Saturday, November 2, 2024

The EU Gigabit Infrastructure Act (“GIA”)

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It promises a lot but received mixed views: the GIA[1] will be fully applicable from 12 November 2025 and only time will tell if it can deliver in creating a regulatory environment for faster, cheaper, and simpler rollout of Gigabit networks, addressing hurdles like expensive and complex procedures for network deployment. This paper provides a summary of the main takeaways.

At a glance

The GIA introduces several measures aimed at streamlining the deployment of high-speed fibre-optic internet and 5G (so-called very high-capacity networks or “VHCNs”[2]) by 2030:

  • Shared use of infrastructure – Encouraging the shared use of ducts and poles for deploying VHCNs to optimise resources and reduce costs.
  • Co-deployment and Coordination of Civil Works – enabling VHCNs operators to collaborate with public works projects to install fibre-optic cables simultaneously, reducing disruptions and expediting broadband expansion.
  • Streamlining Administrative Procedures: Simplifying administrative procedures related to network rollout throughout the EU to reduce bureaucratic hurdles and improve efficiency.
  • Equipping Buildings with High-speed Ready Infrastructure: Encouraging the provision of buildings with high-speed ready infrastructure and ensuring access to it to facilitate broadband deployment and adoption.

As Margrethe Vestager, Executive Vice-President for a Europe Fit for the Digital Age, put it: “Cutting red tape and providing fast and reliable connectivity is fundamental for our digital transition. And essential to both us as citizens and businesses too”.

Background

VHCNs underpin almost all sectors of a modern and innovative economy. The rapid evolution of technologies, the exponential growth in broadband traffic and the increasing demand for advanced very high-capacity connectivity have further accelerated during the COVID-19 pandemic. As a result, the targets laid down in the Digital Agenda for Europe have mostly been met, but they have also become obsolete. The share of households having access to 30 Mbps internet speeds has increased from 58.1% in 2013 to 90% in 2022. Availability of only 30 Mbps is no longer future-proof and is not aligned with the new objectives set out in the European Electronics Communications Code (EECC) for ensuring connectivity and widespread availability of VHCNs. Therefore, the EU legislature adopted updated targets for 2030 that better correspond to the expected connectivity needs of the future where all European households and businesses should be covered by a Gigabit network, with all populated areas covered by next-generation wireless high-speed networks with performance at least equivalent to that of 5G.

To achieve those targets, the roll-out of VHCNs across the EU requires substantial investment, through a mix of private and public[3] funds, a significant proportion of which is the cost of civil engineering works. Sharing physical infrastructure would limit the need for costly civil engineering works and make advanced broadband roll-out more effective. However, the fragmented implementation of the current Broadband Cost Reduction Directive (BCRD)[4] has led to different results across the EU. To further harmonise the rights to roll-out VHCNs across the EU, [5] the GIA has been adopted to replace the BCRD, through a regulation that is directly applicable in all Member States.

What is new?

The GIA includes various measures that build on the BCRD while also addressing its shortcomings.

The GIA provides additional guidance on “fair and reasonable” pricing principles for granting network access. Pricing must reflect market conditions, and while it should allow a fair return on investment, excessive pricing should be avoided, having regard to the applicable EU competition law principles.

Shared use of existing infrastructure is promoted by expanding the scope of the definition of “physical infrastructure”. The BCRD only covered access to utility network infrastructure such as ducts and cables. In comparison, the GIA now includes accessing any physical infrastructure capable of hosting fibre, antennas, and network equipment, including telephone poles or traffic lights.

Permit procedures are further expedited to speed up the granting of permits and rights of way. While the final approved version of the GIA does not go as far as introducing a tacit approval principle, the GIA does include a conciliation mechanism between public sector bodies and VHCN operators. EU Member States are required to introduce dispute settlement bodies. The BCRD had only introduced the requirement of a single information point responsible for all necessary permits, but failed to include specific recourse if an authority did not meet the deadline for approving or rejecting a permit application.

New buildings and those undergoing major renovation must be equipped with fibre infrastructure. A new voluntary “fibre-ready” label is also being introduced. In addition, the installation up to the fibre termination point and the development of individual residential units will be regulated.

Finally, the GIA emphasises environmental considerations and requires impact-reduction through the use of efficient technologies, civil works coordination and reuse of infrastructure.

Reconciling the GIA and the EECC

The EECC already includes measures addressing the roll-out of VHCN and streamlining permit granting procedures. These overlaps could lead to inconsistencies in obligations placed on VHCN operators and land owners.

However, Article 1(2) of the GIA clarifies that the EECC takes precedence in case of conflict between the two sets of rules and Recital 21 further clarifies that the provisions of the EECC granting access to specific infrastructure should prevail over the GIA, except if access under the EECC is insufficient. Additionally, Article 7(11) of the GIA complements the EECC by applying the expedited permit granting procedure, e.g. approval within 4 months, to the provisions of the EECC.

Too little, too late?

The GIA received mixed views. The main industry associations (including ETNO and GSMA) released a joint statement that the act is “a measure that penalises telecoms operators, without producing any real benefit in terms of administrative simplification.”

Their disappointment probably stems from the fact that, during the legislative process, the GIA terms have been diluted – example, with various exemptions, voluntary elements and interim steps introduced – to get it passed into law before the new European Commission is elected. Moreover, the intra-EU call price caps that should have expired on 14 May will now stay in place until 30 June 2032, thus reducing the scope for margins for intra-EU calls.

The GIA will apply from 12 November 2025. This doesn’t give much time for it to help the EU to hit its ambitious 2030 targets regarding the penetration of fast network coverage. The EU reckons will cost €200 billion collectively for operators to hit those targets.[6] Therefore, without additional measures to incentivize VHCN roll-out, the simplification of the process for operators in obtaining permission to build infrastructure on landlords’ property – whether public or private – is unlikely to be sufficient.

By comparison, a similar attempt by the British government to smooth the way for operators building out infrastructure in the UK achieved little – the updated Electronic Communications Code (“Code”) was intended to make gaining permissions easier and make the rental fees that land and property owners could charge operators reasonable. However, the landowners didn’t always agree with what the operators thought was reasonable, and the UK lands tribunals have been busy adjudicating cases regarding the contested application of the Code rights by VHCN operators. For example, in a recent case On Tower UK Limited v British Telecommunications plc, a tribunal had to deal with the circumstances under which a building can be designed for housing VHCN apparatus.

The UK example illustrates how, despite the GIA, the process for VHCN operators in obtaining permission to build infrastructure on landlords’ property is likely to continue to be contentious.

Gigabit Recommendation

In parallel to the GIA, the European Commission adopted the Gigabit Recommendation in February 2024. The recommendation builds on the regulation providing guidelines to National Regulation Authorities (NRAs) on how to design access remedy obligations for operators with significant market power, promoting competition. Specifically, it offers guidance on situations where access to civil-engineering infrastructure is necessary to address competition issues. Additionally, it outlines requirements for NRAs to oversee a smooth transition from copper to fiber. The Gigabit Recommendation replaces the 2010 Next Generation Access Recommendation and the 2013 Non-discrimination and Costing Methodology Recommendation.[7] 

The author would like to thank Lea Voss and Antonio Bañón for their comments on earlier drafts of this article.


[1] Regulation (EU) 2024/1309 of the European Parliament and of the Council on measures to reduce the cost of deploying gigabit electronic communications networks, amending Regulation (EU) 2015/2120 and repealing Directive 2014/61/EU, available at: https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32024R1309.

[2] VCHNs are defined in Article 2, point (2) of the EU Electronic Communications Code Directive (EU) 2018/1972 (“EECC”). For a commentary of the EECC, see https://www.squirepattonboggs.com/en/insights/publications/2021/03/the-eu-electronic-communications-code-handbook.

[3] Press release IP/22/7595: “State aid: Commission adopts revised State aid rules for broadband networks”. See also https://www.squirepattonboggs.com/en/news/2020/09/squire-patton-boggs-co-authors-report-on-the-role-of-state-aid-for-the-rapid-deployment-of-broadband-networks-in-the-eu.

[4] Directive 2014/61/EU of the European Parliament and of the Council of 15 May 2014 on measures to reduce the cost of deploying high-speed electronic communications networks.

[5] Report on the implementation of the Broadband Cost Reduction Directive, COM(2018) 492, European Commission, 27 June 2018

[6] White Paper – How to master Europe’s digital infrastructure needs?, available at: https://digital-strategy.ec.europa.eu/en/library/white-paper-how-master-europes-digital-infrastructure-needs. For a commentary, see https://www.squirepattonboggs.com/-/media/files/insights/publications/2024/03/the-european-commission-publishes-a-new-master-plan-for-europes-digital-infrastructure/europe_digital_infrastructure.pdf?rev=4be756514d1b4d1a930a9a86ea0bbc52.

[7] Press Release “Commission welcomes new measures to boost the rollout of gigabit networks”, available at https://ec.europa.eu/commission/presscorner/detail/en/ip_24_669.

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