Offices Network. In addition, the findings of a study, commissioned to external experts led by WIK in 2019 and completed in 2020, on the role of “State aid for the rapid deployment of broadband networks in the EU” (the WIK report) were also considered for the purpose of this evaluation. This report looks in detail at the implementation of the Broadband Guidelines for all Member States (including UK). It further entered into a data gathering exercise involving Member States and private stakeholders. The 25 Member States responding to the data gathering exercise provided information about 42 schemes (and associated projects) and 12 individual aid measures. Some of the report’s main findings are included in the following assessment. The WIK report provides an overview of the implementation of broadband State aid measures across the EU during the period 2013-2019 and, with the aid of case studies, interviews and a survey of stakeholders, assesses challenges and best practices in the application of State aid to support broadband deployment. The WIK report also examines to what extent the Broadband Guidelines contributed to supporting the deployment and take-up of NGA in areas where the economics of network deployment are challenging, and whether the aid has been efficiently distributed. The external expert applied multiple research methods when preparing the study, including desk research, case studies, qualitative and quantitative questionnaires sent to selected stakeholders, structured interviews with experts and with selected stakeholders from different Member States. Other reports were also used, such as the report on ‘State aid for broadband infrastructure in Europe – Assessment and policy recommendations’ (CERRE, 2018); Study on ‘Future electronic communications product and service markets subject to ex-ante regulation - Recommendation on relevant markets’ (WIK, 2020); ‘Supporting the implementation of CEF2 Digital’ (Ecorys, WIK et al., 2020). Moreover, information from the Court of Auditors’ Special Report on Broadband, published in June 2018 was considered. Another important data source used in the evaluation is the State aid Scoreboard that comprises State aid expenditure made by Member States falling under the scope of Article 107(1) TFEU. The data is based on annual reporting by Member States pursuant to Article 6(1) of the Implementing Regulation. Expenditure refers to all active aid measures, for which the Commission adopted a formal decision or received an information sheet from the Member States in relation to measures qualifying for exemption under the GBER. Internal Commission data used for the assessment include for instance monitoring results and interpretation questions by Member States. Commission’s case practice is a major source of insight. During the period covered by the assessment, the Commission has adopted 62 decisions. The Commission must assess the planned aid measures before taking a decision on its State aid character and compatibility. In order to be coherent, all new decisions must therefore not only take account of newest developments in EU legislation and judgments by the European Court of Justice but also take account of this body of decisions which evolves through the case practice.

Court judgments, desk research, literature review and internal statistics such as the Transparency Award Module have also played a role in data gathering. DG Competition’s Chief Economist Team supported the econometric analysis. The experience gathered by the European Broadband Competence Offices (BCO) Network was also used. The BCO Network brings together EU Member States’ national and regional public authorities in charge of broadband deployment to exchange knowledge and good practices with peers, experts and European Commission representatives. The meetings (quasi monthly) of the BCO Network have provided valuable input on whether and how the Guidelines and the GBER have contributed to the deployment of broadband infrastructure in a way that fosters competition. The meetings also gave an opportunity for the members of the BCO Network to bring up their comments and questions concerning both the general and the targeted consultation. The work of BEREC, the body of European regulators for electronic communications representing at the European level the national regulatory authorities was also taken into account. BEREC usually assists the Commission and the national regulatory authorities in implementing the EU regulatory framework for electronic communications. It regularly proposes opinions, recommendations, guidelines, advices or regulatory best practices, which are very useful sources of information on the functioning of the internal market in the electronic communications sector. In particular, the work on the draft BEREC Guidelines on Very High Capacity Networks and on the draft BEREC Guidelines on Geographical surveys of network deployments was considered. Finally, several bilateral meetings and conferences were organised with stakeholders, notably with Member States’ representatives in the Broadband Competence Office (BCO) network, BEREC (Body of European Regulators for Electronic Communications), the Council of European Municipalities and Regions, and the Committee of Regions. 4.2.Challenges and robustness of findings When carrying out the evaluation, a wide range of sources and inputs was used, including case practice, reporting from Member States, various reports by external consultants and direct input from stakeholders (as described in details in Section 4.1 above). This ensures the robustness of the findings of the evaluation. However, during the evaluation, certain challenges had to be overcome. One challenge stems from the fact that the impact of the rules is not tangible yet in many cases. The effects of State aid measures only materialise with a certain delay and not sufficient time has elapsed in order to fully capture the impact. The Broadband Guidelines and the relevant provisions of the GBER entered into force in 2013 and 2014 respectively. The associated benefits started materialising gradually, since the roll-out of broadband infrastructure involves long-term investment projects. Infrastructure needs to be first built and be operational for a number of years in order to measure the impact of the rules. Another challenge is the difficulty to find available data. The Member States’ reporting obligation under the Broadband Guidelines starts from the date when the network is put into use (see paragraph 78.k. of the Broadband Guidelines). The time span between the approval of the aid and the actual deployment of network varies, but it can take up to 4 years or more. Up to date the Commission received only a limited number of reports from Member States. However, various sources from third parties (such as the WIK report) provided a wealth of data for the analysis. There is a general limitation attached when it comes to the extrapolation of punctual evidence, such as the results of case studies. The results of a case study are restricted to the specific circumstances of the beneficiary, aid measure and Member State, and therefore they do not provide a sufficient basis for concluding on the overall State aid rule concerned. When assessing information from case studies, the Commission always took into account this limitation, making sure that it did not apply the outcome of case studies in a generalised manner. Furthermore, despite the efforts to publicise the open public consultation and the targeted consultation via appropriate communication channels depending on the target audience, the representativeness of the replies is limited. For example, the public consultation attracted in total 122 replies, which is a small number compared to the reference population of companies and public authorities potentially affected by the State aid rules. This limitation has been taken into account when analysing the results of the public consultations, together with an effort to mitigate its impact by triangulating with other data sources described above. At the same time, it should be noted that out of the 122 replies many came from representative associations that have approximately 3,200 members. Moreover, the Commission has extensive, regular contacts with the public authorities in the BCO network (through various seminars and trainings) where public authorities had the opportunity to express their views about the functioning of the Broadband Guidelines. Finally, the long term effects of the COVID-19 outbreak - a major shock to the global and Union’s economies - could not be assessed in this SWD, since these are quite recent developments and their full impact is not known yet. Another recent development is the adoption on 27 May 2020 of the Commission’s Recovery Plan to tackle the consequences of the crisis stemming from the COVID-19 outbreak. The effects of the Recovery Plan and the corresponding national Recovery Plans on broadband deployment are not known, since the national Recovery Plans are not yet implemented. Therefore, the SWD cannot take into account the impact of these measures. 5.Analysis and answers to the evaluation questions This Section presents the assessment of the evaluation, based on the five evaluation criteria using the evaluation questions as listed below (see also Section 1.3 ‘Evaluation criteria). For the purpose of the analysis, the term 'public authorities’ refers to national, regional, local authorities, and the term ‘stakeholders’ covers businesses, business associations and electronic communications operators. 5.1.Effectiveness This Section evaluates the extent to which the objectives of State aid rules for the deployment of broadband networks (Section 2.2.1) have been achieved against the baseline scenario (Section 2.2.2). 5.1.1.Support the rapid deployment of broadband infrastructure, helping reduce the 'digital divide’ The objective to support the rapid deployment of broadband infrastructure implies that the Guidelines should provide Members States with an enabling framework that facilitates the deployment of broadband infrastructures in order to: -provide a high level of broadband coverage, in line with DAE connectivity targets for 2020 and bringing connectivity to low population density, rural and remote areas,

-address market failures or important inequalities, -ensure high quality and competitive services at affordable prices. 5.1.1.1. Facilitate the deployment of broadband infrastructures, in line with 2020 DAE connectivity targets and bringing connectivity to low population density, rural and remote areas Achieving the DAE targets (see Section 3.1 ‘Rules’) required significant investments, the bulk of which has come from the private sector, especially in densely populated urban areas where operators could obtain good returns on investment. However, the DEA objectives could not be reached without support of public funds in market failure areas, in particular in less populated remote and rural areas. In such areas only relatively few customers are present and returns on investment are uncertain and thus additional public financing was and, as demonstrated below, is still required. According to available data (State aid Scoreboard), Member States have increased their investment for broadband networks in comparison to the period 2009-2012 under the 2009 Broadband Guidelines. Between 2013 and 2020, 233 publicly supported broadband measures (62 decisions and 171 GBER measures) were put in place, for more than EUR 62.7 billion in total, against 76 decisions amounting to 13.5 billion euros between 2009-2012. For the period between 2014 and 2019, only EUR 7.8 billion of aid was actually spent (see above Section 3.2.1 ‘Number and Types of State aid measures’). This represents an average annual State aid expenditure of EUR 1.3 billion, compared to EUR 325 million over 2010-2013. This difference between the aid amounts allocated and actually spent could be explained by the time the deployment of the network takes and by the delays in the implementation of the approved measures (see Section 3.2.1 ‘Number and Types of State aid measures’ and Section 5.2.2 ‘Have the 2013 Broadband Guidelines led to more efficient State expenditure?’). More specifically, regarding the GBER, since its entry into force, Member States have increasingly used this instrument, which enables them to implement manifestly compatible projects without prior authorisation by the Commission. As of the GBER entry into force, annual GBER measures have even outnumbered annual measures approved by the Commission. This illustrates that the GBER offers a useful possibility for Member States to swiftly implement broadband deployment projects. For the total period between 2014 and 2019, 77% of all broadband measures (more than 4.5% in value terms) has been disbursed under State aid decisions. The higher amount of annual expenditure for measures approved by the Commission than implemented under the GBER is due to the limitation in the budget for measures to be implemented under the GBER. This suggests that the threshold for the application of the GBER may have been too low. Indeed, with a higher threshold a higher number of manifestly compatible projects fulfilling the GBER requirements could be put in place without prior authorisation by the Commission, this way further accelerating the broadband deployment in remote and rural areas most in need. The above-mentioned growing number of measures and corresponding increased State aid expenditure in the broadband sector correlates with the enlarged coverage of broadband networks in the EU between 2013 and 2020. According to the latest Digital Economy and Society Index (DESI), basic broadband is available to 98% of households in the EU and 89% of EU households have access to next generation access networks (NGA) capable of providing at least 30 Mbps download, whereas 73% are covered by ultrafast networks capable of providing at least 100 Mbps download. Finally, 47% of EU households benefit from the Gigabit connectivity. Primary internet access at home is provided mainly by fixed technologies, which remained over 2013-2020 stable at ca. 98%. Mobile services of forth generation (4G) are almost ubiquitous with 99.7% of households covered by at least one operator in Europe. More specifically, DESI report shows that the coverage of NGA networks increased from 61% in 2013 to 89% in 2020 (+45%) and the coverage of VHCN increased from 14% in 2013 to 54% in 2020 (+285%). In rural areas, fixed coverage (at least 2 Mbps) has increased since 2013 from 84% to 90% (+6%) in 2020; NGA coverage improved significantly, with a rise of 42 percentage, from 18% in 2013 to 60% in 2020. In 2020, 28% of households in rural areas are covered with VHCN, against 3.6% in 2013 (+24.4). Despite the increase, broadband coverage of rural areas remains challenging: 10% of households are not covered by any fixed network (vs 98% overall) and 37% are not covered by any NGA technology (vs 11% overall). Mobile broadband availability is at 99.7% in the EU and 98.6% in rural areas, although mobile is still mainly used as a complementary technology rather than a substitute for fixed technologies. Having regard to the data above and their evolution, it can be concluded that the broadband coverage has improved notably since the current State aid rules for the deployment of broadband networks entered into force in 2013. Public support was at least a catalyst for investment in rural broadband with more than EUR 1.8 billion provided under the GBER, i.e. in areas where no NGA infrastructure was present or planned for the near future, which are usually remote rural areas. It is however difficult to attribute unequivocally this improvement to the State aid rules in the broadband sector and to quantify their contribution to this improvement. On the other hand, the WIK external study concludes that both the Broadband Guidelines and the corresponding provisions of the GBER have been effective in supporting the deployment of NGA networks. It suggests that the rules are likely to lead to further material increases in take-up of NGA-based services in the coming years. According to the study, the Broadband Guidelines have made a significant contribution to supporting the deployment and take-up of NGA in areas where the economics of network deployment are demanding, i.e. in rural areas that as the WIK report highlights have been predominantly targeted by public interventions. These findings are confirmed by the open public consultation, where respondents consider largely that the Guidelines and GBER have partially been successful in supporting investments in line with EU DAE connectivity targets and facilitated the deployment of broadband infrastructures. Very few respondents (mainly businesses) considered the objectives have not been met at all. The same is true for bringing connectivity to low population density, rural and remote areas, as respondents are mostly positive about the Guidelines and the GBER meeting this objective. This outcome corroborates with the general findings of the targeted consultation, which are discussed below. The results of the evaluation show that the main factors that have affected in a direct way the swiftness of the deployment of the broadband infrastructure are (i) alternative forms of public interventions, (ii) different types of investment models and (iii) the use of the existing infrastructure. The Broadband Guidelines recognise that the deployment of broadband networks may take different forms besides providing direct public funding for the deployment of broadband infrastructure. In this context, the Guidelines invite Member States to encourage private investment via appropriate national ex ante regulation and to undertake other actions to stimulate insufficient demand. Should regulatory policies not succeed in stimulating private investment due to the market failing to provide satisfactory outcome, public authorities may decide to fund a broadband infrastructure with the aim to achieve the coverage objectives set at European level. In the targeted consultation, public authorities indicated that they have used alternatives to the financing of the deployment of infrastructure, such as measures covered by the cost reduction directive (50% of all respondents); regulatory measures (33%); civil engineering (22%); easing access rights (19%) and others (such as spectrum rights of use or co-investment obligations) (24%). 54% of respondents consider alternative measures were effective in supporting broadband coverage and penetration. The Guidelines enable Member States to choose the most appropriate form of intervention, for instance gap funding model, support in kind, concessionary model or state-operated broadband network model. The WIK report observes that the direct investment model, where the public authorities deploy and manage a network, directly or through a fully owned entity, who would typically also be the wholesale operator of the network, allows for a quicker deployment of broadband infrastructure compared to other models. According to the WIK report, this is due to the fact that public authorities generally consider positive externalities and tend to take into consideration welfare effects, leading them to prioritise coverage across a given area, rather than profit maximisation. In addition, synergies between municipal infrastructures and greater participation of the population and local communities have a positive impact on the rapidity of the deployment of broadband infrastructure. However, respondents to the targeted consultation expressed less clear-cut views as some consider that the direct investment has been an effective and efficient way of deploying networks, while others find it has had a negative impact on competition. The Broadband Guidelines consider that sharing information on existing infrastructure could facilitate the roll-out of broadband networks. They require that any operator wishing to bid for public support and which owns or controls infrastructure should provide information on such infrastructure. In addition, the Broadband Guidelines encourage Member States to setup a national database on the availability of existing infrastructures that could be reused for broadband roll-out. 41% of the respondents consider that the requirement for national databases on existing infrastructure is totally relevant. However, respondents are divided as regards the effectiveness of this provision, namely whether it has actually enabled other operators to use existing infrastructure. Most of the respondents agree with the fact that the obligation to provide information about existing infrastructure should have included an obligation to provide access to it (43%). Furthermore, the Broadband Guidelines require Member States to publish information on aid measures and beneficiaries on a central website. This ultimately aims at enabling third-party operators to identify the aid beneficiaries to notably request access to the subsidised network. Respondents to the open public consultation largely agreed that the Broadband Guidelines provisions ensure adequate access to information (77%). This said, in practice, there are significant discrepancies in the actual use of the existing infrastructure: the proportion of subsidised broadband networks that have been deployed using existing infrastructure varies from 0% to 100% according to the results of the targeted consultation. This corroborates with findings of the WIK report that identify as a second reason for delays in deployment of broadband infrastructure problems with accessing existing infrastructure (for more details, see Section 5.2.2 ‘Have the 2013 Broadband Guidelines led to more efficient State expenditure?’). In light of the above, it can be concluded that the State aid rules do not sufficiently provide for the effective use of the existing infrastructure.

Overall, compared to the baseline scenario (see also Section 2.2.1 ‘Description of the intervention and its objectives’), the Broadband Guidelines and the GBER have fostered broadband connectivity throughout Europe by facilitating the deployment of broadband infrastructures, in line with 2020 DAE connectivity targets and bringing connectivity to market failure areas, in particular low population density, rural and remote areas. 5.1.1.2.Address a market failure or major inequalities This divergence of views appears also in the targeted consultation and can be illustrated as follows. In order to facilitate interventions in market failure areas, the Broadband Guidelines require Member States to classify target areas, on the basis of mapping and public consultation, as white, grey or black areas in terms of existing and planned in the near future NGA infrastructure. Respondents to the targeted consultation found in majority that the distinction between white, grey and black areas is totally useful for identifying the areas most in need of State aid (50%), while 33% agreed only partially. Worth noting, there is a clear difference in opinions among respondents: private stakeholders find this provision useful, whereas public authoritiesare the only ones finding that the distinction is either not at all or neutrally useful. Regarding mapping, respondents to the targeted consultation consider that it enables partially the identification of areas most in need of a public support (48%). Here again responses differ between public authorities and private stakeholders. This time however private stakeholders have less positive views than public authorities. While private stakeholders are only partially convinced of the effectiveness of the mapping exercise (63%), public authorities find the mapping enables the identification either totally (36%) or partially (36%). Their concerns refer primarily to the scope and methodology of the mapping exercise, and secondly to the reliability of information on planned investments. Although the implementation of the mapping requirement is identified as one of the barriers to the deployment of broadband networks, nothing indicates that the mapping requirement itself hinders the deployment of broadband networks. According to the comments received during the consultation, the issue is rather connected to the way the mapping is carried out by authorities at national level. This suggests insufficient guidance by the Guidelines and is further discussed in Section 5.1.3 on transparency of the decision-making process. Similar views have been expressed with regard to the consultation of the market on the future private investments plans. Most of respondents consider that the public consultation enables partially to identify areas most in need for public interventions (35%), while 19% consider it does so totally. This time as well private stakeholders are more critical than public authorities. Hindering factors would be related, according to the respondents, to the lack of detailed guidance and the lack of differentiation of rules for small and big operators, for instance as regards the identification of credible plans or the definition of the near future for the identification of the future private investments. This matter is also further addressed in Section 5.1.3 concerning transparency of the decision-making process. This is also supported by the WIK report, which explained that NGA white areas have been the main target of State Aid interventions in the UK, Sweden, Spain, Portugal, Finland, France, Ireland, Italy, Netherlands, Estonia and Bulgaria, as shown in Figure 3. Number of projects servicing connectivity types by country However, aid was recently approved for State Aid network deployment projects in Germany and Spain, in areas classified as NGA grey, while a demand-side voucher scheme addressing NGA grey areas was approved in Greece. Public authorities also report that aid has been targeted towards basic broadband white areas in Denmark, France, Germany, Hungary, Lithuania and Poland. Figure 3. Number of projects servicing connectivity types by country Source: WIK report In conclusion, it is observed that a majority of projects involving public support for broadband deployment took place in white NGA areas where there is no fast broadband infrastructure in place or credibly planned in the near future. As the digital gap relating to access to NGA services is slowly but steadily closing (see Section 5.1.1.1 ‘Facilitate the deployment of broadband infrastructures’), the definition of the areas that are most in need of public support may have to evolve accordingly. When white NGA areas will be fully served with NGA services, it will be opportune to identify new areas in which public investment is necessary (for further discussion, see Section 5.3 ‘Relevance’). This being said, the evaluation of the rules shows that the key concepts used for identifying these areas most in need, regardless of their definition, has proven effective. Consequently, compared to the baseline scenario (see Section 2.2.1 ‘Description of the intervention and its objectives’), the objective of addressing market failures and major inequalities has been understood by Member States and the Broadband Guidelines and the GBER have been effective in achieving this specific objective. 5.1.1.3.Higher quality of services at affordable prices The deployment of a subsidised infrastructure provides additional capacity and speed on the market. The expected ultimate result is that this additional capacity should lead to maximizing benefits for consumers in terms of a higher quality of services and affordable prices. Most of the respondents in the open public consultation consider that the Broadband Guidelines and the GBER have partially been successful in meeting this objective and more consider they have totally than they have not at all. The Broadband Guidelines ensure that the subsidised networks offer higher quality by requiring that it delivers a significant improvement (‘step change’), in comparison to what can offer infrastructure present or credibly planned to be deployed in the near future. In this context, the review of the case practice confirms that public intervention in basic grey areas were authorised because the new publicly supported NGA infrastructure or a state-of-the-art backhaul were to bring significant new investments and significant new capabilities to the market in terms of capacity, speed and competition in line with DEA targets. In addition, the Commission has recently dealt with increasing number of interventions in grey areas that aim at achieving the new EU Gigabit targets. The Broadband Guidelines have been sufficiently open-ended to cater for developments expected in the near future and flexible enough to assess diverse public interventions, including those addressing the new EU policy targets. At the same time, technological developments have continued to accelerate, accompanied by a growing need of Gigabit connectivity reinforced by the current pandemic. The need to take into account these developments became thus increasingly urgent (see Section 3.2.5 ‘Technological Advance’). In the targeted consultation, the respondents take the view that the State aid rules in the broadband sector ensure that public investments deliver an improvement, either totally (22%) or partially (32%). In general, comments confirm the overall positive impact of the Broadband Guidelines in this context. The respondents stress nevertheless the need for clear and updated rules ensuring that a step change is genuinely achieved. As regard prices, especially in low density population areas they are high and it is often the very purpose of State intervention in such areas to realise an offer of 'affordable services' in order to replicate market conditions prevailing in other competitive broadband markets. The Broadband Guidelines state that wholesale prices should be based on the pricing principles set by the NRA and on benchmarks, including based on the average published wholesale prices that prevail in other comparable, more competitive areas. Based on the results from the targeted consultation, these provisions seem to have worked well in practice. Respondents are rather positive towards prices for accessing active services since 24% of the respondents find there has been no problem in that regard while 13% have experienced issues. Also, the WIK report considers that benchmarking wholesale prices against prices in other commercial areas is crucial in avoiding higher retail prices for customers. Finally, State aid rules are not listed by the WIK report amongst reasons of delays in deploying broadband infrastructure. The study explains that the delays are mainly due to problems in obtaining the necessary permissions and rights of way, challenges in using existing infrastructure, delays in the award of the contracts due to for instance stringent tender conditions and the complex multi-stage tender procedures (see also Section 5.2.2 ‘Have the 2013 Broadband Guidelines led to more efficient State expenditure?’). This finding is supported by the results of the open public consultation that revealed several barriers hampering even better achievement of the objective of the facilitation of the deployment of broadband infrastructure. None of them is pertaining to the State aid rules. The identified barriers are the following: administration related to national procedures (65% of respondents have faced such a barrier), rights of ways, permits and alike (60%), information sharing among public administrations (45%), the occurrence of legal actions (40%), issues related to civil engineering/construction specifications (38%) and transparency and access to documents (36%). In conclusion, compared to the baseline scenario (see Section 2.2.2 ‘Baseline’), the Broadband Guidelines and the relevant GBER provisions appear to have amplified benefits for consumers in terms of a higher quality of services and at affordable prices.

5.1.2.Limitation of distortion of competition The evaluation also analysed to what extent the Broadband Guidelines and the relevant GBER provisions have been effective in limiting distortion of competition along four main sub-criteria: -Protecting existing investment; -Protecting future investment plans; -Promoting competition in the electronic communication sector for the market (via competitive selection procedures); and -Promoting competition in the electronic communication sector in the market (via open access requirements). When requested to express their view regarding the extent to which the Broadband Guidelines have been effective in reducing distortion of competition, the majority of the stakeholders expressed quite positive views. In particular according to the majority of respondents guidelines have totally or partially helped: (1) protecting existing investment (57%); (2) protecting future investment plans (55%); (3) promoting competition for the market – via procurement requirements (55%); (4) promoting competition in the market – via open access requirements (59%). Figure 4. Replies to question 2 of the open public consultation To what extent have the Broadband Guidelines achieved the following objectives? Similar views were expressed with regards to the effectiveness of the GBER in limiting distortion of competition. Figure 5. Replies to question 3 of the open public consultation To what extent has the General Block Exemption Regulation specifically contributed to the following objectives? In the following paragraph, we will assess in more detail each of the above-mentioned sub-criteria. 5.1.2.1. Protecting existing investment As the vast majority of investment in broadband infrastructure in the EU comes from the private sector, it is essential to ensure that public interventions do not crowd out private roll-out of infrastructure. Otherwise, the overall effect of a public financing of infrastructure could even reduce total investment in the sector and thereby harm the objective of fostering a rapid deployment of high-speed infrastructure. However, a balance has to be found between protecting private initiative and ensuring public investment in areas which otherwise would not be adequately served. In what follows, the implementation of the current Broadband Guidelines is looked at to evaluate whether the right balance has been struck.

Mapping In Section 5.1.1.2 ‘Address a market failure or major inequalities’, information provided in the public consultation suggests that mapping exercises have generally been conducted to pinpoint commercially unviable target areas prior to the award of State aid. However, as discussed above, granting authorities and stakeholders have faced some difficulties when implementing the mapping requirement (see Section 5.1.1 ‘Support the rapid deployment of broadband infrastructure, helping reduce the ‘digital divide’’ and Section 5.1.3 ‘Transparent decision-making’). According to WIK, the most recent development in case practice (i.e. intervention in grey areas in Germany) may have increased complexity in the mapping demonstrating that the authorities concerned have taken seriously the need to avoid targeting aid at viable areas. However, as regards practical outcomes, WIK is not able to conclude whether there may have been crowding out of private investments in the context of specific applications of broadband State aid. Some operators responding to the online survey conducted by WIK highlighted concerns about inappropriate targeting of State aid resulting in impacts on private fibre or wireless deployments. Certain other respondents claimed that State aid had crowded out private sector investment without providing specific examples. However, the validity of these allegations is difficult to gauge without accurate mapping to illustrate the extent of any overlap with existing networks, and/or evidence that specific investment plans had been hampered as a result of the inappropriate targeting of State aid. As discussed in Section 5.1.1.2 ‘Address a market failure or major inequalities’ and Section 5.1.3.2 ‘Simplified Rules’, in the public consultation stakeholders’ expressed the need for more guidance as concerns the way the mapping exercise must be carried out. This raises the questions of whether the mapping requirement is adequate, in the light of the baseline scenario, for the purpose of limiting distortion of competition and whether it sufficiently takes into account all specificities of the planned project. In the public consultation, respondents have signalled that they have encountered problems in identifying the appropriate criteria to be used to carry out the mapping exercise. In particular, telecom operators, signalled that the criteria used to map existing investments should differ from the ones used to map future investments. Various stakeholders also suggested that such difference should vary according to the timeframe. Figure 6. Replies to questions 41 and 42 of the targeted consultation One of the key decision that must be taken when carrying out a mapping exercise is the granularity used to map broadband infrastructure. We have asked stakeholders if they have faced difficulties to identify the appropriate granularity. While the replies are equally split, there is a significant difference in the replies provided by the public authorities (both national and regional/local) and telecom operators and other stakeholders. In particular, while less than 30% of the public authorities that replied to this question signalled difficulties, 75% of telecom operators and other stakeholders replied that they had experienced problems. According to one stakeholder, electronic communications operators need clear and easy to use tools for carrying out the mapping exercise. Figure 7. Replies to question 44 of the targeted consultation Furthermore, according to the respondents other key concepts such as ‘home passed’ on the basis of which the mapping exercise is carried out could benefit from further guidance. Another area where respondents faced difficulties concerns mapping of wireless networks and mobile networks. The public consultation highlighted that stakeholders consider that the Broadband Guidelines do not provide adequate clarity on how to map wireless networks (i.e. fixed wireless networks) and mobile networks. BEREC considers that the mapping exercise for mobile networks should be carried out on the basis of grids rather than addresses. However, when wireless network are used to provide Fixed Wireless Access services, the approach should be consistent with the one for fixed network and the exercise should be based on addresses as well. Figure 8. Replies to questions 45 of the targeted consultation

This difficulty could also be explained taking into account that the vast majority of the respondents consider that fixed and mobile networks should be treated as belonging to different markets. One stakeholder considers that mapping of mobile infrastructure should focus primarily on the availability of network infrastructure rather than on available speed. Figure 9. Replies to question 46 of the targeted consultation

Fragmentation of areas (Leopard areas) In the context of mapping, the aid granting authority defines a target area where it wishes to intervene. For such target area, it has to establish the existing infrastructure in place. The mapping also has to take into account future investment plans of private operators. A public intervention is only allowed if existing and planned infrastructures are not sufficient. In some cases the target area is heterogeneous and some premises are already served with an infrastructure which is comparable to the network to be built with State aid. The area may therefore be mixed, partly white and partly grey. Overbuilding such performing infrastructure distorts competition. As a result, the current Broadband Guidelines in principle do not allow the overbuilding of such infrastructure in the target areas. However, case practice has shown that carving out such infrastructure may in some cases be very inefficient and increase significantly the amount of State aid needed (i.e. if one wishes to connect the house at the end of the street but it is not allowed to connect any other houses which are passed by). Thus, there exists a trade-off between the objective of limiting the amount of State aid to the minimum and the objective of limiting crowding out, as recalled in the baseline scenario (see Section 2.2.1 ‘Description of the intervention and its objectives’). This trade-off has also become clear from the public consultation for the evaluation of the Broadband Guidelines. Respondents were split. Among public authorities who replied to the question, 62% consider that such overbuilding should have been allowed at least to a limited extent. Instead, 68% of stakeholders consider that such overbuilding should always have been prohibited. This divergence reflects different interests. While public authorities wish to have more freedom to intervene to address market failures even where this may involve overbuilding existing infrastructure, stakeholders are concerned about the crowding out effect of such state intervention. 5.1.2.2.Protecting future investment plans The Broadband Guidelines and the GBER require the outcome of the mapping exercise to be verified in a public consultation. This way public authorities have the possibility to factor in future investment plans that private operators may have to deploy the network with their own funds. Respondents to the targeted consultation, in particular national authorities, totally or partially agree that the public consultations have been effective to identify the areas most in need of State aid (see Section 5.1.1 ‘Support the rapid deployment of broadband infrastructure, helping reduce the ‘digital divide’’). Respondents to the WIK’s survey, for the most part considered that aid had been targeted so as to avoid crowding out of commercial investments in Portugal, Finland, Slovenia, Sweden and Poland. Indeed, remarks from operators in Finland and Sweden suggest that some areas were so remote that the challenge was rather that the public subsidies offered were insufficient to attract sufficient complementary (rather than competing) private investments. Replies from stakeholders show that the public consultation is considered an effective tool to consult the market. This is particularly true for national authorities. Figure 10. Replies to question 57 of the targeted consultation The information collected suggests that the combination of the mapping exercise with the public consultation has been effective in avoiding that State aid crowds out private sector investment to any significant degree, especially as regards FTTH investments. This shows that the Broadband Guidelines and the GBER have been effective in reaching its objectives concerning protection of future investment plans, compared to the baseline scenario (see Section 2.2.1 ‘Description of the intervention and its objectives’). The results of the public consultation and the independent studies show that a public support for the construction of broadband infrastructure in market failure areas is unlikely to have resulted in crowding out of private investments to any significant degree. Indeed, when effectively implemented and targeted, State aid can lead to higher levels of private investments, as public support unlocks private financing and investment that may not otherwise have been available. While open public consultation is considered a very effective tool to identify market failure areas avoiding crowding out of current and future investment, there is a call on more detailed guidance (see Section 5.1.3 ‘Transparent decision-making) in the way the public consultation is carried out.

Figure 11. Replies to question 50 of the targeted consultation

In particular, respondents call for more guidance on future private investment plans for which stakeholders have signalled difficulties in correctly identifying and assessing them. Figure 12. Replies to question 55 of the targeted consultation One stakeholder stressed that the real risk would be that private investment plans may be disregarded because they are not sufficiently concrete since it’s oftentimes difficult or impossible to provide all the details at the level of granularity requested by the public authorities. This may reflect the difficulty to determine a standardised approach to the multitude of investment plans that could be brought forward by the market. Furthermore, other stakeholders consider that mapping/public consultation should be updated close to the launch of the public tenders to avoid outdated information on investment plans. 5.1.2.3.Promoting competition in the market Wholesale access obligation In order to avoid that the operator of the public financed network obtains a monopoly position, the Broadband Guidelines require that recipients of State aid should make available a range of wholesale access products, including duct and pole access, and access to unbundled fibre loops or sub-loops (or VULA where physical unbundling is not viable), as well as bitstream. The Guidelines also require that physical unbundling should be offered for NGA networks. While physical unbundling is likely to involve additional costs and thus reduce the scope of deployment compared with the absence of unbundling, this form of access has a positive impact on downstream investments, innovation and price competition. VULA and bitstream are likely to have a less pronounced impact on coverage, but are likely to provide less scope for innovation and price competition, or may (especially in the case of VULA), require detailed intervention to render the obligation effective. In line with the Broadband Guidelines, the monitoring exercise has shown that national and regional administrations mandated a range of wholesale access products in the context of State aid. However, according to the WIK study, there are indications that patchy implementation in some countries may have held back open access obligations from being fully effective. While data on take-up however is limited, it seems that actual take-up of physical unbundling was more of an exception. Service providers mainly request bitstream access, as this does not require any investment by the access seeker itself. Up-front investments may not be viable for access seekers in less dense areas. Such expenses may be considerable for instance in the case of access to ducts, as the access seeker would have to roll out its own fibre. The requirement to provide a wide range of wholesale access offers has been an area of contention in the application of the Broadband Guidelines, with some State aid bidders and recipients of aid claiming that the costs of offering certain forms of access outweigh their benefits. In the WIK study, costs of different access obligations were therefore assessed on the basis of a bottom-up cost model of an operator deploying in a representative “State aid zone”, while potential benefits were assessed with reference to literature and case studies. The key conclusions are that although Point to point (PtP) FTTH (which allows for unbundling) is the most costly of the technologies considered, these disadvantages are likely to be outweighed by the superior quality that is possible via this technology as well as the greater potential for competition on quality as well as price. FTTH is less likely to “crowd out” private investments as there are extensive market failures in Gigabit infrastructures and granting subsidies for FTTH may serve to complement (and level up) private investments that may otherwise have occurred in less highly performing infrastructures. These conclusions from the WIK study have been supported by the public consultation for the evaluation of the Broadband Guidelines. When asked about the trade-off between higher costs of physical unbundling (compared to other forms of access like VULA and bitstream access) and benefits for competition, 72% of all respondents consider that in most or even all cases the benefits outweigh the cost. This view was held by 82% of national authorities and by 58% of stakeholders. The lower percentage among the latter stems from the sub-group of aid beneficiaries where 50% considered that the costs outweigh the benefits. Aid beneficiaries have to bear such investment cost while they also expect less revenues from physical unbundling due to stronger competition. Private extensions According to the Broadband Guidelines, a Member State has to map the target area where the subsidised infrastructure is rolled-out. ‘Private extensions’ are extensions of such subsidized networks into adjacent areas financed with private money. They could be built either by the network operator itself (i.e. the aid beneficiary) or by access seekers who connect to the subsidised network and then build their own infrastructure. Private extensions can arise in the following scenarios: (a)The operator of the state-funded NGA network expands its network into the adjacent area;

(b)An access seeker, benefiting from the open access requirement, obtains access to the state-funded NGA infrastructure and expands into the adjacent area; (c)In the case of NGN networks (backhaul) an access seeker connects to the NGN and expands to an access area which is already NGA grey / black. (d)5G infrastructure is used for Fixed-wireless connections (FWA) into areas which are already covered by fixed infrastructure (e.g. NGA grey / black). In such scenarios, private extensions may have positive and negative effects. On the positive side, such investments generate more competition in the adjacent area to the benefit of consumers. T