More Participation Possibilities Municipalities in Deployment Next-Gen Broadband
The availability of fast broadband can contribute to a positive
climate for establishing businesses and a good competitive
position. That is why the Dutch government wishes to stimulate fast
further deployment of next generation networks. Starting point is,
however, that the deployment is the responsibility of private
parties, and that in principle the government only ensures the
proper preconditions. Not only the central government authorities
play an important role in this respect, but also municipalities and
provinces. The local government is better equipped to make a
tailored policy, because it is aware of the local needs and
economic and social costs.
However, at the moment the possibilities for municipalities are
restricted because of an amendment of Section 5.14 of the
Telecommunications Act (Telecommunicatiewet)
("Tw") that was implemented in 2007. At that time the
municipalities were prohibited from constructing or offering public
electronic communication services or networks, or from having an
interest or control in a company offering such services or
networks. Some exceptions apply. See also J. Pennings' article
in our
Newsletter of May 2007.
Apparently, the restriction was too effective, amongst other
things due to the economic crisis. According to the State Secretary
of Economic Affairs, municipalities think that as a result of the
amendment 'nothing is allowed anymore'. That is why the
Ministry of Economic Affairs published draft instructions for
municipalities (and provinces) on 20 October 2009 called
'Goed op weg met breedband' (Well Under Way With
Broadband). These instructions state, amongst other things, that in
view of the important role that the municipalities can play in the
deployment, this Section 5.14 Tw has to be amended. That the
involvement of municipalities in the deployment may be an important
incentive for banks and other money lenders - who have adopted a
reticent attitude due to the economic crisis - to participate, was
also important. The amendment is included in the proposed Crisis
and Recovery Act that has the objective of diminishing the economic
crisis by making an accelerated execution of some large projects
possible. If the Act is actually amended, municipalities are
allowed to participate financially in the realization of super-fast
broadband networks. The current guarantees of the Tw will be
substantially maintained, which means that the persons involved in
the decision-making process may not also be involved in the
execution, and that companies in which a municipality has a
financial interest may not be advantaged. A new development is that
on the basis of the bill municipalities are obliged to further the
open and non-discriminatory access to a network in which they have
an interest or control. The Lower House of Parliament agreed to the
- slightly modified - bill on 18 November 2009 and the proposal was
sent to the Upper House of Parliament. The bill is intended to
enter into force on 1 January 2010.
The European rules on state aid of course continue to apply, but
these rules need not stand in the way of cooperation. For instance,
in 2007 the European Commission ruled that the investments of the
municipality of Amsterdam in a glass fiber project were allowed
because these investments took place on market-compliant
conditions.
Besides the bill, the explanatory notes thereto and the
above-discussed draft instructions there are also two draft policy
memoranda called 'Aan de slag met breedband in de
praktijk' (Get Going with Broadband in Practice), part 1:
'Practice Examples' and part 2: 'European
Frameworks' that are important. In these two documents the
possibilities for participation are further elaborated. In the
document 'Community Guidelines for the application of State
aid rules in relation to rapid deployment of broadband
networks' dated 30 September 2009 the Commission provides
an insight into its policy regarding state aid for broadband
projects.
Closing Remarks
In short, municipalities can play a role in the deployment of
next generation broadband in various ways. They can:
- bring together local or regional parties, combine the
demand for broadband services and stimulate the offerings of
innovative services;
- actively direct work in the subsoil (during excavation
work) in order to reduce nuisance for members of the public and
costs for businesses;
- participate financially in the construction of networks,
but only if no commercial initiative at all gets off the
ground, and after testing against the European rules for state
aid and with due observance of the European and national
procurement rules;
- participate in a market-compliant manner in broadband
initiatives after the intended amendment of Section 5.14 of the
Tw has entered into effect.
In addition to the actual increase of possibilities for
municipalities and clarity obtained on the bounds of participation,
the signal function of the abovementioned developments is also
important. After all, it is made clear to municipalities that the
Dutch central government want to stimulate municipalities to
participate in the deployment. The existing guarantees in the Tw
and in European legislation must prevent a distortion of
competition as a result of the participation of municipalities.