BRX Update: State Aid August 2019

Combating white spots – Expansion of mobile networks

Anyone in Germany who wants to make calls outside the city is sometimes not able to do so due to the numerous "white spots" in the mobile network infrastructure. In most areas of Germany, a comprehensive infrastructure is not guaranteed. An expansion by the telecommunications companies (TC) is also not foreseeable in the next three years. Therefore, many municipalities and administrative districts want to eliminate these "white spots" on their own.

Possible models for the expansion of the mobile networks by municipalities and districts

The radio spectrums for the 5G network will not be available until 2021, so that mobile network expansion will only be possible from that time on. It may take some time until the expansion is completed. Therefore, it seems reasonable to provide a nationwide 3G or 4G network first, since the nationwide comprehensive 5G expansion will likely take some time.

Two models in particular can be considered in this context. On the one hand, the municipality or district can build the necessary infrastructure itself and then rent it to TC. In this case, the district or municipality must bear the costs of the expansion and take care of the maintenance, but receives the rental income. On the other hand, the municipality or the district can subsidize TC, so that they can carry out the expansion. The district or municipality is then not the owner of the infrastructure and has no rental income, but does not bear the costs of the infrastructure maintenance.

Expansion in the other federal states only on the basis of the NGA Framework

In this regard, it should be noted that the subsidies for the expansion of mobile communication networks must not constitute unlawful aid under Article 107 TFEU. Both models would grant subsidies to companies for which there has to be a legal basis. The possibilities are, however, limited. Due to aid already granted to the relevant telecommunication providers, it is not expected that State aid can be granted under the de minimis Regulation. A notified federal support programme for mobile networks is not in sight.

At present, there remains the possibility of eliminating the white spots through funding under the NGA Framework. White spots are areas where there is no broadband infrastructure at all and where it is unlikely that it will be built in the near future. Thus, funding is not possible if a certain infrastructure already exists in the respective area. Therefore, the NGA Framework is usually not suitable to close the mobile network gaps.

Bavaria funding programme

To date, Bavaria is the only federal state to have an own mobile network expansion funding programme aimed at eliminating white spots. In this program, LTE or 5G technology can be used to close gaps in mobile communication networks in regions that are not developed for economic reasons. The funding program was launched on 1 December 2018 and had previously been approved by the EU Commission as an individual notification.

Funding of mobile network expansion in Hesse planned

In September 2018, it was announced in the federal state of Hesse that a subsidy program for the expansion of mobile communication networks is planned. The municipalities are to provide EUR 50 million to support the building of mobile network infrastructure. Through this funding, up to 300 new mobile communication sites shall be established.

Expansion of mobile communication networks can be subsidised and approved on the basis of individual notifications from the EU Commission

However, this subsidised expansion is only possible if there is such a funding programme in the respective federal state. What can municipalities do if they are located in a federal state where funding is provided at state level?

One possibility of granting funding outside the NGA Framework is – like in Bavaria or Hesse – to have the funding programme approved by the EU Commission as an individual case notification. This allows municipalities to have "their" funding guidelines approved. We can provide legal support for the necessary notification process.

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