Anyone who has been close to any public sector involvement in broadband is likely to have come across references to the EU state aid Black, White and Grey areas but I get the impression that the meaning is often not well understood; this is perhaps not surprising because there are in fact two models and rarely in my experience is the specific one being used named.
A bit of background. In 2009 the EU laid down some guidelines on where it was reasonable for a state to consider intervening in the broadband market; this introduced the concept of Black, White and Grey areas for classifying market failure in both NGA and basic broadband areas. A black area is generally one with a strong, competitive market; grey with a developing market; and White where the market has essentially failed. White does not necessarily mean there is no broadband, just no functioning market.
- A Black area is one which has two competing fixed line infrastructures. So in the UK that typically means areas where both BT and Virgin offer services;
- A Grey area is one where there is only a single physical infrastructure with speeds of more than 2 Mbps;
- A White area is one where there is no choice of physical infrastructure and speeds of less than 2Mbps.
The definition for NGA is broadly the same:
- An area with competing NGA broadband infrastructures would be an NGA Black area. In the UK that might mean an area with both Virgin DOCSIS3 and BT Infinity services, for example. Somewhere like Bournemouth with City Fibre and Virgin would also be Black.
- An NGA Grey area is where there is only a single NGA provider with a wholesale market. This means an area with only BT Infinity would be classed as Grey.
- An NGA White area is one where there is currently is no NGA market available and no credible plans to deliver an NGA service within 3 years. This could include areas where Virgin is the only NGA operator and the footprint of many community projects like Alston Cybermoor as they don’t currently wholesale their services.
There are some major caveats in this!!
The NGA definition is somewhat complex. Only fibre-rich technologies are currently considered NGA technologies – some wireless and all satellite technologies are considered “complimentary”. This means an operator using a Gigabit microwave technology might under some circumstances legitimately face state subsidised competition from a 40 Mbps FttC provider – although the hope is that common sense and value for public funds has some influence on decisions!
What’s an Area?
The EU guidelines recommend that an “area” is not defined as an exchange district or any other technology defined footprint as it benefits one operator over others. So what is an area? In the local authorities have a choice between postcode areas and ONS “super output areas” (LSOA) but more are opting for postcodes – I’m only aware of Dorset opting for LSOA and I believe that may be being phased out.
Things you can’t ignore!
Anyone considering building a network, whatever their motives, needs to make sure both BDUK and the relevant local authority are completely aware, not just of the currently footprint but the credible expansion plans covering the next three years. Failing to be on their radar may mean state subsidised competition.
This can be a messy, complex space. Whoever you are, I’d strongly advise you not to do it alone!
(Updated to cover newer EU rules)