The EU has made a rapid start after the recent European elections by cutting the first bit of red tape – in fairness this has been coming for some time so perhaps its not possible to read too much into the timing – so will the EU’s changes to broadband State Aid matter to you?
New “block exemptions” make it easier to provide support to smaller projects without bureaucracy and delay. In particular, broadband projects will not have to be “notified” to or approved by the Commission if they are under €70 million – whether it’s for fast, next-generation networks or just “basic” broadband. That significantly cuts red tape for this essential investment – making it easier to roll out more networks for more people.
These enter into force on 1 July.
Essentially broadband projects up to €70m are now considered de minimis, or at a level where the potential for market distortion is considered too small to be worth reporting to the EU.
Does this make a big difference to UK broadband projects?
As I understand it, it still means the general terms in the EU’s broadband guidelines will need to be applied but, simply, the EU doesn’t need to know unless someone complains that the rules are being broken. Broadly speaking, the same rules apply but there may be a few forms fewer to fill in.
However, it may be worth seeking advice before rushing off to spend your new grant.
If, in the medium terms, your project is likely to need refinancing or there is realistic potential for you to hand-over the reins of your project to another organisation, you may find there are restrictions associated with not securing a formal state aid clearance.
For example, often assets waived under a block exemption can only be passed onto another organisation able to receive the same exemption – if that organisation has already used up its allowance there is a risk that they may be breaching the terms of the block exemption which could have consequences.
With the UK’s umbrella scheme run by BDUK, you may find the process is not as complex as a traditional full-scale state aid application but it may be just safer to seek formal clearance as an assurance to the future of your project.
The biggest danger for many broadband projects lie in assumptions – this is welcome news but its worth just checking how it may affect your project in the longer term. The liability lies with the recipient of the aid, not the grant-giver!