EUROPEAN COMMISSION

Brussels, 23.2.2023

SWD(2023) 46 final

COMMISSION STAFF WORKING DOCUMENT

IMPACT ASSESSMENT REPORT

Accompanying the document

Proposal for a Regulation

of the European Parliament and of the Council on measures to reduce the cost of deploying gigabit electronic communications networks and repealing Directive 2014/61/EU (Gigabit Infrastructure Act)

{COM(2023) 94 final} - {SEC(2023) 96 final} - {SWD(2023) 47 final}

Table of Contents

1.Introduction: Political and legal context

1.1.Political context

1.2.Legal context

2.Problem definition

2.1.What are the problems?

2.2.What are the problem drivers?

2.3.Who is impacted and how?

2.4.How likely is the problem to persist?

3.Why should the EU act?

3.1.Legal basis

3.2.Subsidiarity: Necessity of EU action

3.3.Subsidiarity: Added value of EU action

4.Objectives: What is to be achieved?

4.1.General objective

4.2.Specific objectives

5.What are the available policy options?

5.1.What is the baseline from which options are assessed?

5.2.Description of the policy options

5.3.Options discarded at an early stage

6.What are the impacts of the policy options?

6.1.Economic impact

6.2.Societal impact

6.3.Environmental impact

6.4.Conclusions

7.How do the options compare?

7.1.Comparison based on economic, societal and environmental impact

7.2.Comparison of policy options per criteria

8.Preferred option

8.1.Outcome of comparison of policy options

8.2.REFIT (simplification and improved efficiency)

8.3.Application of the ‘one in, one out’ approach

9.How will actual impacts be monitored and evaluated?

Annex 1: Procedural information

1.Lead DG, Decide Planning/CWP references

2.Organisation and timing

3.Consultation of the RSB

4.Evidence, sources and quality

Annex 2: Stakeholder consultation (Synopsis report)

1.Introduction

2.General remarks

3.Evaluation of the overall functioning of the Broadband Cost Reduction Directive

4.Subject matter and scope

5.Access and availability of physical infrastructure and of in-building physical infrastructure

6.Coordination of civil works

7.Transparency measures

8.Permit granting procedures

9.Environmental impact of electronic communications networks

10.Governance and enforcement: Competent bodies and other horizontal provisions (penalties, dispute resolution)

11.Legal instrument

Annex 3: Who is affected and how?

1.Practical implications of the initiative

1.1.Costs to stakeholders

1.2.Benefits

2.Summary of costs and benefits

3.Implications for ECN operators

3.1.Obligations impacting ECN operators

3.2.Costs

3.3.Benefits

4.Implications for other network operators

4.1.Obligations impacting other network operators

4.2.Costs on other network operators

4.3.Benefits to other network operators

5.Implications for construction companies

5.1.Obligations impacting construction companies

5.2.Costs on construction companies

5.3.Benefits to construction companies

6.Implications for owners of private non-network facilities

6.1.Applicable obligations

6.2.Costs for owners of private non-network facilities

6.3.Benefits for owners of private non-network facilities

7.Implications for national, regional or local public authorities

7.1.Obligations impacting national, regional or local public authorities

7.2.Costs on national, regional or local public authorities

7.3.Benefits on national, regional or local public authorities

8.Implications for national administrations, Dispute Settlement Bodies and SIP management authorities

8.1.Obligations impacting national administrations, DSBs and SIP management authorities

8.2.Costs for national administrations, Dispute Settlement Bodies and SIP management authorities

8.3.Benefits for national administrations, Dispute Settlement Bodies and SIP management authorities

9.Implications for customers

9.1.Obligations impacting consumers

9.2.Costs for consumers

9.3.Benefits for consumers

10.Implications for SMEs

10.1.Obligations impacting SMEs

10.2.Costs for SMEs

10.3.Benefits for SMEs

11.Relevant sustainable development goals

Annex 4: Detailed description of the four policy options

Annex 5: Analytical methods

Annex 6: Environmental impact (details)

Annex 7: Potential key performance indicators (KPIs) for the monitoring system

Annex 8: Evaluation report SWD

List of figures:

Figure 1: Interactions between legal instruments    

Figure 2: Problem Tree    

Figure 3: Intervention logic    

Figure 4: Set-up costs by stakeholder type    

Figure 5: Fixed broadband network emissions 2020-2030    

Figure 6: Fixed broadband deployment emissions 2023-2030    

Figure 7: Mobile / wireless broadband network emissions 2023 - 2030    

                    List of tables:

Table 1: Time required to deploy a site    

Table 2: Permit exemptions foreseen by Member States    

Table 3: Policy options in a nutshell    

Table 4: Estimates of the increases of the different options on infrastructure sharing, co-deployment, and the timeframes for deployment (step 1)    

Table 5: Outcomes of the model (step 2)    

Table 6: Incremental impact options on GDP up to 2030 (billion EUR) from 5G and fixed VHCN    

Table 7: Emissions from operation of fixed broadband networks 2023-2030    

Table 8: Emissions from deployment of fixed broadband networks 2020-2030    

Table 9: Emissions from deployment of fixed broadband networks 2020-2030 with proportion of deployment technique as Status Quo    

Table 10: Emissions from operation of mobile broadband networks 2023-2030    

Table 11: Summary of macro-economic, societal and environmental impact    

Table 12: Comparison of policy options – overview    

Table 13: Potential cost savings associated with the preferred option    

Table 14: Problems to goals of the revised instrument    

Table 15: Main benefits to stakeholders to 2030    

Table 16: Overview of Benefits (total for all provisions) – Preferred option    

Table 17: Overview of costs- Preferred option    

Table 18: Assumed effects of regulatory options in detail    

Table 19: Regional Clusters    

Table 20: FTTH only    

Table 21: FTTH up to 90% coverage and then FWA    

Table 22: Emissions from deployment of fixed broadband    

Table 23: Potential indicators    

Glossary

1.Introduction: Political and legal context

The present Impact Assessment accompanies the legislative proposal for a revised legal instrument following the review of the Broadband Cost Reduction Directive (‘BCRD’ or ‘the Directive’) 1 adopted on 15 May 2014. The revision was announced in the 2020 Communication on ‘Shaping Europe’s Digital Future’ 2 , which mentions that for digital infrastructure and networks alone, the EU has an investment gap of EUR 65 billion per year 3 .

This is a REFIT 4 initiative. The current Directive does not include a review clause, but a review at this time is justified by the partial effectiveness and efficiency of the current Directive to achieve its original objectives, the market and technological changes occurred since 2014 and the increased need for very high capacity fixed and mobile connectivity from businesses and citizens and the need to ensure that by 2030 the Union achieves Gigabit coverage to all EU households and 5G in all populated areas on time and with the minimum possible cost for private and public actors. Given the necessary procedures of adoption and transposition as well as transition measures, and the time required to plan and execute investments, a review at a later stage would not be able to contribute to the 2030 connectivity targets.

The roll-out of high-speed fixed and mobile electronic communications networks across the Union requires substantial investments. The BCRD aimed to facilitate and incentivise the rollout of these networks by lowering the costs of deployment with a set of minimum harmonised requirements relating to civil works coordination and access to physical infrastructure, in order to exploit synergies across sectors and re-use existing physical infrastructure. Ceteris paribus this should make broadband roll-out more effective and reduce the social and environmental costs linked to them, such as pollution and nuisances.

Indeed, a major part of those costs can be attributed to inefficiencies in the roll-out process related to the use of existing passive infrastructure (such as ducts, conduits, manholes, cabinets, poles, masts, antenna installations, towers and other supporting constructions), bottlenecks related to coordination of civil works, burdensome administrative permit granting procedures, and bottlenecks concerning in-building deployment of physical infrastructure. These inefficiencies lead to higher costs for deployments, in particular in rural areas, but not only.

The BCRD builds on measures already deployed by (only) some Member States across the Union to contribute to the establishment of a digital single market. To do so, it provides for rights and obligations on network operators (meaning providers of public electronic communications networks (‘electronic communications operators’ or ‘ECN operators’) and undertakings providing a physical infrastructure for gas, electricity, heating and water (except for drinking water) production, transport or distribution services or for transport services). It lays down rights for ECN operators to access existing physical infrastructure irrespective of its location under fair and reasonable terms, without prejudice to the rights of the owner of the land or of the building in which the infrastructure is located.

The BCRD should have been implemented by January 2016. The 2018 Commission’s report on the implementation of the BCRD revealed a late and inconsistent implementation across the EU and persisting inefficiencies, hindering the potential impact of cost reduction measures to foster a more efficient and faster deployment of electronic communications networks across the EU. As shown in the evaluation report (Annex 7), at present the Directive’s objectives have only partially been achieved.

The review aims to address persistent obstacles to the deployment of fixed and mobile electronic communications networks, notably VHC networks, in particular by reducing deployment costs and time. Stakeholders, Member States, and experts consistently acknowledge that these problems persist despite the implementation of the BCRD and the other instruments within the electronic communications framework that contribute to facilitate network deployments as well as the more recent Connectivity Toolbox consisting of Member States best practices in the area of cost reduction (see section 1.2). The cost of civil works to deploy the physical infrastructure to host electronic communications networks constitutes a significant portion (which could be up to 80% 5 ) of the overall cost of deploying high-speed broadband infrastructure.

While within the same scope overall, the review will ensure the alignment with new EU connectivity ambitions, focusing on incentivising gigabit speeds, and facilitating timely and less costly very high capacity networks (‘VHCN’) deployment, including fibre and 5G, with significant attention to EU environmental targets.

1.1.Political context

As the BCRD, the proposed review only addresses one – albeit extremely important – factor in VHCN roll-out, i.e. the cost of building networks. Hence, it can contribute to accelerating the deployment, but not in itself guarantee the achievement of the 2030 Gigabit connectivity targets, even in the best of cases.

On an aggregate level VHCN deployment depends first of all on a number of exogenous factors, such as the pre-existing legacy infrastructures which can partially substitute VHC networks. For example, in some Member States existing cable networks were upgraded with DOCSIS 3.0 and 3.1 to reach NGA bandwidths; in other Member States there were no such cable networks in place. Equally, there are considerable differences in costs for rolling out networks depending on the geographic characteristics of the areas (mountains, islands, remote areas) and the different population density levels that lead to different cost and levels of profitability, the competitive market situation, the demand by consumers and business (influenced by e.g. digital skills levels of the population) and the take-up of services (which for example is much higher in northern Member States) or, finally, housing settlement patterns (single-family housing vs. apartment blocks). Moreover, heritage preservation legislation in historic cities or other restrictive local urbanistic rules can make deployment very onerous even in areas which in theory are well-suited for very profitable roll-out, such as urban areas 6 . As a result, network roll-out should not be expected to be identical across Member States, even if all Member States pursued identical policies.

In addition, VHCN deployment is affected by national policies that follow the EU pro-competitive regulatory framework for electronic communications but are shaped to local, regional and national future connectivity needs. Subsidies through Member States’ national broadband plans (‘NBPs’) aim to make broadband coverage available across a country/region by focusing on areas where VHCN deployments are otherwise deemed not to be economically viable; solutions proposed for NBP projects have predominantly focused on fibre solutions. In the future, Member States will also pursue policies in the framework of the proposal for a Digital Decade policy programme 7 once it enters into force that will stimulate demand, for example by improving citizens’ digital skills and offering eGovernment solutions.

Against this background of different starting situations and similar but not identical policies, the key factors for electronic communications networks operators are the expected return on investment of VHCN, which is basically the difference between expected revenues and deployment cost, and the possibility to raise the necessary financing, which depends inter alia on the type and size of the project. Thus, a reduction in deployment costs will inevitably make investments more likely to be profitable and hence, in a competitive environment, increase VHCN deployment prospects. This effect holds independently of all the other factors mentioned above. One should also note that for both profitability and the raising of finance, long-term regulatory certainty is of paramount importance, as changes in the legal rules can have an immediate effect of costs, revenues and cash flow.

However, the Evaluation report (see Annex 8) has shown that the BCRD has not been fully effective in reducing costs of broadband networks deployments and thereby contributing to full network coverage in all Member States. It is true that all measures currently included in the BCRD have proven important and relevant to reduce the cost of deployment of electronic communications networks, including regarding access and coordination with other utilities and transport networks.

Nevertheless, the minimum harmonisation nature of the Directive, with many voluntary provisions as well as considerable scope for exclusions or exemptions, has led to its non-homogeneous implementation. On the one hand, some Member States implemented the Directive in a minimum fashion 8 . On the other hand, some Member States went beyond the provisions of the Directive 9 .

Some provisions have been more intensively applied than others (e.g. provisions on transparency of existing infrastructure and access to it are more used than provisions on coordination of civil works) and outcomes are variable. One of the lessons learnt from the evaluation of the implementation of the current Directive is that more clarity or guidance on some provisions of the Directive as well as enhanced, fully digitized information platforms/SIPs, including for permit granting, could significantly reduce the administrative burden associated with network rollout. This shows considerable scope to refocus and improve the Directive. Similarly, the Fit for Future Platform notes that there is still room for improvement in some Member States 10 .

At the same time, demand for bandwidth from households and businesses is increasing rapidly across the EU 11 . Modelling of expected bandwidth requirements in the near future (i.e. to 2025) by the Commission’s external consultants, ICF, WIK & EcoAct study (the ‘ICF, WIK & EcoAct study’ or the ‘support study’) , suggests that a significant proportion of end-users will require downstream bandwidths of at least 1Gbit/s and upstream bandwidths of 600Mbit/s or more in the home 12 . In practice, supporting bandwidths of this level upgradable for future needs is likely to require the widespread deployment of Fibre to the Home (FTTH) technology 13 , or 5G Fixed Wireless Access (FWA) in areas where FTTH is not economically viable.

In addition, demand by consumers and business for fast and ubiquitous connectivity has unexpectedly but considerably increased by the drastic confinement measures taken during the acute phase of the COVID pandemic. They forced an unprecedented number of people to resort to their home internet access for work, education and leisure. Digital technologies and robust infrastructure are now imperative for accessing everything from health services to culture, in big cities as well as in rural areas. This resulted in a sharp increase of network traffic, driven primarily by video-related services. According to ETNO, up to 50% increase in voice traffic, up to 40% increase in mobile data traffic, and up to 70% in fixed data traffic were observed. According to OECD 14 , in the wake of the COVID-19 pandemic bandwidth consumption increased by up to 60%, as a result of practices such as home working.

In response to these developments, the ‘Communication on a 2030 Digital Compass: the European way for the Digital Decade’ 15 and the Decision on the 2030 Policy Programme ‘Path to the Digital Decade’ 16 established new EU connectivity goals: by 2030 all European households should be covered by a Gigabit network, with all populated areas covered by 5G. The ambition is that “nobody should be left behind”, and the population living and the businesses operating in rural should have the same opportunities as their counterparts in urban areas. It also reflects the above-mentioned new needs resulting from the COVID pandemic and the increased reliance of society and businesses on advanced digital secured connectivity.

The Council Conclusions on Shaping Europe's Digital Future of 9 June 2020 stress that the COVID pandemic has demonstrated the need for fast and ubiquitous connectivity. This situation calls on Member States, in close cooperation with the Commission, to develop a set of best practices to reduce the costs of network deployment and facilitate the roll-out of very high capacity infrastructures, including fibre and 5G 17 . Last but not least, the climate targets of the European Green Deal, enshrined into Europe’s first Climate Law by the Council and Parliament in June 2021 18 , require the highest possible resource efficiency.

1.2.Legal context

The Broadband Cost Reduction Directive is part of the regulatory framework for electronic communications. It lays down some minimum rights and obligations applicable to the use of existing infrastructure (and related provision of relevant information), the speeding up of permit granting procedures, and pre-equipment and access to in-building physical infrastructure for new and majorly renovated buildings.

Contrary to other instruments supporting the achievement of EU fixed and mobile broadband targets (i.e. the European Electronic Communications Code – EECC or the Code 19 ) which mainly, save in specific cases 20 , provide for the possibility to impose obligations on electronic communications operators with a dominant position - significant market power (SMP 21 ) - in a given electronic communication market, the BCRD imposes obligations of access, transparency and civil works coordination on any undertaking operating an electronic communications network or providing physical infrastructure in the provision, distribution or transport of gas, water and sewerage and transport, irrespectively of whether they hold SMP. Moreover, whereas other instruments provide for the possibility to impose obligations for any element of an electronic communications networks, including passive elements (e.g. ducts, masts, poles, antennas, cables) and active elements (e.g. base stations, routers, switches), the BCRD only covers passive physical infrastructure (ducts, masts and poles but not antennas or cables). Moreover, whilst Article 57 of the EECC aims to ease conditions for the deployment of ‘Small Area Wireless Access Points’ (SAWAPs or small cells) 22 that are active elements of a wireless / mobile network, it does not cover the deployment of other types of cells that can be crucial to the deployment of 5G networks.

Provisions relating to the assignment of spectrum for 5G 23 and the new digital decade 5G targets require from Member States the timely availability of specific harmonized 5G pioneer bands, namely the 700 MHz, the 3.6 GHz and the 26 GHz bands, for the development of 5G networks. This entails the rollout of the necessary wireless / mobile infrastructure, in particular the deployment of Small-area wireless access points (SAWAPs or small cells), and therefore requires the facilitation of their installations. The BCRD is complementary to these provisions in the sense that it concerns the physical infrastructure needed, inter alia, for the backhaul connection of the base stations (including small cells) to the core network via fibre, which will ensure the necessary high capacity for the provision of 5G services and will contribute significantly, by reducing their wireless connections to the core network, to the reduction of exposure of the general public to electromagnetic fields (EMF) 24 .

In September 2020, the framework was complemented by a Recommendation on a Connectivity Toolbox 25 aimed at reducing the cost of deployment of Very High Capacity Networks (VHCN) 26 and ensuring timely access to 5G radio spectrum. The subsequent ‘Connectivity Toolbox’ 27 agreed by Member States in March 2021 includes 22 best practices related to network cost reduction 28 . The best practices cover some of the areas currently included in the BCRD, notably those regarding permits, access to physical infrastructure and transparency related measures and dispute resolution, which were considered the most critical in the short term. However, there are other areas, such as coordination of civil works (except for transparency aspects) and in-building physical infrastructure, which are not covered by the Connectivity Toolbox, thereby leading to limitations in terms of its overall potential. Moreover, the ‘Connectivity Toolbox’ is not a binding legal instrument, and its implementation is left to Member States’ initiative.

Between April and November 2021, Member States submitted their roadmaps providing plans to implement the Connectivity Toolbox. Overall, there was wide variety of roadmaps both in terms of content and format and some were lacking sufficient details, which have made it difficult to grasp the reality of such plans. Despite some good examples, in most cases the roadmaps only proposed to implement a limited number of best practices 29 . By June 2022, the Commission has received 22 reports (from 21 Member States and Norway) on the implementation of the Connectivity Toolbox. The Connectivity Toolbox has triggered non-homogeneous action in some Member States and as regards specific areas (e.g. guidelines on dispute settlement mechanisms or legal requirements for appropriate permit fees), while a relatively high number of measures are still ongoing (e.g. introducing permit exemptions and fast track permit granting procedures, or ensuring the availability of information in SIP) and certain best practices have rarely been implemented (e.g. tacit approval or fast track procedures for rights of way, ensuring access to publicly controlled physical infrastructure or establishing a coordinator/promoter body in relation to the latter access requests).

While in general, the Connectivity Toolbox has collected a good set of best practices which could possibly improve to some extent the effectiveness of some provisions of the current Directive, the final overall impact would depends on the willingness of Member States to keep focus on finalising implementation of the numerous on-going practices, given that this is in essence a voluntary exercise.

Moreover, the recent Commission proposal for a Union Secure Connectivity Programme 30  aims to facilitate broadband access by satellite to areas that lie beyond the reach of other fixed and mobile electronic communications network infrastructure. That’s possible because satellite communications provide limited capacity but ubiquitous coverage, which is complementary to terrestrial networks (ground-based in a form of cable links such as fibre broadband or wireless). The system will also provide connectivity over geographical areas of strategic interest, for instance Africa and the Arctic, as part of the EU Global Gateway strategy. It can also ensure minimum connectivity in emergency situations such as in Ukraine during the war. Nevertheless, satellite is not considered to be a substitute for fixed broadband technologies from a performance perspective 31 , and its main purpose is to ensure resilience and provide ubiquitous high-speed broadband capacity for governmental users including in otherwise ‘dead zones’ rather than the Gigabit speeds required in the post-COVID digital era.

Finally, it should be noted that there are funding initiatives to support high speed (and Gigabit-capable) broadband in rural and other less well served areas, including the digital part of the Connected Europe Facility (CEF and CEF Digital) 32 , post-COVID recovery funds 33 , and national State Aid initiatives 34 . The recently revised Guidelines on State aid for broadband networks 35 , also contribute to accelerate and extend broadband deployment by clarifying when public support is in line with competition rules.

Figure 1: Interactions between legal instruments

2.Problem definition

2.1.What are the problems?

The Evaluation Report shows that the current Directive has only been partially effective in achieving its objective and that a number of improvements would be required to make it suitable to support EU’s new connectivity needs and ambitions. That’s because the flexibility allowed to the Member States not to implement certain measures or to apply exemptions resulted in an inconsistent implementation across the EU. Additional reasons why the Directive was not fully effective in tackling the problems mentioned are imputable to a lack of clarity of certain formulations in the Directive (i.e. ‘fair and reasonable’ conditions of access or ‘alternative means’) which led to complex, costly and inconsistent implementation. Also, significant problems remain in particular with regard to permit granting, which is critical for timely VHCN deployment. Finally, some network or non-network physical infrastructure that would have facilitated deployments were not included in the scope of the Directive.

In addition, new problems stemming from the evolving market, technologies and stakeholders needs have emerged. First, the ambition in terms of network performance has increased from 30Mbps to at least 100 Mbps and even further to 1 Gigabit by 2030. Therefore, significant gaps remain between the EU’s connectivity goals of complete VHCN coverage by 2030 and the actual network coverage. Total VHCN coverage in the EU increased between 2013 and 2020 from 16% to 59% of households, but less than half of households (42%) 36 benefit from a futureproof 37 FTTH connection. While good progress has been made in Member States such as Latvia, Spain, Portugal and Sweden, coverage of FTTH remains below 15% in certain Member States such as Germany, Greece and Belgium 38 . The problem is even more evident in rural areas, for which FTTH coverage on average across the EU is only 28%, with some Member States (notably Bulgaria, Belgium and Greece) having rural FTTH coverage close to zero 39 .

Second, the latest generation of wireless (including mobile technology), 5G, has matured and is now set to take on a large role in economic life. Yet, despite the emergence of providers of wireless physical infrastructure such as « tower companies » that account for over 35% of the wireless physical infrastructure in Europe 40 , 5G coverage is still limited in most cases (5G coverage in Europe by mid-2020 amounted to only 14% of populated areas in 14 Member States 41 ), and operators’ focus has thus far been on providing 5G for enhanced mobile broadband (eMBB) in lower frequency bands including the newly auctioned 700MHz band, which mainly involves the upgrade of existing sites and associated backhaul (e.g. to dark fibre – potentially in conjunction with FTTH deployment), typically by upgrading existing sites 42 .

Therefore, in the context of new EU connectivity targets and objectives and the regulatory, market and technological developments as well as the findings of the evaluation, the main problems tackled by this initiative are (i) the high deployment costs for VHCN (in practice, mostly FTTH and mid-band 5G), and (ii) persisting slow deployment of electronic communications networks.

Figure 2: Problem Tree

Source: European Commission

High deployment costs

High deployment costs for VHCN, including FTTH and mid-band 5G, undermine deployment incentives and viability of new deployments. A key factor in the deployment of physical infrastructure suitable to host broadband, and more specifically VHCN networks is represented by the high costs required to plan, design and rollout a network, including the costs to build civil engineering infrastructure, e.g. ducts, masts etc., and in particular the costs to excavate the ground to build ducts suitable to host an electronic communication network. That applies to ECN networks in general, but the problem is more acute for fibre (last mile) and 5G (densification) which are the technologies expected to help meeting the connectivity targets at this stage of technological development.

Total costs are estimated at EUR 145bln 43 to reach 90% households with FTTH from today’s level, which is the baseline scenario assumed by the support study (see section 5.1). This amount includes EUR 3.8bln of public subsidies 44 . Based on current figures regarding costs of labour, equipment and materials, civil works represent around 70% of the total capital expenditure (capex) required in deploying FTTH in a greenfield scenario 45 .

Experience from the BCRD evaluation shows that measures that facilitating access to existing physical infrastructure and related information provisions (transparency) allow ECN operators to reduce by 10-30% the cost of deployment for fixed networks and by more than 30% the cost of deployment of wireless, including mobile, networks. Obligations to coordinate civil works which are publicly fully or partially financed, and related information measures (transparency) allow network operators to reduce up to 30% the costs of deployment and share risks when deploying networks including new physical infrastructure. This figure can go up to 50% savings in case of civil works coordination with other utilities.

In-building infrastructure also represents a substantial proportion of the costs of deploying FTTH, accounting for 10-15% of the cost per household. Assuming that 10% of buildings will have suitable in-building infrastructure for the deployment of FTTH, EUR 11.5bn can thus be estimated for new in-building infrastructure. To reach the remaining households, often in less densely populated areas, a further EUR 20bln (including EUR 7bln in subsidies) may also be needed 46 . Any reduction in the investments needed would enable network operators to use more financial resources to invest in additional VHCN coverage or performance enhancement.

The problem of high costs to deploy is particularly serious with respect to fixed networks in rural areas, because access lines are long and, as rural areas are less populated, fewer customers provide operators with less opportunity to recover their investment/deployment costs. Those areas are therefore less profitable. For example, the support study shows that while the cost of deploying FTTH to a household in a dense urban area is less than EUR 1,000 on average across the EU, the average cost increases to nearly EUR 2,000 when serving customers in rural areas. Costs of around EUR 200 per household can also be incurred to deploy in-building infrastructure to be able to connect end-users (e.g. to deploy ducts and fibre from the basement of the building to the apartment) 47 .

In the absence of significant subsidies 48 (or higher prices for rural customers), many rural areas would remain unserved with VHCN, and customers in those areas would be cut off from digital access to employment, healthcare and educational benefits that are available in other areas. There is already a gap between urban and rural areas: EU rural VHCN coverage went from 4% to 28% between 2013 and 2020, less than half total coverage (59%).

High costs are also a significant challenge hampering the deployment of the new 5G networks, which currently make extensive use of mid-band frequencies (below 6 GHz). Deploying mobile networks using these mid-band frequencies such as 3.6 GHz pioneer 5G band will require the deployment of hundreds of thousands of small cells, including SAWAPs but not only 49 , many of which will require fibre backhaul as well as potential costs relating to site leasing and permits 50 .

Persisting slow deployment of networks 

In order to start deploying a wireless/mobile network, network operators need to obtain permits and access to sites (rights of way). However, the procedures to obtain such permits and rights of way have been reported to be long and complex (e.g. the average duration was 12 months in Czech Republic and almost 8 months in Germany compared to the mandatory deadline of 4 months). Complex and lengthy procedures do not only increase costs for network operators, but also increase the risk of not timely reaching the digital targets on full Gigabit and 5G coverage due to slow deployment. Delays in obtaining permits and rights of way can add one to two years to the timing for the deployment of wireless VHCN in particular as well as (in some cases) costs associated with the process of obtaining permits and other permissions that can amount to 10-20% in the case of base stations.

In addition, the persistent diversity of rules pertaining to access terms and conditions, permit granting, level and availability of information required to request access or civil works coordination, within and across Member States is so great that it slows down the network rollout at European level as investment plans need to be adapted to local rules and works have to be subcontracted separately, in function of the solution chosen for each area. The fact that local presence needs to be ensured in every municipality throughout very long periods (starting before rollout plans are defined through to the completion of the projects) puts resource constraints on companies willing to roll out across regions and countries. The lack of transparency on permits rules and procedures, including those of rights of way, also prevents proper planning across borders (e.g. in cross-border cities/municipalities; borders areas in general). ECN operators estimate that the teams to handle permit applications for fixed and mobile infrastructure from multiple authorities cost EUR 75m annually across the EU 51 .

Additional delays in network deployments have also resulted from long and costly disputes among operators to obtain access to existing physical infrastructure. BCRD attempts to address this problem, but certain BCRD provisions (‘fair and reasonable’ terms and conditions) suffer from a lack of clarity. As a result, several Member States have clarified access terms and conditions through disputes or guidelines, which are however very different across Member States despite addressing the same problem.

2.2.What are the problem drivers?

Driver 1: Absent, incomplete or outdated information on the existing physical infrastructure.

The lack of transparency on suitable available infrastructure has a significant impact on the cost and time of deployment since it reduces the effectiveness of the actual access to physical infrastructure. While transparency on physical infrastructure has significantly improved since the application of the Directive, the extent to which such information is complete and up to date has been a significant challenge. Moreover, information about the exact location of physical infrastructure (geo-referencing) as well as about public non-network infrastructure or facilities is available via a Single Information Point (SIP) in only a limited number of Member States 52 (as this is not an obligation under the current BCRD), which would appears to be a significant shortcoming for future deployment of mobile networks in particular.

Many stakeholders 53 are concerned about the quality and completeness of information on existing physical infrastructure owned by network operators. The information available about the location of the physical infrastructure often is outdated and/or potentially inaccurate (or insufficiently specific), and incomplete, if not provided by all relevant parties (network operators and public authorities).

Driver 2: Persisting difficulties in accessing existing physical infrastructure (by reference to current definition in the Directive but also including non-network infrastructure owned or controlled by public bodies, such as public buildings or street furniture) to deploy new networks.

The Evaluation report shows that Member States have implemented the BCRD with varying speeds of implementation (most were late) and with a different degree of implementation. Where there is no ubiquitous SMP-based access due to the lack of ducting (e.g. Germany), where there exist a patchwork of different operators in different areas (e.g. Lithuania, Hungary, Slovakia and Poland) or where SMP obligations on the wholesale local access markets have been withdrawn (e.g. Romania, Bulgaria), the access to physical infrastructure under the Directive has been effective. On the other hand, in Member States where SMP-based access is effective (e.g. France and Portugal) or where there is widespread availability of dark fibre (e.g. Sweden), the access to physical infrastructure for the purposes of deploying high speed broadband under the Directive remains limited. As a result, the shared use of existing physical infrastructure between ECN operators varies between Member States, depending, among others, on the availability and quality of the existing physical infrastructure. The shared use of ducts pursuant to the BCRD covers from up to 1% of the total length of the reach of the incumbent network in Germany and Finland, 2.3% in Hungary, 4% in Estonia to up to 20% (Poland and Italy), while BCRD-based pole access is more used than BCRD-based access to ducts,

Nearly three quarters of disputes referred to Dispute Settlement Bodies (DSBs) under the BCRD concern access to existing physical infrastructure, with most concerning denial of access or terms and conditions for access 55 . The limited data available 56 on the take-up of BCRD-based physical infrastructure access seems to indicate that there are significant differences in the take-up of physical infrastructure access in different Member States, which may have been influenced inter alia 57 by differences in the conditions for physical infrastructure access 58 .

Based on estimates by the support study, costs involved in running Dispute Settlement Bodies are estimated at EUR 5m per annum for the EU 27. Costs to establish a SIP range from EUR 150,000 to EUR 2.5m (depending on scope / complexity) with an average of EUR 0.5m in annual maintenance costs per Member State. Costs for network operators (to negotiate access and provide information) are estimated at approximately EUR 68m per annum EU-wide (but some of these costs may have pre-dated the BCRD or may have arisen in its absence).

Access to physical infrastructure based on obligations imposed by national regulatory authorities (NRAs) on operators designated with SMP is not always a realistic alternative to BCRD-based access 59 . There are some Member States where SMP-based access to physical infrastructure is not available on a widespread basis. That may be because no ECN operator has been designated as having SMP in a relevant market linked to broadband deployment 60 , or because the SMP operator does not have full coverage or its network is partially deployed within ducts and partially directly buried in the ground 61 . In addition, there are circumstances where SMP-based access may not be available (due to lack of space) or where access to utility physical infrastructure may be more suitable or more cost effective.

Access to non-network physical infrastructure such as public buildings or street furniture is not covered by the BCRD, yet can be a significant cost factor. For example, for deploying the small cells required for the new 5G networks (including but not restricted to SAWAPs) costs are estimated around 40% higher than if non-network physical infrastructure were subject to equivalent obligations 62 .

Driver 3: Lack of suitable in-building infrastructure and fibre wiring and challenges in timely accessing it. The access to in-building infrastructure improved following the implementation of the Directive. In-building infrastructure represents a challenge for the timely deployment of VHCN for the majority of ECN operators. They report that in some Member States there is no adequate in-building infrastructure available to host new fibre networks, or where it has been installed, that there are many cases where the cabling does not meet their needs from a technological perspective (e.g. only coax, twisted copper pair), or does not reflect the required topology (Gigabit passive optical network (GPON) or point to multi-point v point to point (P2P) fibre). Lack of suitable physical infrastructure means that ECN operators incur significant costs in deploying new in-building infrastructure, sometimes including in-building ducts and cable trays. Moreover, terms and conditions, including unreasonable prices of access, the diverse ownership of in-building infrastructure and a lack of compliance by building owners with obligations to allow access to ECN operators for the purpose of installing in-building infrastructure remain key concerns for ECN operators. They estimate the cost of deploying new in-building infrastructure including dark fibre in buildings at between EUR 100 and EUR 450 per dwelling.

In situations where in-building infrastructure for the deployment of VHCN infrastructure exists, locating and negotiating access can take considerable time and require significant human resources for both ECN operators and for the owners of those infrastructures, notably in cases where there are multiple owners of that infrastructure (e.g. different local and regional authorities, regional utilities, or landlords). The challenge increases when building regulations and electronic communications legislation are handled at different levels of a Member State’s administration 63 . In some Member States, these problems resulted in a large number of disputes between ECN operators and building owners 64 . ECN operators note that the building and construction sector may not be fully aware of the rules stemming from the BCRD, while competent authorities may not be fully active in their enforcement.

Driver 4: Limited civil work coordination.

The lack of information about planned civil works is also challenging the efficient ECN rollout, as this limits the opportunities for timely and efficient coordination and might even trigger interruption of planning or works in cases where projects address the same areas simultaneously. Yet, as pointed out by the Fit for Future Platform, the co-use of existing infrastructure for broadband, water and gas could also limit the negative impact of deployment of broadband networks on the environment 65 .  Still, ECN operators report that delays associated with co-ordination and complex procedures are the most problematic aspects of civil works co-ordination 66 . They also observe that the procedures for civil works co-ordination are cumbersome or vary from one authority to the other, or that there are challenges in agreeing on cost sharing.

As regards the availability of information on planned civil works, low progress is reported following the Directive. ECN operators complain that they do not receive any notification of planned civil works, including for road works, sufficiently in advance to enable them to consider it in their forward planning. Most ECN operators report limited use of this possibility. Civil works co-ordination has only been extensively used in few Member States (such as Belgium, Slovenia, and to a more limited extent Sweden and Finland) that have defined procedures, provided guidelines on cost sharing and facilitated interaction between network operators 67 . Requirements for proactive notification of planned civil works to the SIP are in place only in a few cases, such as Belgium and Lithuania, and in many cases information about planned civil works is available only on request or with a delay. Delays associated with co-ordination are problematic 68 , since procedures for civil works co-ordination are cumbersome, vary from one authority to the other, or raise challenges in agreeing on cost sharing: disputes concerning coordination of civil works represent about 9% of all disputes between 2015 and 2020. Moreover, given the limited time offered to join planned civil works, the dispute resolution process may not be sufficiently agile to timely address such issues.

Driver 5: Unviable overbuild of ECN networks. In some cases, requiring ECN operators deploying very high capacity networks to provide access to their physical infrastructure to competitors or to coordinate civil works could undermine the business case for the roll-out. This is the case in particular in the rural and most remote areas where deployment of several infrastructures might not be financially viable. In practice, unviable overbuild concerns situations where a –usually non-incumbent or alternative- network operator plans to invest in rolling out a network in a rural area (low population/low revenue perspective/lower chances to recover the investment) and in the same area a – usually incumbent - operator requests coordination of civil works to upgrade its typically existing high-speed electronic communications network into very high capacity network. While this situation would generate more infrastructure-based competition (i.e. the same ducts would host parallel fibre networks) in less profitable areas, by generating an extra capacity which could result in the inability to recover the investment made, it also risks dis-incentivising the investment from the alternative operator in the first place. This issue is of high concern for some network operators in Germany 69 , and it is likely that the problem will increase and extend to other Member States as operators move more and more to deploy in rural areas.

These repercussions on the investment incentives of first movers in those areas can occur even if State Aid could be granted for the rollout and even if the wholesale network access prices or the cost apportioning of civil works are adjusted to take into account the impact on the business case, as provided in Article 3 and 5 of the BCRD. For example, operators could abstain from investing in new deployments fearing that their business case is undermined 70 . Thus, unviable overbuild can result in less rather than more deployment. It is therefore of outmost importance to strike the right balance between facilitating shared access to infrastructure and coordination of civil works via regulation and preserving operators’ incentives to invest in rolling out new networks.

Driver 6: Procedural complexity, timeframes and costs for permits and rights of way. Obtaining access, permits or rights of way may be problematic for deploying operators, due to the challenges below:

-the need to obtain several permits and rights of way, especially when they are delivered by different authorities (or the lack of a single point of entry) 71 , associated with the lack of coordination;

-the lengthy and diverse procedures, also due to the lack of electronic processes (manual systems and processes for permit granting are associated with longer processing times and potentially higher costs for the authorities concerned 72 );

-the non-respect of the deadlines to conclude the procedure; and

-the lack of explicit rules, including on compensation, if requirements for permit-granting procedures are not met, in particular deadlines and refusal conditions.

While the permit granting procedure has improved, very few public authorities provided information about the actual timeframes taken to process permit applications 73 , and data comes mostly from the operators interviewed 74 . Yet, according to the support study, the maximum and average time taken to receive a decision for a permit application for fixed deployments exceeded the 4-month limit currently imposed in the context of the BCRD in a number of cases, (the average time was 12 months in Czech Republic and almost 8 months in Germany; the maximum time reported was 8 months in Spain and 6 months in Portugal). 50% of mobile network operators have experienced timeframes more than a year for permit approval 75 . In the same line, the Evaluation report shows that timelines for permit applications have not been enforced in all Member States. At the same time, most Member States use some measures to facilitate the timely granting of permits, either through compensation for damages, permit exemptions or - in some Member States - through tacit approval if a decision has not been made within the deadline (although these are often specific to certain type of permits (e.g. fixed or wireless) only). Still, permit granting practices and fees still vary widely.

Table 1: Time required to deploy a site

Source: Mobile Network Deployment Policy and Implementation of the Broadband Cost Reduction Directive in Europe, GSMA Report, March 2021

Several ECN operator representatives responding to the support study survey or at the BCRD consultant workshop in June 2021 76 highlighted concerns over their ability to access public facilities in the context of deploying mobile infrastructure. High costs to obtain rights of way for mobile sites (of between EUR 12,000 and 23,000) have also been reported in some Member States 77 , and operators noted that there was a lack of national policies and/or mechanisms to provide for dispute resolution in many cases 78 . Furthermore, those already high costs risk further increasing due to potential speculative practices by land owners.

In many cases, procedures for the deployment of wireless infrastructure necessary for the new 5G networks became longer and more complex than those for fixed infrastructure. The cost of site leasing could present a major challenge for mobile operators, if site leasing costs for small cells are not significantly reduced compared to current costs charged for larger cell sites. Costs for the latter can amount to 15% of the operating costs associated with 4G and basic 5G access networks 79 in Europe.

2.3.Who is impacted and how?

ECN operators are directly impacted by all the problem drivers. The resulting higher costs and longer duration of network deployment could limit the scale of investments that ECN operators can make and/or affect their profitability. Larger ECN operators, including those with nationwide and multi-national footprints, are particularly affected by the large number of authorities involved in obtaining permits for ECN deployment and access to sites for installing mobile infrastructure. Meanwhile, smaller ECN operators without their own legacy ducts and poles (including operators that could be characterised as SMEs) are hampered by a lack of effective options to access physical infrastructure and the opportunity to coordinate civil works, which may undermine their ability to compete for State Aid or to deploy alternative FTTH networks in competition to, or in place of deployment by incumbent operators. When they do deploy their own physical infrastructure, smaller ECN operators deploying VHCN also fear that requirements to let other operators access their physical infrastructure or co-ordinate civil works will lead to unviable duplication of VHCN and undermine their business case. Delays or limitations in the deployment of fixed and mobile VHCN have a knock-on effect on other elements of the value chain including impacts on revenues for equipment manufacturers and the manufacturers of fibre cables.

Energy and transport companies as well as other network operators 80 face a lack of clarity regarding the application of the BCRD and have concerns that the terms under which they are required to provide access or to co-ordinate civil works may not allow them to recoup their costs or may not take into account security or health risks associated with their core business. The existing system under the BCRD based on individual dispute resolution creates uncertainty for these players and is associated with high administrative costs.

Consumers, in particular those in rural areas, face limitations on access to Gigabit broadband, which restrict their ability to make use of advanced digital applications. This could limit their ability to benefit from remote healthcare and education or to engage in home working. Consumers also face disruption when operators dig the streets in parallel instead of co-ordinating their deployment, as well as further disruption and increased costs when ECN operators are forced to deploy FTTH wiring inside buildings which were not pre-equipped with this infrastructure.

Lack of access to, or high prices for Gigabit connectivity is also a significant challenge for businesses, and in particular SMEs and smaller public facilities (such as doctor’s surgeries, libraries) because it limits their ability to benefit from productivity gains associated with faster broadband and advanced digital applications. Thus, delays in achieving full VHCN coverage could affect EU’s wider digital development and capacity for industrial leadership and public sector transformation, which are key pillars of the EU’s Digital Decade goals 81 . SMEs are likely to be disproportionately impacted as they may rely on mass-market Gigabit broadband solutions, whereas larger businesses may be able to afford bespoke connectivity solutions including leased lines to support their bandwidth needs 82 .

Municipalities and/or other competent authorities have to deal with multiple separate requests for access to public physical infrastructure or civil works coordination when they act as a network operator as well as with requests for permits and rights of way from ECN operators, increasing administrative workload. For them, manual systems and processes for permit granting are associated with longer processing times and potentially higher costs. They also have to factor in the uncertainty in case of disputes which hampers forward planning and efficient resource allocation.

Finally, slower transition to modern FTTH and 5G networks results in relatively increased GHG emissions from electronic communications networks themselves, since existing electronic communications networks, such as FTTC/G.fast or cable DOCSIS 3.1 are less energy efficient in transmitting data traffic. Deployment models such as network sharing and co-ordination of civil works also serve to reduce GHG emissions associated with network deployment. Moreover, slow deployment of fixed and mobile VHCN limits the potential for other sectors to use digitisation as a means to achieve energy savings, undermining the achievement of the European Green Deal targets, especially in rural and remote sites in sectors such as agriculture, energy generation, and transport.

2.4.How likely is the problem to persist?

The outcome of the evaluation suggests that measures taken under the current Directive are unlikely to lead to significant improvements in most aspects related to the two identified problem areas explained above.

As explained in detail in section 5.1, instruments such as Article 57 of the EECC or the Connectivity Toolbox are unlikely to solve all the problems identified across the EU, and in particular the challenges to locate and access sites for wireless/mobile deployment or the lack of suitable in-building infrastructure and fibre and the limited coordination of civil works. Article 57 of the EECC, when transposed and implemented, will still be limited to the deployment of small cells that meet certain criteria while leaving out other network elements which need to be installed for 5G. Similarly, a review of existing measures by Member States as well as commitments made in the Connectivity Toolbox roadmaps and measures implemented so far show that in many cases there are no concrete action taken in relation to the agreed best practices for reducing the cost of deploying fixed and mobile broadband. Moreover, the scope of the Toolbox does not include all areas covered by the BCRD (excluding for instance access to in-building wiring, civil work coordination, except for transparency measures).

Lengthy and complex processes result in excessively high administrative costs. For example, ECN operators employ large teams to handle permit applications for fixed and wireless / mobile infrastructure from multiple authorities at an estimated cost of more than EUR 75m annually across the EU 83 . These estimates do not reflect the cost to local authorities and other competent authorities of processing permit applications for ECN deployment, which could be at least of the same magnitude, and likely higher, given the large number of local and regional authorities active across the EU.

Complex processes and the lack of clarity about terms to access public facilities are also expected to impact wireless / mobile deployment, and particularly for the deployment of 5G in mid-bands (below 6 GHz) 84 , as well as 5G development in millimetre wave bands (26 GHz and above), because the use of higher frequencies will require extension in backhaul networks and the deployment of new sites. Projections suggest that under current conditions, deployment of 5G in mid-bands, in particular in the 3.6 GHz pioneer band, is likely to be restricted to major cities and highways, and that it may reach only around 30% of the population at the end of 2025.

Moreover, the cost of negotiating access to multiple small cell sites (including those needed to install SAWAPs) owned by different public bodies is significant and time consuming for ECN operators and public authorities. Overall, the support study estimates that if resources needed for access requests by the largest fixed mobile converged operators increase by one third to address increased access requirements for mobile sites and rights of way linked to 5G densification and FTTH expansion, additional costs would amount to around EUR 24m across the EU 85 . 

Delays in the availability of advanced 5G services are also expected. Investments in outdoor small cells (including but not limited to SAWAPs), a necessary infrastructure, to support more advanced applications such as Connected and Automated Mobility (CAM) are not yet prioritised by most mobile network operators according to interviews by study consultants, and a 2021 study by Analysys Mason 86 suggests that comprehensive deployment of ‘full 5G’ (beyond dense urban areas) and support for associated use cases is likely to begin only in 2025, and that by 2030. Coverage of massive MIMO 87 will reach only between 30-60% of the population and 10% in terms of geographic area on a purely commercial basis. This would leave many significant roads, transport links and agricultural areas unserved, as well as certain healthcare facilities and municipal buildings.

3.Why should the EU act?

3.1.Legal basis

The new instrument will amend the BCRD which was adopted under Article 114 of the Treaty on the Functioning of the European Union (TFEU).

Despite improvements since the regulation of electronic communications started the establishment of a single telecoms market in the Union, electronic communications markets remain national (see merger control decisions), with different supply and demand conditions, different spectrum licences awarded on a national basis, and different (albeit harmonised) regulatory regimes. Telecom operators must adapt their strategies to national constraints and differences even when they form part of larger multinational groups. This fragmentation of the EU market alongside national borders prevents the EU from reaping the full potential of an EU-wide telecoms market. While there are around 50 mobile, and more than 100 fixed operators in the EU, the four main European mobile operators (i.e. Deutsche Telekom, Vodafone, Orange and Telia) hold over 60% of the mobile market. At the national level where competition occurs, the level of concentration is high with 16 Member States having three mobile network operators, 9 Member States having four and 2 Member States having five. In certain Member States, the number of distinct mobile telecoms network infrastructures is even lower than the number of operators due to existing network sharing arrangements (e.g. in Denmark or Italy). Nonetheless, ECN operators are not able to realise scale effects because differences in national rules keep telecom markets mainly national. Even for the big four operators, scale effects are limited because they operate in national markets and do not seem to fully harmonise their offerings and operational systems.

Yet, digital infrastructures, comprising among others fibre cables supporting fixed electronic communications, and antennas required to provide mobile communications, including in remote areas, have a strong downstream effect on cross-border trade and services provision, since many services can only be provided where an adequately performant network is in place all across the EU. Hence, they are essential to ensure the proper establishment and functioning of a market for digital products and services within the EU, e.g. fixed and wireless/mobile communications, data services, and the digital transformation of manufacturing, health, construction, agriculture and mobility ecosystems.

For example, deployment of mid-band 5G is needed to support 5G applications (e.g. Internet of Things - IoT) that are intrinsically multi-national or facilitate cross-border connections, such as Connected Automotive Mobility; such vehicles could not travel in areas where VHCN is lacking. More generally, full connectivity everywhere is required for moving applications if they are to take advantage of the single market. Similarly, many “data-hungry” advanced industrial and technical applications, including in particular artificial intelligence (AI) applications, the European Quantum Communication Infrastructure (EuroQCI) Initiative 88 and high-performance computing, for example used for smart farming or environmental surveillance, rely on ubiquitous coverage (including in remote areas). Moreover, the applications that are playing an increasingly important economic role due to the COVID pandemic, such as videoconferencing, also rely overwhelmingly on VHCN. The European Data Strategy adopted in February 2020 foresees that the global data volume will reach 175 zettabytes and the data processing model will change to 80% smart connected objects and 20% centralised computing facilities by 2025. The successful and efficient rollout of highly secured and state-of-the-art fibre and 5G network are therefore indispensable for future digital services and the industrial data wave.

Hence, ubiquitous VHCN coverage is crucial to ensure that these services can be provided seamlessly cross-border. When roll-out costs are higher than necessary, which will ceteris paribus reduce deployment of VHCN, provision of many of these services will become impossible in a number of areas, negatively impacting the function of the internal market.

Therefore, in view of the objective of improving the conditions for the establishment and functioning of the internal market, Article 114 of the TFEU remains the appropriate legal basis.

3.2.Subsidiarity: Necessity of EU action

Experience acquired with the implementation of the BCRD has demonstrated that the common objective to provide the EU with full high speed broadband coverage could not be achieved by Member States alone within a reasonable time and with the highest possible savings of private and public investment. The measures that Member States have adopted so far to incentivise network deployments and in particular to reduce the cost and time of deployment differ greatly, sometimes even from region to region and from municipality to municipality. This patchwork of rules and practices at national and sub-national levels, facilitated by the fact that a Directive allows for more flexible transpositions, hinders the further development and growth of European companies – e.g. electronic communication companies, equipment manufacturers, or civil engineering companies – by significantly increasing the administrative overhead costs of VHCN deployment. Fragmented approaches across Member States to solve the same problems increase complexity and costs especially for multi-national operators, which have made half of investment in electronic communications across the EU 89 . Given that the current legal instrument is a Directive, it has not been possible to limit effectively the variety of fees charged to operators. For smaller companies this fragmentation constitutes an obstacle in their efforts to reach economies of scale at EU level in the face of increasingly global competition.

While the recently adopted European Electronic Communications Code is harmonising different aspects related to the authorisation regime, SMP regulation and consumer protection, it does not address obstacles specifically linked with network deployment such as local permits rules, bottlenecks to access existing non-SMP physical infrastructure or to coordinate civil works. In the absence of additional policy action at European level, it is likely that the patchwork of rules at national and sub-national levels resulting from the implementation of the BCRD will persist or accentuate and, as such, will increase the fragmentation of the internal market. At the same time, the problems encountered to accelerate VHCN deployment (see section 2.1) are common to most if not all Member States. The causes of the problems (see section 2.2) are also similar across the Member States, and reducing costs and streamlining administrative procedures as key tools to address these problems are equally valid in all Member States. Thus, the absence of a harmonised set of rules such as would be provided by a Regulation makes market entry from other Member States unnecessarily difficult, as operators need to invest a second and third time in regulatory compliance. Yet entering in almost each national market is a core part of the competitive strategies of multinational market players, to the benefit of the internal market.

VHCN deployment that is slower, less widespread and more expensive than necessary would in particular jeopardise a swift exploitation of the possibilities afforded by 5G, which will be one of the most critical building blocks of our digital economy and society in the next decade. The launch of commercial 5G services will require substantial investments into the densification of wireless/mobile networks, small cells and other types of wireless infrastructure as well as backhaul connections to the core network via VHCN in order to achieve the distinct 5G capabilities, such as area traffic capacity, connection density or user experienced data rates.

One should note that in particular the deployment of fixed VHCN backhaul connections will, by reducing wireless connections to the core network, contribute significantly to the reduction of exposure of the general public to electromagnetic fields (EMF) 90 . To date, twenty Members States apply the Council Recommendation levels/limits, while seven impose stricter limits than those of the Recommendation, but use them as a reference level. The fragmentation of nationally applicable limits risks public trust in the Council Recommendation 1999 and thus in the development of 5G networks, despite the fact that the consistent application of EMF limits is in line with Article 45 (2) (h) and 58 of the Code. However, this cannot directly be tackled by EU action, since the legal competence to regulate the emission power of mobile stations, and therefore the exposure of the public to EMF, is primarily in the hands of the Member States Reducing the exposure can however make this fragmentation less relevant.

5G will support new types of applications connecting devices and objects, including Connected and Automated Mobility, the Internet of Things (IoT), but also ad hoc tailor- made connectivity solutions for a number of vertical industrial sectors (automotive, healthcare, transport, utilities, manufacturing, logistics, energy distribution, agriculture, education, tourism, media and entertainment), where today's networks provide only inferior "one size fits all" solutions. Although many of these transformations have already started on the basis of existing networks, it is anticipated that they will reach their full potential only with the deployment of 5G. As a result, 5G success in Europe is expected to generate highly qualified jobs in the ICT sector and the adjoining ecosystems estimated at up to two million jobs in the EU 91 .

3.3.Subsidiarity: Added value of EU action

Fragmented availability of information and fragmented access to physical infrastructure as well as the lack of digital information platforms/tools and of digital permit granting systems (at least on a national level) give rise to significant unnecessary administrative costs for the industry and to longer deployment processes, and thus hamper entry and expansion by electronic communication providers. High deployment costs are particularly pronounced for non-incumbent fixed and mobile operators which do not have their own legacy physical infrastructure, and thus a failure to ensure effective access to physical infrastructure or support civil works co-ordination can tilt the playing field in favour of existing (often nationally based) large players at the expense of potential challengers, in particular cross-border entrants, thus affecting the good functioning of the internal market. The immediate benefit of EU action would be that the EU would have a clear and predictable framework supporting network deployment.

Measures at EU level would allow more efficient planning and investment deployment processes (and thus economies of scale) for ECN operators. For example, network operators active in several Member States would be able to negotiate access to physical infrastructure, and to obtain permits including rights of way, more easily and at less cost, as well as to deploy fibre in-buildings more efficiently. Moreover, such economies of scale and associated savings would go beyond the electronic communications sector and would spread to other industries as well (e.g. equipment manufacturers could have an EU market for technical solutions enabling cross-utility cooperation; construction companies could benefits from cross-border works).

As a result, EU action would also facilitate specific cross-border projects promoted by the EU. The Connecting Europe Facility makes available EUR 2.07 bn 92 for the development of projects of common interest relating to the deployment of and access to safe and secure very high capacity networks, including an indicative list of 5G corridors 93 , ensuring that major terrestrial transport paths have uninterrupted 5G coverage. The deployment of these projects of common interest encompass: finalising commercial and technical plans, applying for permits and rights of way, performing civil works and installing equipment and, finally, connecting customers. The first three phases will significantly benefit from EU action improving the BCRD. It will allow network operators involved in projects of common interest better planning and implementation of the concerned multi-country digital connectivity infrastructures. All Member States would be affected by inefficient deployment.

As estimated in the ICF, WIK & EcoAct study, with a better enforcement of more adapted rules of the Directive, the EU could save EUR 2bn of public resources and EUR 10bn of private investment in the deployment of FTTH networks 94 (cost of non-action). EU inaction would also acquiesce to slow deployment of full fixed and 5G networks, and allow excessive bureaucracy to cause cost to ECN operators and public administrations, which may exceed EUR 40m per year, mostly for additional staff handling access and permit requests. On the other hand, if uncoordinated action were taken at national level, at most a 3 months reduction on average in the timeframes to deploy mobile infrastructure could be achieved to across the EU 95 . Finally, EU inaction would risk depriving certain regions in the EU of the full benefits of digitalisation, which means furthering the digital divide and inequalities between EU citizens.

Finally, the major building renovation wave by 2030 triggered by the Green Deal objectives also represents a huge opportunity for high performant in-building infrastructure, including fibre readiness. According to the Commission Communication, 96 35 million building units should be renovated by 2030 to become more energy efficient. Moreover, the increased rate and depth of building renovation will have to be maintained also post-2030 in order to reach EU-wide climate neutrality by 2050. The cost of equipping new and majorly renovated buildings with highly performant in-building infrastructure, including fibre ready infrastructure, is marginal comparing with the overall renovation cost. Therefore, EU action regarding in-building infrastructure and the related standards should ensure that all Member States use this opportunity to make significant progress in this direction at the same time and with the same speed.

4.Objectives: What is to be achieved?

4.1.General objective

The main aim to which the revision of the BCRD should ultimately contribute is the fulfilment of the 2030 Gigabit connectivity targets set by the Commission and supported by the Council. To do so, the objective of the revised legal instrument resulting from the review of the BRCD is to increase coverage and facilitate the deployment of fixed and mobile very high capacity networks in the EU, thereby contributing to a better functioning of the internal market.

The EU’s new ambition for 2030 on a digital transformation of the economy and society, which is human-centric and respectful of the sustainability, means that every citizen and business in the EU should be put in the position to benefit from the opportunities offered by digitalisation, no matter where they are located, in urban or in rural areas. This requires VHCN-level connectivity, since capacity and performance needs of businesses cannot adequately be satisfied by less capable networks. Moreover, rural areas should not be excluded from the digital transformation, as, for instance, many citizens may decide to work remotely or need remote health services in those areas. Similarly, in order to support territorial cohesion businesses located in rural areas should be able to benefit from VHCN deployment underpinning high quality level digital solutions, like for ex. smart factories or smart farming. It should be underlined that since this Directive is part of a broader framework (see section 1), the revision of the BCRD, while increasing coverage and facilitating deployment is not able to achieve the VHCN connectivity targets and objectives on its own.

4.2.Specific objectives

This initiative’s specific objectives 97 are to

1.Reduce costs of VHCN deployment by optimising the deployment and re-use of physical infrastructure

Network operators seeking to re-use existing physical infrastructure in order to deploy VHCN should be able to find easily all the relevant information about such physical infrastructure by consulting a platform where that information should have been provided in electronic form by private operators and public authorities. Network operators deploying new VHCN should also be able to count on obtaining access to existing and suitable physical infrastructure (including non-network facilities and in-building infrastructure) at fair and reasonable conditions, while safeguards should be in place to prevent unviable overbuild. Publicly funded civil works should be coordinated whenever there is an interest by an ECN operator.

2.Reduce costs of VHCN deployment through consistent, streamlined and digitised administrative procedures required for network deployment across the EU

Procedures, permit granting and rights of way required for VHCN deployment should be organised in such a way as to minimise bureaucracy and delays, including through approximation of rules, where appropriate.

These objectives are also consistent with the European Green Deal, as fibre and 5G networks are expected to increase energy savings in other sectors as well in the operation of electronic communications, thereby contributing to reductions in greenhouse gas emissions by 2030. Moreover, by further promoting the re-use of existing physical infrastructure and the coordination of civil works, the revised legal instrument promotes a more environmental friendly deployment of ECN. The specific objectives are also consistent with the Charter of Fundamental Rights, and in particular with Article 16 (Freedom to conduct a business), Article 17 (Right to property), and Article 37 (Environmental protection).

Figure 3: Intervention logic

Source: European Commission based on support study

5.What are the available policy options?

Four policy options have been examined. They generally reflect a progression from less to more ambitious changes and from lower to higher EU-level harmonisation.

The project team, supported by the external consultant, elaborated a number of measures which were considered apt to support the objectives of reducing costs of network deployments and optimise administrative procedures. Given that the bundling of individual measures in the options is inherently subjective and combinations of measures in the different areas are multiple, the project team identified the following criteria that could inform its choice of bundling, notably:

(I)the number of changes and the areas affected by such changes,

(II)the extent of obligations imposed on public authorities or network operators, and

(III)the level of harmonisation overall.

The choice of individual measures to feed into specific policy options (and the several policy options) also took account of stakeholders’ consultations and proportionality considerations. These were notably presented during the validation workshop organised by the consultant which took place in January 2022. The resulting options and logic are the following (see more detailed description of the four policy options and their content in Annex 4):

5.1.What is the baseline from which options are assessed?

The baseline would consist in the continuation of the implementation of the current Directive, together with the rest of the EU regulatory framework for electronic communications (notably the Code), and the (voluntary) Connectivity Toolbox .

Article 57 of the Code and the related Commission Implementing Regulation 98 are expected to somewhat reduce the administrative burden as well as the cost of deploying small-area wireless access points (SAWAPs) by establishing exclusions at EU level from permits for those small cells which meet certain criteria and require public authorities to provide access to certain non-network facilities including street furniture and public transport facilities 99 , which are suitable to host SAWAP on fair and reasonable terms. However, the negotiation process for accessing public sites is likely to be complicated, often involving a range of local and regional actors, and there is likely to be limited information about the location and suitability of relevant infrastructure for SAWAPs 100 .

Moreover, the timely deployment of 5G will require network elements other than SAWAPs, i.e. larger in terms of volume and emission power, which will also require access to different assets or physical infrastructure than those covered by Article 57 of the Code. There are very few Member States that have extended the principle of access beyond SAWAPs, as set out in Article 57(4) EECC and/or provided information about the location of facilities (including public buildings) with support for the conclusion of access agreements via a coordinating body, and it is too early to assess the impact.

The Connectivity Toolbox contains a recommendation that access should be facilitated to public infrastructure for facilities which go beyond the narrow definition of SAWAPs. However, having regard to the Member States’ Connectivity Toolbox Roadmaps, there are few concrete plans and actions taken by national administrations to take active measures that would go beyond the requirements of Article 57 EECC.

On the other hand, the implementation of the Connectivity Toolbox (together with measures introduced beforehand) should help for instance increase the use of civil works co-ordination due to the pro-active notification of planned works 101 , while the introduction of exemptions for certain categories of works is expected to streamline permit application processes 102 . However, current experience shows that permit exemptions are limited to specific cases and the approaches taken vary widely 103 , which could perpetuate a fragmented approach.

Table 2: Permit exemptions foreseen by Member States

Source: Summary Report of Best Practices of the Special Group for developing a common Union Toolbox for connectivity

Moreover, an assessment of the Connectivity Toolbox roadmaps shows that there are no concrete plans to introduce digital platforms for permit granting 104 or require simultaneous processing of permits and rights of way and permit applications with alignment of the deadline in several Member States 105 , and a significant number of Member States have no plans to provide guidelines on the interpretation of wholesale pricing principles for access to physical infrastructure or cost allocation in the context of civil works co-ordination 106 . But even taking these few cases into account, guidelines on wholesale charges for access to physical infrastructure at national level could also increase complexity and divergence in the application of the principles set out in the EU legislation.

Furthermore, the Connectivity Recommendation and the related Toolbox do not contain any provision relating to in-building infrastructure, even though this element constitutes a substantial portion of the cost of deploying VHCN (estimated at 10-15%) and ECN operators consider that challenges persist in many Member States. Only a limited number of Member States 107 have introduced standards and certification measures to address this bottleneck at national level, and where they exist, the degree of enforcement varies, and obligations apply only to the buildings which are newly built or renovated. For these reasons, the support study assumes that under the status quo only 10% of buildings still to be reached by FTTH across the EU will have high-speed broadband ready in-building infrastructure pre-installed 108 , and that ECN operators accessing additional buildings may in some cases still need to invest in in-building fibre and potentially elements of in-building infrastructure to connect customers to FTTH.

The review of the BCRD is conducted in parallel with the work on a new Commission Recommendation on VHCN, which will provide guidance to NRAs on remedies to be imposed on operators with SMP, with a view to foster efficient investment in VHCN, while promoting competition in retail services. In particular, the new recommendation could provide guidance on the obligations that should be imposed on these operators with regard to access to their physical infrastructure assets and the price control obligations imposed in relation to the access to these assets. However, the recommendation would address only networks owned or operated by SMP operators, and its provisions would not be binding on the NRAs.

In this baseline scenario ICF, WIK & EcoAct’s projections show that, on average, duct access will be used for 5% and pole access for 15% of new fixed and mobile VHCN deployment by 2030. In addition, around 3% of new deployments could be based on co-ordination of civil works 109 . These projections would still imply that a substantial proportion of newly constructed VHCN infrastructure will be deployed based on greenfield deployment, resulting in unnecessary costs and excess GHG emissions associated with construction, or can only realistically be deployed by operators which have their own physical infrastructure, which could limit the prospects for competition for public funds (thereby raising costs) or restrict infrastructure competition 110 . Moreover, ECN operators would still need to expand existing teams handling permit applications and access to sites for the deployment of VHCN infrastructure (including access to buildings, as well as network infrastructure) to support deployments of FTTH and mid-band 5G by around 20% on average. Local authorities may also need to devote additional resources to handle these requests.

Taking into account the above as well as the Member States national broadband plans 111 adopted in connection with the EU Gigabit society targets for 2025 112 together with the allocation of additional state aid 113 and EU funds, ICF, WIK & EcoAct expect that under the status quo, VHCN coverage in the EU will reach around 65% by 2025 and 90% by 2030 114 (current total VHCN coverage is 59%). While these forecasts could be optimistic in view of the uncertainty regarding the actual use of State aid and EU funding, they are consistent with projections made by Analysys Mason 115 , although below those made by IDATE for the FTTH Council Europe. From 2025 onwards, ICF, WIK & EcoAct assume that cable networks will be gradually transitioned towards FTTH and thus eventually incorporated within the FTTH figures.

Similarly, based on available literature 116 and experience with the deployment of previous generations of mobile technology 117 , ICF, WIK & EcoAct predict that 5G population coverage based on low frequencies such as 700MHz (‘basic’ 5G) as a proportion of the population will be largely complete by the end of 2026. However, geographic coverage will continue to lag behind 118 . Moreover, deployment of mid-band 5G, which will support higher bandwidths and low latency IoT applications, is likely to be restricted to major cities and highways, reaching 30% of the population at the end of 2025 and extending to only 75% by 2030 119 . Some streamlining of resources would occur but 5G adoption in Europe (excluding IoT and Fixed Wireless Access (FWA)) would significantly lag behind that of the US and Japan by 2025 120  and EU’s FTTH coverage would be below that of China and Japan.

The recent Commission initiative on a Union Secure Connectivity Programme complements the BCRD while having a different objective. The latter aims to facilitate broadband access by satellite to areas that lie beyond the reach of other fixed and mobile electronic communications network infrastructure. However, satellite is not considered to be a substitute for fixed broadband technologies from a performance perspective 121 , and its main purpose is to ensure resilience and provide ubiquitous high-speed broadband capacity for governmental users including in otherwise ‘dead zones’ rather than the Gigabit speeds required in the post-COVID digital era. It should also be noted that under that initiative, the EU would have the right to prioritise the provision of governmental services over commercial services. The Secure Connectivity initiative is part of the EU’s attempts to improve its strategic autonomy, i.e. being less reliant on non-EU actors, especially regarding technology. It should also be noted that satellite and 5G for wireless/mobile connectivity, including Fixed Wireless Access (FWA), are different technologies. Both 5G FWA and satellite will be used though to provide connectivity in rural areas, islands and outermost regions. Speeds they can provide are also different.

5.2.Description of the policy options

The table below presents the different measures included in each policy option.

Except for option 1 (minimalistic changes), the policy options do not differ as to the legal form to be chosen for the revised legal instrument which should take the form of a revised Regulation covering all substance areas. A Regulation will overcome the current shortcomings resulting from the extent of the optional provisions of the BCRD (which led to a very patchy and minimalistic implementation). A Regulation would ensure uniform implementation, while not requiring Member States to transpose its provisions, thereby inherently opening up the possibility that the new provisions could produce their positive impact on deployments cost reduction in a shorter time period, thus providing more timely support to the achievement of the Digital Decade connectivity targets. Moreover, a Regulation would also reduce the risk of national over-regulation beyond the EU requirements (“gold-plating”) which increases the regulatory burden to EU businesses. A Regulation would therefore achieve the greatest impact in terms of the advancement of Gigabit networks deployment.

Table 3: Policy options in a nutshell

Policy option 1 - brings only few changes, does not extend much obligations (only in 2 areas: permits and transparency) and brings no further EU harmonisation. It is very minimalistic with some corrections and updates and no major changes in the obligations, except for a few. Policy option 1 relies on the consideration that a slightly revised Directive, coupled with the continued implementation of the Connectivity Toolbox best practices and the rest of the electronic communications framework, could be a balanced minimalistic way to improve the effectiveness of the most critical areas of the BCRD. First, mandating the provision of information held by public bodies in electronic format via SIP would address the problem of lack of or incomplete information about existing physical infrastructure. Second, mandating permit applications by electronic means and compensation for damages incurred due to delays in permit granting procedures would address the problem of reducing time and costs needed to obtain permits.

In addition, the Directive would also align it with the European Electronic Communications Code and its objectives, in particular the deployment of VHCN, which makes it technologically neutral and future-proven. 122 Finally, Option 1 would clarify some existing provisions with the view to align different interpretations of the same provisions across Member States (such as permits, publicly financed projects subject to civil works coordination) and clarify that assets subject to EECC or state aid obligations are excluded from parallel BCRD access obligations. Given its minimalistic changes, this option is expected to produce a limited impact thereby strengthening the single market only to a limited extent.

Policy option 2 - brings more changes and new obligations (although mainly to public bodies while exempting VHCN operators from some) but not much new harmonisation as it still leaves Member States margin to define several elements. Concretely, this option (but also options 3 and 4) increases the obligations on public authorities notably as regards access to their non-network public physical infrastructure because it is critical for VHCN deployment, notably of 5G mobile networks. Instead it exempts VHCN assets and projects from access to physical infrastructure obligations and civil work coordination to reduce the burden on VHCN operators and remove all together the risks of unviable overbuild 123 (however in so doing it risks emptying most of the regulation of its value). Option 2 leaves margin to Member States to define still many elements (such as the exceptions for sensitive public buildings or assets which could be defined by Member States themselves, and a coordinating body which, where appointed by Member States - in some they already exist - could facilitate the access requests and the processing of the request by public authorities).

This option is expected to improve measures on access to existing physical infrastructure, transparency, civil work coordination and reduce administrative burden by facilitating permit granting. It is therefore likely to strengthen the single market, by for instance facilitating market entry from different Member States or facilitating deployment of 5G networks which can support cross-border services and applications.

Policy option 3 overall increases the changes (which affect all areas of the BCRD) and introduces new obligations which are both on public bodies and network operators and the level of EU harmonisation. Option 3 would largely maintain the measures included in Option 2 (including the enlargement of the scope of the obligation to grant access to non-network publicly owned physical infrastructure and the few permit measures) but instead of providing for an exemption for VHCN infrastructure, it would define clearer rules in the Regulation on key aspects of access to physical infrastructure and civil works coordination (such as ‘fair and reasonable’ access conditions, alternative means of access or cost apportioning for coordinated civil works) as well as on grounds for refusal of access to physical infrastructure or coordination of civil works. Such rules would be accompanied by guidance at EU level to ensure a consistent application and a harmonized approach to similar problems. Thus, the problem of unviable overbuild would be tackled through EU rules and guidelines, allowing to limit the refusals to provide access or coordinate civil works to more specific circumstances and on a case-by-case basis compared to Option 2. This option would also establish consistent rules and processes on permit granting at national level supported by a ‘one-stop-shop’ based on a single national digital platform/tool, tacit approvals of permit requests/rights of ways where possible, and limit permit fees to the level of administrative cost. Deployments subject to exemption from permit granting would be specified at EU-level. This option would hence overall address the problems of high complexity, timeframes and costs to obtain permits and rights of way in a more harmonised manner.

To improve transparency conditions and access to information, this option would expand information requirements on existing physical infrastructure (i.e. which shall be geo-referenced and provided directly by all network operators (public and private), with some exceptions to ensure proportionality) as well as on planned civil works (proactive notification of all planned civil works) and require both sets of information to be available in respective digital platforms, and if possible interconnected.

In order to address problems of lack of or access to suitable in-building infrastructure and to ensure every EU household has access to Gigabit connectivity, this option would mandate fibre-ready in-building infrastructure and fibre in-building in every new (or majorly renovated) household as well as standardisation of in-building physical infrastructure at national level and guidance on access to in-building infrastructure at EU level (together and consistent with that of access to physical infrastructure). As this option is expected to significantly improve measures on access to existing physical infrastructure, transparency, civil work coordination and reduce administrative burden by facilitating permit granting, it would also strengthen the single market, by for instance facilitating market entry from different Member States or ensuring 5G networks are developed to support cross-border services and applications.

Policy option 4 - is the most far reaching in terms of number of changes, it further extends obligations to private network operators owing physical infrastructure and to private agents owing assets which are not part of a network (e.g. commercial buildings) and harmonises all elements at EU level.  Option 4 would entail maximum EU-level harmonisation, because it would include all the measures in policy option 3, but it would extend new obligations for network operators, public authorities and even other private operators. Specifically, it would extend access and transparency obligations to certain private assets (e.g. commercial buildings) and obligations of civil works coordination also to projects which are not publicly funded. This option would mandate the establishment of a combined single digital platform for existing physical infrastructure, planned civil works and, optionally, permit granting procedures. Finally, this option would mandate standardisation of in-building physical infrastructure at EU level (compared to standardisation at national level in policy option 3). Because of the number and reach of the changes it would bring, this is likely to be the option that would strengthen the single market the most.

5.3.Options discarded at an early stage

The repeal of the existing Directive would imply removing current EU-level obligations and relying entirely on soft law measures such as the Connectivity Toolbox to guide Member States in limiting costs and administrative burdens at national level. The option was considered (broadly on qualitative terms) but discarded upfront as the identified problems would be expected to increase, given the lack of some minimum harmonised rules, for example in areas such as establishing deadlines for permit granting procedures or promoting coordination of civil works. Also having in mind that broadly all categories of stakeholders have confirmed the relevance of BCRD and its objectives and pointed to areas of improvements, the repeal option should be discarded.

6.What are the impacts of the policy options?

In order to proceed with the assessment of the economic, societal and environmental impacts of the four policy options, we have mainly relied on the results provided by a cost model and theory-based modelling exercise developed as part of the support study by ICF, WIK & EcoAct, which is briefly described below (see Annexes 5 and 7 for the full description of the methodology and underlying assumptions).

The model used in the support study is a detailed bottom-up cost model, covering the use of FTTH and 5G Fixed Wireless Access in the access network and used to calculate the cost savings and potential expansion in VHCN deployment. The main parameters are the cost of deployment per km in different scenarios (e.g. under asphalt, aerial), the cost of network elements to be deployed (ducts, poles, fibre cables etc) and the Weighted Average Cost of Capital (WACC) which are derived from cost data used in regulatory cost models prepared by one of the contractors for the German electronic communications regulatory authority.

The type of model used, the underlying assumptions and rationale for those assumptions are described in Annex 5 and in more detail in Annex 4 of the support study. The assumptions used for the modelling were based in part on inputs from stakeholders via surveys and interviews (as well as on benchmarks) carried out as part of the support study. The assumptions made concerning the impact of the different options on outcomes concerning infrastructure re-use and other factors are shown in Tables 1 and 15 (in Annex 5). The different elements of each option are listed alongside assumptions regarding the directional effects (showed using + and -). These are then used to adjust the model inputs for factors such as the proportion of shared ducts and poles, and civil works coordination, the wholesale charge for access to physical infrastructure, etc.

The assumptions made concerning the impact of the different policy options on outcomes concerning infrastructure re-use and other factors used for the modelling were partly based on inputs from stakeholders via surveys, interviews and workshops (as well as on benchmarks), as part of the support report. These assumptions were presented to the stakeholders during a workshop organised by the contractors of the support study on 27 January 2022 where the contractors presented the methodology and main conclusions of the support study and stakeholders had the possibility to comment.

It should be noted that according to the consultants, the modelling approach is very mature because it has been used and continuously updated in various projects (prior to being applied to the impact assessment of this initiative). In doing so, the model has received peer quality reviews from the consultant group, as well as reviews by different project partners/customers, national regulatory authorities and governments. In general, the use of a regulatory cost model as a basis for the exercise makes the calculation more robust than other types of more simplistic modelling.

The expected direct policy effects of the different policy options on accessing existing infrastructure and civil works co-ordination as well as their effects on the timing of VHCN deployment (step 1) were fed into a specially adapted cost and viability model developed by contractors. This in turn provided estimates of the impact of the policy options on the cost of FTTH and 5G deployment, and the potential additional coverage that could be achieved if cost savings were reinvested in VHCN deployment (step 2). These scenarios were translated into effects on broadband speed and bandwidth consumption (step 3), which enabled an assessment of the economic and environmental impact of the policy options on GDP and GHG emissions, based on correlations between these factors established in academic literature (step 4). The societal impact is instead described in qualitative terms.

6.1.Economic impact

The cost model calculates the total capex requirements and viability of deployment in given areas on the basis of assumptions made regarding the degree of infrastructure sharing and civil works co-ordination that might result from the different policy options. Assumptions concerning the effects of different options on the degree of infrastructure sharing and civil works co-ordination (step 1) have been developed on the basis of data gathered from dispute settlement bodies and ECN operators alongside interviews conducted for the support study and relevant literature revised by the contractors. 124 The following table summarises the main estimates for step 1:

Table 4: Estimates of the increases of the different options on infrastructure sharing, co-deployment, and the timeframes for deployment (step 1)

Source: support study

On the basis of detailed modelling using an adapted bottom-up cost model for the deployment of VHCN, the support study estimated the following impact in terms of km of new network built by 2030 depending on the degree of infrastructure sharing and co-ordination of civil works achieved with the different options. The efficiencies achieved could reduce the cost of deployment and reduce the required subsidies 125 . The next step has assessed what would be the VHCN coverage increase in case the savings are all reinvested in additional FTTH coverage beyond the base case in which case FTTH coverage is assumed to reach 90% by 2030 (scenario A) or in case they are all reinvested in deploying 5G FWA in unserved areas (scenario B) rather than deploying FTTH or maintaining FTTC in those areas. The increase in the deployment of mid-band 5G has also been estimated. Both scenarios are relevant, and ECN operators and Member States (via subsidy programmes) might choose either option or a combination depending on the specific characteristics of the rural areas to be served and the bandwidth needs of the populations / industry in those areas. These scenarios are useful in terms of allowing a quantitative comparison of the options, even if there would be many factors affecting the actual decision about the use-reinvestments of the cost savings achieved 126 .

The following table summarises the main results after step 2, which already show that options 2 and 3 are the ones which are contributing the most to the objectives of the imitative (namely Gigabit coverage for all households in the EU and 5G in all populated areas):

Table 5: Outcomes of the model (step 2)

Source: support study

Then the model assesses the impact in terms of broadband speed and bandwidth consumption, to finally obtain the outcome in terms of GDP, jobs and GHG emissions. Table 7 included at the end of this section provides for the overall conclusions of this analysis. As a result, policy options 3 and 4 are likely to have the most significant positive impacts for economic and societal development as well as in limiting GHG emissions from the electronic communications sector during a period where bandwidth consumption is expected to expand rapidly.

There is widespread literature on the topic of economic impact of improved broadband quality in terms of GDP growth and job creation. Literature suggest that the increased availability of VHCN that could be supported through the revision of the BCRD is likely to create positive spill-over effects as digitisation is used to improve energy efficiency in other highly polluting sectors such as buildings and transport. In addition, a key driver of economic benefits from 5G is expected to come from knock-on effects in other sectors resulting from 5G applications (including IoT), such as in healthcare, manufacturing, transport, energy or agriculture. However, these effects could not be quantitatively assessed.

Drawing on the literature, the support study assessed the economic impact based on a theory-based model estimating how expected increases in fixed and mobile speeds resulting from the different policy options for the revision of the BCRD might impact GDP. The modelling approach draws on the elasticities estimated respectively by the 2SLS model in Bohlin Rohman Kongaut (2017) for FTTH and Edquist et al. (2018) 127 for the impact of 5G on the basis of the impact that resulted from 4G) . 128 The main results of the theory-based modelling exercise developed in the support study are provided in this section (see Annex 5 for more details).

As regards the impact of 5G (2023-2030) and fixed VHCN (2023-2030) on GDP, the following table displays the overall increment to GDP resulting from increased fixed VHCN and 5G deployment compared with the baseline and distinguishing scenarios A and B for fixed network reinvestment.

Table 6: Incremental impact options on GDP up to 2030 (billion EUR) from 5G and fixed VHCN

Source: support study

As shown above, scenario A (savings are reinvested in additional FTTH coverage beyond the base case) appears to have a greater GDP impact than scenario B (savings are reinvested in deploying 5G FWA in unserved areas) across all policy options, suggesting that the impact of the increases in VHCN coverage that could be achieved by focusing on 5G FWA rather than FTTH in rural areas are counteracted by the reduced speeds that would be achieved by serving rural customers with FWA instead of FTTH. 129

However, policy-makers might consider that equity gains might exceed economic gains in the second scenario. More generally, there is an ongoing debate in the literature over the equity-efficiency trade-off considering that investing in rural areas would address the digital divide but at the expense of not pursuing efficiency gains. The theory of efficient markets indicates that resources should be allocated where the return on investment is maximized 130 . In contrast, investing in rural areas would improve digital equity by reducing digital disparities. However, the final results on GDP impact of both scenarios are uncertain given the number of factors intervening.

Moreover, the modelling has also estimated that the additional bandwidths and reach of the FTTH networks could contribute to the creation of around 154,000 jobs under policy option 1, 338,000 jobs under policy option 2, 627,000 jobs under policy option 3 and 656,000 under policy option 4. The estimations regarding the impact of increased VHCN deployment on jobs are considered less robust than those on GDP because there is less peer reviewed literature available and the results of research which has been conducted vary, potentially because studies focus on specific countries such as Sweden and the US, and may not be representative. 131 For this reason, the estimates regarding impact on jobs should be given less emphasis and treated as rough estimates (or alternatively shown through directional symbols such as ‘+’, ‘++’ etc.). It should be noted that the rough estimates given should be underestimates, because they do not take into account potential effects on job creation from 5G applications. There are (commercial) studies listed in the report about the potential effect of 5G on job creation, but such estimates are very speculative because they look at the possible effects of new applications that have not yet been rolled out to any significant degree in Europe or elsewhere, and there is limited data available on which to conduct empirical research. 132

Although difficult to quantify, it is expected that there will be a spillover effect on different sectors of the economy from 5G and IoT. For example, new IoT applications in fields ranging from CAM, smart cities to smart factories, smart agriculture and smart grids, can positively impact productivity in those sectors and bring competitive advantages for business while also creating jobs. Such effects could have a multiplier effect with different rounds of impacts as discussed in the literature 133 .

6.2.Societal impact

The examples of societal benefits from Gigabit broadband are numerous and include home care applications, greater educational opportunities, support for teleworking and improved entertainment options, as well as boosting consumer welfare. In a recent study in the UK assessing the impact of superfast broadband on wellbeing, Simetrica-Jacobs found that having access to superfast broadband was associated with an increase in wellbeing worth around £225 (equivalent to around EUR260) per household per year. 134 Although in this study, superfast broadband was defined as having a download speed of only 24Mbit/s, other research confirms that services which require higher bandwidths could provide equal (or even greater) contributions to consumer welfare and play an important role in reducing inequalities.Inadequate broadband connectivity is likely to be particularly accentuated in rural areas, because the cost of deployment is significantly higher. The effects of inadequate connectivity (amongst other factors) may have been amongst the drivers of rural unemployment and depopulation. Various studies suggest that improved broadband connectivity in rural areas could help to reverse the trend of depopulation of rural areas and ensure more equitable distribution of economic benefits. There is a wide range of literature that suggests that rural communities that would otherwise suffer from depopulation and unemployment benefit disproportionately from the deployment of Gigabit infrastructure, as it supports rural job creation and offers the potential for remote households to benefit from remotely delivered services including education and healthcare. According to the latest World Social Report published by the UN in May 2021, improved Internet access and connectivity will provide better jobs and higher standards of living for the roughly 3.4 billion people living in rural areas. 135  

Faster broadband can also support more efficient delivery of healthcare in rural areas (as well as elsewhere). A study assessing developments in Sweden 136 found significant savings in using digital FTTH-based homecare especially in rural areas. It concluded that even with limited adoption, these solutions could contribute to annual net cost reductions of $0.6m in a rural municipality with 8,000 residents by 2020. In another study, examining the effects of ultrafast broadband deployed in the rural country of Cornwall in the UK, Garner et al. (2019) 137 found, that eHealth readiness improved over 18 months from 4.36 out of 10 to 4.59 out of 10. The authors concluded that one of the reasons for improved readiness for the adoption of eHealth services was the rollout of ultra-fast broadband, which increased both peoples personal ability to use eHealth and their methods of access.

One important function of Gigabit broadband, which has received increased attention following the COVID-19 pandemic, is the ability to support remote working. Teleworking may be associated with many benefits for employees, such as increased job satisfaction, organizational commitment, and job performance and lower work stress and exhaustion. 138 A quantitative model estimation by SQW (2013) 139 of the projected social impacts of faster broadband speeds (although not FTTH per se) shows that the increase in teleworking driven by faster broadband would save about 60 million hours of leisure time per annum in the UK by 2024. In addition, by avoiding commuting costs, the additional teleworking enabled by faster broadband would lead to total household savings rising to £270 million p.a. by 2024, and would result in lower pollution. Furthermore, SQW projected that increased productivity from teleworking could reach £1.8 billion by 2024. However, Samek Lodovici et al. (2021) note on a societal level that teleworking may contribute to the emergence of new employment and social inequalities, between those who can telework and those who cannot, because they are employed in non–teleworkable sectors/occupations 140 or have no access to a broadband connection. 141 Thus, the absence of a suitable connection to support teleworking (and the failure to digitize in sectors which could take advantage of remote working opportunities) could have detrimental effects on equality and societal cohesion.

The COVID-19 pandemic has also highlighted the importance of ultrafast connectivity for education, 142 confirming the need not only to ensure high performance connectivity for students but also for schools and higher education institutions themselves. 143 A recent report from the Broadband Commission as well as a White Paper by Hyperoptic 144 illustrate, on the basis of various case studies, the overall benefits education and school connectivity can bring to society. 145  

Moreover, many of the existing studies focus on the effects of FTTH or higher speed fixed broadband infrastructure, because applications for these technologies are already well-developed, but it should be noted that, due to its additional capacity as well as quality characteristics 5G could support the development and use of new types of innovative content, applications and services which contribute to societal welfare including improvements in transport (both private and public) and smart city applications. 146

As regards the implications for the initiative, the societal impact of the different policy options for the revision of the BCRD is intrinsically linked to their capability to accelerate and expand fixed and mobile VHCN deployment. As policy options 3 and 4 have been shown to have the greatest potential in this area (see previous section), we can also conclude that these policy options would provide the greatest contribution to wider societal benefits including reductions in the urban-rural digital divide, and improved access to digital healthcare and remote education or teleworking solutions. Policy option 2 would provide only moderate benefits and policy option 1 only limited benefits, linked to their expected effect in terms of VHCN deployment. Importantly, pursuing policy options 3 or 4 would also provide monetary savings for governments engaged in subsidizing broadband deployment of around EUR 2.4bln, which could potentially be used either to invest in more rural coverage (through FWA or FTTH) or to directly invest in public services.

In addition, policy options 3 and 4 would contribute to the increased re-use of existing infrastructure and co-ordination of civil works, which would limit roadworks and construction, which can itself be a source of social cost to nearby residents. 147 In fact, according to the cost and viability model of the support study, policy options 3 and 4 would more than double re-use of existing infrastructure and civil works co-ordination, reducing the amount of new (greenfield) deployed networks from 530,000km under the baseline scenario to around 250,000km.

In conclusion, policy options 3 and 4 would give rise to the largest societal benefits, both directly by avoiding around 280,000 km of new civil works and indirectly – by supporting the expansion of fixed and mobile VHCN to reduce the urban rural digital divide or by releasing around EUR2.4bln funds that would otherwise have been used for broadband subsidies for other potential social or economic purposes.

6.3.Environmental impact

Digital connectivity infrastructure is essential for achieving the twin digital and green transition, which are main priorities for the Commission. In 2019, the European Commission adopted a Communication on the European Green Deal, which sets out a target for the EU to achieve climate neutrality by 2050. The Commission has also proposed an interim target to reduce greenhouse gas (GHG) emissions by at least 55% by 2030 compared with 1990 148 . Digital technologies will play a key role in the transition to a green economy, as they are important enablers of energy efficiency in other sectors 149 .

In this section, the modelling is considering the potential effects of revisions to the BCRD on emissions associated with both the deployment and operation of VHCN, which are considered in the modelling exercise (see Annexes 5 and 6 for more information) 150 . The assessment of the environmental impact in terms of greenhouse gas emissions of three distinct factors is provided below: fixed network operation, fixed network deployment (most significant impact) and wireless, including mobile, network operation 151 .

The modelling developed in the support study has assessed total electricity consumption of the access network based on number of total subscribers over time across the different policy options. This implicitly accounts for the increase in data consumption that is expected across all policy options and in particular policy options 3 and 4. Electricity consumption estimates were based on Oberman (2020), Godlovitch et al. (2020) and JRC’s Code of Conduct on Energy Consumption of Broadband Equipment (EC JRC, 2020). Assessing the GHG emissions from the electricity, the support study considers the electricity grid mix emissions based on Buck, et al., (2019).

The results for fixed broadband operation are summarized in the table below, which shows that in the baseline scenario, aggregate emissions across the 2020-2030 period is 23.98 million tonnes CO2e. All policy options lead to reductions in emissions with a maximum reduction of 240,300 tonnes CO2e in policy option 3. Comparatively, however, this is only a 1% reduction compared to the status quo. The main driver of reduction in emissions is the shift in subscribers from the less energy efficient technologies (ADSL, FTTC/VDSL and cable) towards the more energy-efficient FTTH. The results of the modelling exercise show that policy options involving higher increases in FTTH deployment (namely options 3 and 4) result in lower overall emissions, as the efficiency gains compensate for the effect of data consumption increases. The results are presented in the following table.

Table 7: Emissions from operation of fixed broadband networks 2023-2030

Source: support study

The deployment of electronic communications networks also results in GHG emissions (and other environmental impacts) although likely a lower proportion of the total impact of ECN on GHG emissions than network operation. 152 Accessing existing physical infrastructure (as an alternative to deployment of new physical infrastructure) therefore provides an opportunity not only to reduce costs but also to avoid a large amount of the environmental impact that otherwise would have been associated with creation and deployment of new infrastructure.

The results for fixed broadband deployment are summarized in the following table which shows that in the baseline aggregate emissions for deployment across the 2020-2030 period is 13.7 million tonnes CO2e. All policy options lead to increases in emissions up to 1.1 million tonnes for policy options 3 and 4. This represents over 8% increase compared to the baseline.

Table 8: Emissions from deployment of fixed broadband networks 2020-2030

Source: Support study

The results across all policy options are driven by additional new deployment needed to achieve higher FTTH coverage, e.g. 7% increase in new ducts for policy option 3. So despite all options having a higher proportion (and absolute length) of deployment in existing ducts and poles, this is outweighed by the simultaneous need for new ducts and poles linked to increased coverage.

While in the case of fixed/mobile network operations the difference of emissions compared to the baseline is positive (i.e. a reduction of emissions); in the case of fixed network deployment, it is on the contrary negative (an increase of emissions, which for policy options of 3 and 4 represents 8% increase compared to the baseline – see table 5). This is due to the expected additional km of VHCN networks (see results of step 2 of the model), with policy options 3 and 4 leading to the highest additional deployment of networks, as well as to the highest environmental impact related to fixed network deployment. The assessment shows that all policy options are leading towards a higher proportion of network deployment based on existing ducts and poles. However, it is to be noted that this positive result is outweighed by the simultaneous need for new ducts and poles linked to the increased coverage which also results (to various extent) under the different policy options (e.g. as a result of the application of the envisaged measures, the VHCN networks coverage is expected to increase and therefore requires deployment of new ducts and poles in addition to the use of the measures under the initiative and therefore there is an associated environmental impact related to fixed network deployment).

In order to be able to identify the benefits brought by this initiative, the model does a further step and calculates what would have been the emissions derived from fixed network deployment for all the policy options, in case the deployment had been done in the same proportions of new and existing ducts/poles and civil works coordination as in the baseline (e.g. not taking into account the measures envisaged in the policy options). The results are summarised in table 6 below, which shows the benefits brought in terms of avoided emissions by the envisaged measures under the different policy options for the same amount of fixed network deployment. This exercise leads to avoided emissions of up to 0.86 million tonnes CO2e in policy option 4 and 0.70 million tonnes CO2e in policy option 3, while the amount is less for policy options 1 (0.11 million tonnes of CO2e) and 2 (0.13 million tonnes of CO2e). 153  

These results put into value that, despite the net increase on GHG emissions derived from the fixed network deployment, the foreseen measures contribute to lowering the emissions. It also confirms that accessing existing physical infrastructure (as an alternative to deployment of new physical infrastructure – greenfield approach) and coordinating civil works provide an opportunity not only to reduce costs but also to avoid a large amount of the environmental impact that otherwise would have been associated with the creation and deployment of new infrastructure in case such additional infrastructure is deployed in the absence of new measures under the BCRD.

Table 9: Emissions from deployment of fixed broadband networks 2020-2030 with proportion of deployment technique as Status Quo

Source: Support study

Upgrading mobile networks presents an opportunity in the ability to increase bitrates and connectivity, but equally presents challenges as total energy consumption may increase as legacy systems remain in place (Sabelle, et al., 2016). Even if traffic moves away from legacy mobile networks, 2G and 3G, in favour of 5G their energy consumption would remain. As suggested by JRC’s Code of Conduct on Energy Consumption of Broadband Equipment (EC JRC, 2020) nearly 70% of the power busy-hour-load-state consumption is used in the low-load state. Switching off these systems could therefore lead to an overall reduction in energy consumption. This is confirmed in an article by McKinsey where they identify a number of tools to help reduce energy consumption. Here they identify shut down of legacy systems (2G) could lead to energy savings of 3% (Lee, et al., 2020).

The modelling has assessed total energy consumption of the access network and the results are summarized in the following table on emissions from mobile broadband network operation 154 . This shows that in the baseline (policy option 0), aggregate emissions across the 2023-2030 period is 4.01 million tonnes CO2e. All policy options lead to reductions in emissions with a maximum reduction of 1,121 tonnes CO2e in policy options 3 and 4. Comparatively, however, these are insignificant reductions of less than 0.1% compared to the baseline. The main driver of reduced emissions is the increased energy efficiency of 5G. However, increased energy efficiency is counterbalanced by expectations of significant increases in data consumption linked to the deployment of 5G networks (and in particular mid-band 5G).

Table 10: Emissions from operation of mobile broadband networks 2023-2030

Source: Support study

6.4.Conclusions

On the basis of what is presented in the previous sections, the following table provides an overview of the macroeconomic, societal and environmental impacts that are expected to result from the different policy options and which are analysed and compared in detail in section 7. Only scenario A (savings are reinvested in additional FTTH coverage beyond the base case) is depicted here, as it appears to have a greater GDP impact.

Table 11: Summary of macro-economic, societal and environmental impact

Source: support study

The symbol ‘(+)’ indicates positive but limited benefits, ‘+’ moderate benefits and ‘++’ high benefits.

Finally, in relation to the so-called “do not harm principle”, no significant negative impact on the environment has been identified. No significant harm is expected to be done to the climate and environmental objectives of the European Green Deal by the application of the envisaged measures under the policy options considered for this initiative. On the contrary, the underlying goal of the revised measures (to encourage sharing of physical infrastructure and coordinated network deployment which should boost the deployment of FTTH and full 5G, as well as the digitalisation of access to relevant information and permit granting procedures) is consistent with improved energy efficiency as well as limiting nuisance and other negative environmental effects associated with civil works. The Impact Assessment also notes that digital connectivity infrastructure would help other sectors to become ‘greener’ and therefore is essential for achieving the twin digital and green transition, which are main priorities for the Commission.

7.How do the options compare?

7.1.Comparison based on economic, societal and environmental impact

As regards the economic impact, if the cost savings from increased infrastructure re-use and streamlined processes are reinvested in FTTH, we anticipate an increase to GDP of EUR76-EUR80bln in the period up to 2030 if policy option 3 or 4 are implemented while these figures drop to EUR17bln and EUR41bln if policy options 1 and 2 are implemented. In addition, measures which accelerate the deployment of mid-band 5G are expected to contribute around EUR29bln to economic growth under policy options 3 and 4, policy options 1 and 2 providing relatively for EUR4bln and EUR15bln. The additional bandwidths and reach of the fibre network under those policy options could contribute to the creation of around 627,000-656,000 jobs 157 EU-wide, policy options 1 and 2 providing relatively for 154,000 and 338,000. In addition, a further significant boost to economic growth could result from the boost to digitisation of other industries (including energy, transport, manufacturing, etc.) that will be facilitated by 5G IoT under these policy options, but the precise impacts are difficult to quantify.

As regards the societal impact, by enabling a wider section of society to benefit from Gigabit broadband, policy options 3 and 4 are also likely to have positive societal impacts, in particular by reducing the urban-rural digital divide; while policy option 2 is expected to provide certain positive impact and policy option 1 more limited positive effect. As the COVID pandemic has shown, advanced connectivity is overall particularly important as an essential enabler for teleworking, remote education or health. In addition, reductions in civil works that could be enabled through greater re-use of existing infrastructure should reduce disruption and noise pollution from civil works, which can be viewed as a social cost.

As regards the environmental impact, the reviewed BCRD, which will further support the re-use of existing facilities or the co-ordination of civil works and update its scope to support VHCN deployment, should also have positive effects on greenhouse gas emissions, by fostering the deployment of technologies (FTTH and 5G) which are more energy efficient during the operational phase. We estimate 158 that the reductions in greenfield deployments that may result from policy options 3 and 4 could avoid 0.7 and 0.8 million tonnes in GHG emissions respectively and 0.1 million tonnes both for policy options 1 and 2 in the period to 2030 compared with a situation where FTTH is deployed to the same extent, but based on the current more limited reliance on infrastructure sharing.

The migration to more energy efficient FTTH and 5G technologies should also help to limit the increases in GHG emissions that would otherwise arise as a result on increasing demands for bandwidth. If coupled with the phase-out of legacy technologies over the next 10 years, we anticipate that the increased FTTH coverage resulting from policy options 3 and 4 should lead to reductions of around 1% in GHG emissions compared with the status quo in the period up to 2030 and around 0.03% savings in emissions from the operation of mobile networks; the respective figures for policy option 1 being 0.36% and 0.01% and for policy option 2 0.76% and 0%. Importantly, if policy options 3 or 4 are pursued, emissions are not expected to increase compared with the status quo, despite projections 159 that bandwidth consumption would increase 9-fold in fixed networks and 19-fold for mobile by 2030. We did not take into account knock-on effects that could arise from improved energy efficiency due to the accelerated deployment of 5G and its use in sectors such as transport, agriculture and energy. Literature suggests that these could significantly outweigh any direct impacts on GHG emissions coming from electronic communications networks themselves. 160

To conclude from the assessment done so far on the basis of the modelling, policy options 3 and 4 are likely to have the most significant positive impacts for economic and societal development as well as in limiting GHG emissions from the electronic communications sector during a period where bandwidth consumption is expected to expand rapidly. Instead, when taking into account the more granular assessment on the basis of specific criteria of effectiveness, efficiency, coherence, feasibility and EU added value provided in the next section, policy option 3 appears as the preferred option.

7.2.Comparison of policy options per criteria

In line with the Better Regulation Guidelines, we have carried out a detailed analysis of the elements which compose each policy option, allowing for a comparison. The support study has quantified to the extent possible and rated the potential impacts of the baseline scenario and the four policy options considered.

The main factors considered for the assessment of the four policy options, which are described in section 5.2) are summarised below.

Effectiveness

Baseline: While the existing BCRD in combination with the Connectivity Toolbox and Article 57 EECC would enable certain improvements in reducing costs in broadband deployment, the application of these measures is unlikely on its own to deliver the cost reductions and easing of the administrative burden that is required to timely meet the EU connectivity targets. Identified inefficiencies of the current Directive will therefore persist and fragmented application is likely to remain. Permit granting processes may improve somewhat, but outcomes will remain patchy. Use of infrastructure sharing and coordinated civil works would improve to a certain extent but most VHCN deployment would be greenfield. As shown in table 2, we expect that under the status quo, there will be 250,000km of deployment by 2030 based on BCRD measures and VHCN coverage in the EU will reach around 65% by 2025 and 90% by 2030, due to national broadband plans adopted in connection with the EU Gigabit society targets and forthcoming adaptations to the Toolbox Roadmaps together with the allocation of significant amounts of State Aid and EU funds. As regards the deployment of mid-band 5G (based on 3.6 GHz band), it is expected that 75% of the population would be covered by 2030.

Policy option 1: The amendments foreseen will have limited positive effects and their impact on fixed (and especially mobile) VHCN deployment is likely to be limited as shown in table 2. Policy option 1 would increase network deployment by 290,000 km based on the use of cost-saving measures including re-use of existing infrastructure and civil works co-ordination. This policy option could lead to cost reductions in FTTH deployment of around EUR5bln and create the potential for a reduction in subsidies by around EUR0.43bln. If the costs saved are reinvested in additional FTTH deployment, the model indicates that FTTH coverage could be extended to reach 91.6%. If saved costs are invested instead in deploying the lower cost solution 5G FWA, VHCN coverage levels of 99% could be achieved. Coverage of mid-band 5G is expected to reach 75% under this option, thereby achieving limited additional coverage compared with the baseline.

As regards reducing costs through more consistent, streamlined and digitised administrative procedures required for network deployment, only a limited effect is expected derived from (only) mandating that permit applications are submitted by electronic means. At the same time, such a measure would be in line with the principle of digital by default and therefore constitute an improvement compared to the baseline.

Policy option 2: By addressing the problem of unviable overbuild through VHCN exemption, this option would improve the business case for VHCN deployment in less dense areas (thereby substantially contributing to reducing requirements for subsidies). However, it also risks limiting the potential for infrastructure competition in more urban areas, which could limit quality and choice for consumers overall. A more targeted exemption (e.g. in white areas as defined for state aid or by way of Art.22 geographical surveys) would not be easy to implement as experience has shown that definition of these areas is difficult and constantly evolving and will rely on alternatives mappings under state aid or article 22 being timely available and up to date. This policy option would contribute to reduce the costs and administrative burden of deploying VHCN, in particular for mobile deployment thanks to the extension of obligations to access existing physical infrastructure to cover also non-network infrastructure owned by public bodies for the purposes of VHCN deployment. According to operators favouring transparency on non-network assets, it was considered that this measure would have a moderate to significant impact on their ability to make use of non-network PIA. As regards consistent, streamlined and digitised administrative procedures, this policy option would broadly bring the same limited effects as policy option 1. Improvements regarding permit granting procedures would also likely be effective to some extent in reducing the timeframes to obtain permits, but would not address the problems associated with the variety of different authorities, rules and procedures.

Policy option 2 would increase network deployment to around 300,000 km based on the use of cost-saving measures including re-use of existing infrastructure and civil works co-ordination. It could lead to certain decline in infrastructure competition due to measures which would limit unviable overbuild. However, this carries a benefit in terms of additional subscribers and moreover the improved business case for the ‘first mover’ ECN operator due to the higher market shares in the deployment area coupled with cost-saving measures under this option (cost reductions of EUR1.6bln)could reduce the need for subsidies by around EUR1.6bln compared with the status quo. If the costs saved are reinvested in additional FTTH deployment, the model indicates that FTTH coverage could be extended to reach 93.5%. If saved costs are invested instead in deploying the lower cost solution 5G FWA, VHCN coverage levels of 98% could be achieved. This policy option is likely to contribute to the acceleration in the deployment of mid-band 5G, potentially contributing to additional coverage of 2% compared with the status quo, due to provisions on access to non-network infrastructure and associated information. Coverage of mid-band 5G is expected to reach 76.5% under Option 2.

Policy option 3: This policy option will be the most effective in reducing costs for fixed and mobile VHCN deployment as well as the related administrative burdens. In addition to supporting the deployment of small cells (not limited to SAWAPs) and other wireless infrastructure through the expansion of obligations to access existing physical infrastructure to non-network elements, the development of EU-level guidance is likely to address key challenges regarding access to physical infrastructure and civil works co-ordination, including pricing, thereby further incentivising them while preserving the business case for VHCN deployment (providing for a case by case approach to addressing the issue of unviable overbuild). This policy option contains a number of measures which would make the provisions of the revised legal instrument more effective, such as the reinforcement of information obligations including the setting of digitised platforms, and the introduction of standards at national level and mandating FTTH in-building wiring in new and majorly renovated buildings.

As regards consistent, streamlined and digitised administrative procedures, a higher impact is expected from this policy option due to the fact that SIPs should be fully digitised (and interconnected where possible) and a digital permit platform should also be established (‘digital by default’ principle). Moreover, this policy option also introduces measures such as the EU-level defined exemptions for permits and the setting and use of advanced digital platforms for permit granting, the streamlining of procedures and authorities involved, and tacit approval which are expected to be instrumental to improve enforcement against permits timeframes, thereby significantly streamlining permit granting procedures overall.

Policy option 3 would increase network deployment to around 470,000 km, based on the use of cost-saving measures including re-use of existing infrastructure and civil works co-ordination. Moreover, the increased take-up of cost-saving measures such as re-use of existing infrastructure and co-ordination of civil works would counter-act the cost increasing effects of connecting more households, resulting in a reduction in the total cost of achieving a 90% coverage rate for FTTH of around EUR15bln and a reduction in required subsidies of EUR2.4bln compared with the status quo. If the costs saved are reinvested in additional FTTH deployment, the model indicates that FTTH coverage could be extended to reach 96.5%. If saved costs are invested instead in deploying the lower cost solution 5G FWA, VHCN coverage levels of 99% could be achieved. This policy option could enable an increase in coverage of mid-band 5G to around 77% of the population by 2030 compared with 75% in the status quo.

Policy option 4: This policy option provides the potential for a high degree of cost savings in VHCN deployment for ECN operators. However, by widening the scope of obligations on private network operators and applying a maximum degree of harmonisation, it risks applying obligations in certain cases where they may not be necessary to achieve positive outcomes, and creating delays in cases where there are existing well-functioning national processes, standards or separate platforms that would need to be transformed to meet new EU-level requirements. These shortcomings may mean that policy option 4 may at best fail to improve on the cost and time saving which can be achieved under policy option 3, while at worst it could introduce delays in the adaptation of permit granting systems and the implementation of in-building standards which undermine the achievement of positive outcomes. As regards streamlining and digitising administrative procedures, a slightly higher impact than policy option 3 is expected due to the fact that SIPs for existing physical infrastructure and civil works should be consolidated with the digital permit platform (‘digital by default’ principle).

Policy option 4 would increase network deployment to nearly 530,000 km based on more than double use of cost-saving measures including re-use of existing infrastructure and civil works co-ordination. This option could add further cost savings (EUR17.5bln) and reductions in subsidies (EUR2.6bln) although the extent of these savings is not significantly greater than those that can be achieved under policy option 3. If the costs saved are reinvested in additional FTTH deployment, the model indicates that FTTH coverage could be extended to reach 96.8%. If saved costs are invested instead in deploying the lower cost solution 5G FWA, VHCN coverage levels of 99% could be achieved. This policy option could enable an increase in coverage of mid-band 5G to around 77% of the population by 2030.

Efficiency 161

Baseline: The total recurring administrative costs associated with processing permits, processing physical infrastructure access requests and civil works co-ordination (with or without dispute resolution) and for providing information – are approximately EUR275m per annum, and could rise to around EUR315m in connection with the deployment of a significant number of small cells, which could increase both access-related administrative costs and costs relating to permits (for those deployments not falling within the SAWAPs permit exemption). The higher proportion of these recurrent costs are by far supported by ECN operators (EUR 201.3m), followed by other network operators (EUR 50.3m), local authorities (EUR 50.9m), authorities managing SIPs and dispute resolution processes (EUR 9.36m) and construction companies (EUR 2m).

The costs directly linked with the implementation of the BCRD are costs associated with DSB and SIP management. Other costs would likely have been incurred at higher levels in the absence of the BCRD, if operators sought access to physical infrastructure or civil works co-ordination in the absence of any support from BCRD rules, or ECN operators may have avoided making requests for access or civil works co-ordination, leading to significantly higher construction costs. These cost estimations provide a rough benchmark against which we compare administrative costs associated with proposed changes to the BCRD.

Policy option 1: It is associated with very limited (direct) costs but also limited benefits in terms of reduced deployment costs and improved administrative processes for VHCN, given the limited changes foreseen. Provisions such as a mandatory SIP and electronic processing of permits are in line with eGovernment initiatives and will give rise to wider benefits to public authorities, which save on administrative costs in the medium term. Yet this option would give rise to cost-savings in VHCN deployment which could amount to as much as EUR5bln EU-wide.

Policy option 2: The benefits of this policy option are on balance likely to outweigh the costs, because the expenses associated with implementing some of the foreseen changes will contribute to longer term cost savings and support the digitisation of public services. Specifically, this policy option could give rise to cost savings of around EUR2bln compared with the status quo in achieving FTTH deployment to reach 90% of households, and substantially reduce the required subsidies (by EUR1.5bln) in part because exclusion of VHCN-hosting assets from obligations could improve the business case for VHCN deployment in the most remote areas including those in receipt of public funding.

Policy option 3: This policy option brings significant benefits in reducing costs for VHCN deployment alongside its potential to reduce administrative complexity and associated costs at least in the medium term. As a result, the benefits of this policy option appear to significantly outweigh the costs, which in the short term are roughly estimated at around EUR70m for all stakeholders 162 , with public authorities supporting the highest proportion (approx. EUR 35-40m one-off for local authorities in relation mainly to permit granting procedures and digitised permit platforms 163 , and EUR 10-15m one-off and EUR 6-7m recurrent for DSB/SIPs). 164 It is expected that ECN operators might incur around EUR 15m of set-up costs in connection with their input into permit granting systems and SIPs (alongside associated changes to internal processes and data gathering methods) as well as their participation in the development of standards for in-building infrastructure and EU-level guidance. Other non-ECN network operators may also have set-up costs of around EUR 5-7m relating to new requirements in a few countries to submit information directly to the SIP and their input into the development of guidance on access to physical infrastructure and civil works co-ordination. Moreover, representatives of construction companies may incur costs of around EUR 1-2m providing input to the development of standards for in-building infrastructure including fibre, in those countries where such standards are not yet in place.

The various measures in the area of permit granting which are meant to streamlined these procedures are expected to provide for EUR 15m per annum cost savings in terms of administrative simplification for ECN operators. Moreover, building companies would benefit from standards on in-building infrastructure and wiring which should guarantee a more efficient FTTH pre-equipment of new and majorly renovated buildings (no estimate). This policy option also foresees the establishment of certain guidance/standards at national (in-building infrastructure) and EU (access to in-building infrastructure, some criteria for access to existing physical infrastructure and civil works coordination) level, which should facilitate the implementation of relevant provisions as well as the resolution of potential disputes resulting in cost savings for ECN operators of EUR 24 m per annum. 165

Policy option 4: It involves a number of provisions that would increase administrative costs in particular for privately financed network operators and policy-makers at EU level. The new provisions on permit granting and in-building wiring and infrastructure could provide important benefits in theory to ECN operators, and in particular operators operating cross-border that would benefit from fully harmonised conditions. However, these benefits are likely to be achievable only following a lengthy period of implementation including process re-engineering and the revision of existing standards. Thus, benefits in terms of accelerated deployment would be unlikely to be realised in the medium term and the transformation would involve significant cost. There could be some benefits to expanding access obligations to private non-network facilities and extending transparency and notification obligations to privately financed operators because they would increase the potential access and civil works coordination opportunities. However, the incremental advantages are likely to be limited in view of the preference by ECN operators to obtain access to public non-network facilities and to use solutions other than civil works co-ordination where available (such as access to network and public non-network assets under BCRD or SMP access to physical infrastructure), while the additional cost is high (the total cost of preparing the EU level provisions on in-building infrastructure might amount to around EUR 5.2m over the length of the process 166 ). In conclusion, the costs associated with policy option 4 are likely to exceed the benefits, this option being associated with significantly high implementation costs.

Coherence: The main elements to consider as regards coherence are (i) the alignment with other initiatives and legal instruments at EU level (external coherence), in particular the EECC, the Digital Compass Communication and the proposal for a Digital Decade Policy Programme 167 , and (ii) the alignment within the grounds to reject requests for access to existing physical infrastructure and for coordination of civil works (internal coherence).

Maintaining the current BCRD without amendment would not be coherent with the EU’s more ambitious Gigabit objectives (external coherence) and also risks perpetuating a potential (internal) incoherence (or lack of clarity) within the revised legal instrument concerning the potential grounds to reject requests respectively for access to physical infrastructure and civil works co-ordination. All policy options would ensure the coherence of the revised legal instrument with the renewed connectivity ambition of the EECC and the more recent Digital Decade Communication and policy programme, while policy options 2, 3 and 4 would also address the potential incoherence within the current Directive regarding the grounds to reject requests for access to physical infrastructure and for civil works co-ordination by way of VHCN exemption (policy option 2) or by defining specific circumstances for rejection (policy options 3 and 4). Policy options 2, 3 and 4, would further reinforce the coherent application of the EECC and BCRD in the treatment of access to non-network facilities and the processing of rights of way, while policy options 3 and 4 would also ensure coherence in the application of access obligations to physical infrastructure under SMP and BCRD provisions, and the handling of in-building wiring and associated obligations for access to wiring and physical infrastructure in buildings.

EU added value: Policy option 1 would maintain a significant degree of flexibility for Member States in the application of rules to reduce the cost of deploying broadband infrastructure, but would add limited value compared with the status quo, which has proven ineffective in particular in tackling the complexities and regional fragmentation involved in obtaining permits and access rights for networks deployments. Policy option 2 achieves some added value but would not fully tackle the problem of fragmented systems and rules (for ex. regarding terms and conditions for access to physical infrastructure and civil works coordination or permits which will continue to be defined at national or regional level). Policy option 3 achieves the highest degree of added value compared with Member States acting alone in particular because it secures harmonisation in areas which are vital for the rapid deployment of fixed and mobile VHCN EU-wide (including access to sites for 5G deployment, the removal of barriers created by fragmentation in the permit granting process and the deployment of FTTH in-building) while maintaining flexibility for Member States in areas which are best addressed at national level, including in particular for the definition of standards for in-building infrastructure or the decision of whether or not to extend certain obligations to privately financed operators. And policy option 4 although in theory seems to provide for high EU added value, it may raise difficulties as it would involve decisions being made at EU-level (in particular regarding EU standards for in-building infrastructure, and extension of certain obligations to private network operators), undermining Member State’s ability to take timely action which reflects the situation on the ground.

Legal/political feasibility

Baseline: As a continuation policy option, it is highly feasible. Member States and their public administrations are expected to support this policy option, relying on the continuation of the implementation of the Directive, which provides for minimum harmonisation, and the voluntary improvements under the Connectivity Toolbox. On the contrary, ECN operators are calling to strengthen and use to the maximum the potential of the Directive at a time where they are facing pressure to increase VHCN investment. Overall, political feasibility at EU level is doubtful as the EU has committed to reach ambitious Digital Decade connectivity targets by 2030 and the costs of deploying the underlying physical infrastructure remains very high.

Policy option 1: This policy option based on minimum revisions is likely to be supported by Member States and public administrations, except possibly some local authorities (for example, those not advanced on electronic procedures for permit granting) as some of the currently voluntary provisions on permit granting procedures are turned mandatory. ECN operators are expected to consider it too thin on the basis of the problems reported as regards VHCN deployment. If this policy option is pursued, we cannot expect a significant contribution of this initiative for reducing the costs of VHCN deployments and therefore reaching the 2030 Digital Decade connectivity targets.

Policy option 2: Some ECN operators are expected to support this policy option, as some of them (and their associations) have suggested the possibility to limit the scope of the revised legal instrument’s obligations to only other (non-telco) network operators (although some incumbents are at the same time advocating for the relief of SMP obligations in favour of the more horizontal BCRD provisions), but they are likely to consider that it falls short on some aspects related to transparency, permit granting or in-building. Non-telco network operators (utilities, transport) would not favour it as the new regime would rely mainly on their physical infrastructure/civil works, and the addition of non-network public assets. National authorities in charge of implementing the new provisions could raise questions as to how to delineate the newly defined scope based on what would be considered (or not) VHCN deployment, this could raise some feasibility issues. Public authorities may complain of the burden to implement the new access/transparency measures for non-network public assets suitable for VHCN deployment (though there is already a precedent in Art. 57 EECC) and of a shift of obligations mainly on public authorities/operators rather than on private ones. The optional measure of establishing a coordinating body for access requests to public physical infrastructure may to a certain extent alleviate this concern.

Policy option 3: This policy option provides for a more balanced approach of obligations on public authorities and private network operators and tackles the most important bottlenecks identified, so we expect that this will be much supported by ECN operators. Public authorities would most probably consider this policy option going beyond what is necessary or proportional (e.g. in terms of EU harmonisation) and too costly and burdensome and will instead favour status quo or policy option 1. They would possibly complain about the access/transparency obligations on public assets, which is however critical for improving the effectiveness of provisions on access to physical infrastructure and coordination of civil works. Guidance on different elements related to access and civil works coordination would most probably be welcomed by all parties (operators and public administrations) as they would contribute to fewer disputes overall and swifter access and coordination (although public authorities and BEREC/NRAs are of the view that Member States are best placed to develop such guidance). The full set of measures proposed in the area of permit granting is expected to be resisted by local authorities –although their competence to deliver permits would remain untouched- while very much supported by telecoms operators as addressing the major deployment bottleneck. In the context of the Connectivity Toolbox, a couple of Member States have reported that tacit approval could raise constitutional concerns in their countries, for which exceptions could be considered. Finally, it might be possible to finance the implementation of some of the proposed measures (such as the one on digitised platforms) through post COVID EU recovery funds. Overall, considering some concrete elements introduced to ensure proportionality (for example as regards categories of public building/assets subject to access obligations, transparency measures and tacit approval), this policy option is considered as highly feasible both in legal and political terms.

Policy option 4: The extension of obligations for access to private non-network physical infrastructure should be done in careful compliance with property law and, in this regard, policy option 4 could be considered as going beyond what is needed to address the identified problems, in particular as most ECN operators were calling for being able to access non-network public assets (in addition to existing network elements) but seemed comfortable with relying on commercial negotiations for other types of assets. The extension of the civil works coordination to all privately and publicly funded projects would be opposed by network operators, which could argue the measure could unnecessarily delay their planned deployments. The consolidation of the SIPs on physical infrastructure, planned civil works, and possibly also permit granting into a single consolidated national digital platform could theoretically be useful for a more efficient implementation of the measure under the new instrument (and welcomed by telecoms operators), but it could also entail significant costs for administrations and difficulties for a timely implementation; it could meet some resistance as it may be necessary to change existing digital platforms. It might be possible though to finance the implementation of some of the proposed measures (such as the one on digitised platforms) through post COVID EU recovery funds. Finally, the EU standards for in-building infrastructure could face difficulties/delays in definition and implementation as building practices might widely differ from one Member States to the other, might not provide results in the short term. This policy option is therefore likely to be opposed both by private entities (holding private non-network assets) and public authorities, which would be politically difficult to support as possibly perceived too far reaching in terms of new obligations and EU harmonisation.

The quantitative/qualitative analysis presented in more detail above is summarised in the following table showing the main conclusions in terms of impacts per criteria:

Table 12: Comparison of policy options – overview

Source: European Commission based on support study

The symbols ‘+’/‘-’ indicate limited positive/negative impact compared to the baseline, symbols ‘++’/‘--’ indicate moderate positive/negative impact and symbols ‘+++’/‘---’ indicate high positive/negative impact.

8.Preferred option

8.1.Outcome of comparison of policy options

Based on the assessment provided in section 7, the outcome of the comparison of the policy options points to policy option 3 as the preferred option and results as follows:

As described in section 7.1, when looking at the socioeconomic and environmental impact, policy options 3 and 4 are likely to have the most significant positive impacts for economic and societal development as well as in limiting GHG emissions from the electronic communications sector. In particular, policy option 3 is expected to bring EUR109bln of increase of GDP up to 2030 linked to the reinvestment of cost savings, is likely to have positive societal impacts in particular by reducing the urban-rural digital divide and could avoid 0.7 million tonnes in GHG emissions in the period to 2030 compared with a situation where FTTH is deployed to the same extent but based on the current more limited reliance on infrastructure sharing and should lead to reductions of around 1% in GHG emissions compared with the status quo in the period up to 2030 and around 0.03% savings in emissions from the operation of mobile networks.

Regarding effectiveness, except for option 4 168 , policy option 3 provides for the greatest impact in terms of new networks deployed by 2030 re-using physical infrastructure and coordinating civil works (470,000 km 169 instead of 250,000 km under baseline, 290,000 km under policy option 1 or 300,000 km under policy option 2) as well as in reducing the cost of FTTH deployment to 90% of households (by EUR 14.5bln instead of EUR 4.8bln under policy option 1 and 1.6bln under policy option 2) and reduced the required public subsidies (by EUR 2.4bln instead of EUR 0.43bln under policy option 1 or EUR 1.6 under policy option 2). If these savings are reinvested in further VHCN deployment, they could contribute to 96.5% coverage of FTTH or 99.1% coverage if 5G FWA rather than FTTH is used to serve the final 10% of households beyond the 90% that are assumed served by FTTH under the status quo (compared with respectively 91.6% (FTTH scenario) and 97% (FWA scenario) under policy option 1, 93.5% (FTTTH scenario) and 98.5% (5G FWA scenario) under policy option 2 and the slightly better results of 96.8% (FTTH scenario) and 99.2% (5G FWA scenario) under policy option 4). We also estimate that policy option 3 could accelerate the deployment of mid-band 5G, by simplifying the process of deploying small cells (including but not limited to SAWAPs as defined in the EECC and associated Implementing Regulation), 170 as well as enabling an increase in coverage of mid-band 5G to around 77% of the population by 2030 (same under policy option 4) compared with 75% in the status quo and policy option 1 (with 76.5% under policy option 2).

Concerning efficiency, policy option 3 involves significant certain short term costs (EUR70m), in particular linked to the establishment of consistent permit granting procedures and the establishment of digital platforms for the processing of permits for ECN deployment. However, once these procedures and platforms are established, policy option 3 is expected to lead to longer term administrative cost savings not only for ECN operators, but also for public authorities including municipalities as indicated in Section 8.2. In addition to providing legal certainty and fostering take-up of cost saving measures by ECN operators, measures under policy option 3 such as the provision of clearer rules in the legislation potentially alongside EU-level guidance on conditions for access to physical infrastructure and to in-building infrastructure, as well as on cost allocation for civil works co-ordination and for grounds for refusal are also expected to reduce the administrative burden on DSBs and authorities co-ordinating the provision of access to non-network public facilities. In addition to providing medium-term administrative cost savings, policy option 3 could also act as a catalyst for digitisation of local Government processes and the adoption of smart city initiatives, which offer the prospect of delivering wider economic and societal benefits. 171

Although policy option 4 could achieve slightly higher cost savings or increase the potential for VHCN compared with policy option 3 in the long run, these benefits are likely to be outweighed by persisting additional administrative and other costs, that would apply to owners of private non-network facilities (including tower companies and commercial building operators) and to private network operators all considered together, which would be affected respectively by the extension of obligations for access to non-network facilities to cover all property owners; and by the extension of civil works co-ordination obligations to cover privately financed deployments. Policy option 4, which foresees the establishment of standards for in-building infrastructure at EU-level, could delay the implementation compared with a national approach and require the revision of existing effective national standards in some countries. Policy options 1 and 2 would require less up-front investment by European, national and local authorities than policy options 3 and 4, because these options do not require the development of standards for in-building wiring nor consistent procedures and digital platforms for permit granting or for SIPs at a national level, but equally, they would not significantly reduce the existing high and persistent administrative burden that ECN operators currently face when planning to deploy VHCN, and could have unintended effects on VHCN investment.

All policy options would ensure that the BCRD is made coherent with wider objectives for Gigabit connectivity and avoid potential overlaps between BCRD obligations on access to physical infrastructure and those based on SMP or State Aid, so in this respect Option 3 is not specific. Instead, policy option 1 would not fully address a problem of internal coherence in the BCRD whereby the business case for VHCN deployments will continue to be taken into account for obligations to access physical infrastructure but not for civil works co-ordination, while other policy options would do. All policy options but option 1 would increase coherence between the BCRD and EECC by elaborating on the Art 57 EECC provisions concerning access to public non-network facilities as well as the provisions in the EECC on rights of way. By including provisions requiring the standardisation of in-building infrastructure including a requirement for the installation of in-building fibre, policy options 3 and 4 would additionally complement existing provisions in the EECC which set out conditions under which access to in-building wiring may be mandated (Article 61 EECC) and thus offer the greatest prospect of coherence between the BCRD and other legal instruments.

Overall, policy option 3 is likely to provide the greatest degree of added value at EU level, while preserving flexibility for Member States on aspects which are best decided locally, such as the development of standards for in-building infrastructure for use by construction firms, or the decision on whether to extend civil works co-ordination obligations to private network operators. Instead, Policy option 1 would provide limited added value beyond the current BCRD, which has been found in the context of the evaluation of the BCRD to be only partially effective in addressing administrative burdens and costs which are hampering VHCN deployment. Policy option 2 would address some concerns, notably regarding access to non-network public facilities, as well as offering some improvements to timeframes for permits and rights of way. However, its added value at EU level would be limited in view of the fact that it does not tackle the fragmentation in regulatory decision-making 172 and permit-granting procedures and the lack of suitable in-building infrastructure and wiring, which have been identified by ECN operators as core barriers to the deployment of VHCN. 173 Conversely, policy option 4 would extend the EU’s remit into areas which are likely to be more efficiently handled at a national level including standards for in-building infrastructure, and would also harmonise regulation at a maximal level (extending obligations for access to non-network infrastructure and civil works co-ordination to private network operators) which may not be proportionate in all circumstances.

Policy option 3 provides also for the higher ranking in terms of legal and political feasibility. This policy option addresses all the different relevant areas with a comprehensive set of measures in all of them. It also considers some limitations in order to ensure proportionality (see for example, the possible limitation to the transparency obligations on network operators and public authorities, on tacit approval for permits to take account of constitutional issues, or the establishment of a body coordinating access request to non-network physical infrastructure). The various elements of this policy option offer a credible solution to the identified problems and persistent bottlenecks and in terms of reducing costs for VHCN deployment in view of the EU 2030 Digital Decade connectivity targets. Overall, this policy option presents a focused policy intervention with an intensity proportional to its objectives. Moreover, it is designed in a way that is future-proofed as for example it does not refer to specific technologies (besides the in-building infrastructure and wiring measures).

To conclude, policy option 3 would provide the optimal combination for effectively reducing costs in deployment of VHCN networks by deployment and re-use of physical infrastructure and through more consistent, streamlined and digitised administrative procedures required for network deployment. It best balances short term implementation costs with medium term benefits, and limits unnecessary regulatory burdens, by ensuring that Member States can take decisions based on national circumstances in areas where this would be most efficient. Therefore, policy option 3 constitutes the preferred option for the revision of the BCRD.

8.2.REFIT (simplification and improved efficiency)

Several measures under policy option 3 are relevant in terms of administrative simplification and improved efficiency, in particular the various measures in the area of permit granting (e.g. tacit approval, ‘one-stop-shop, EU definition of permit exemptions, fees covering admin costs, consistency of permit granting procedures at national level, interim deadlines for considering a completed application) which are meant to streamlined these procedures (EUR15m per annum). Moreover, building companies would benefit from standards on in-building infrastructure and wiring which should guarantee a more efficient FTTH pre-equipment of new and majorly renovated buildings (no estimate).

On the other hand, policy option 3 is adding some new obligations/rules mainly for public authorities (the previously referred measures for permit granting, access to publicly controlled non-network physical infrastructure and related transparency obligations), as well as for network operators (transparency obligations). However, having fully digitised SIPs should also contribute to simplify the compliance with the transparency obligations by all relevant stakeholders (public authorities and network operators). The preferred policy option also foresees the establishment of certain guidelines/standards at national (in-building infrastructure) and EU (access to in-building infrastructure, some criteria for access to existing physical infrastructure and civil works coordination) level, which should facilitate the implementation of relevant provisions as well as the resolution of potential disputes (EUR 24 m per annum).

The most significant quantifiable cost savings associated with the preferred option 3 are shown in the following table, quantitative estimates could not be established for all the various elements of the preferred option as available data was variable or there was no supporting data available. For example, it is expected that local authorities could save time and achieve significant cost savings as a result of the proposed reform and digitisation of permit granting applications as well as the (optional) proposals to co-ordinate access to public facilities for ECN operators. However, the degree of cost savings is difficult to estimate for this stakeholder group, in view of the large number of bodies and variations in current practices. In addition, it should be noted that while they are expected to be directionally accurate, all quantifications should be considered as estimates, 174 and may under or over-estimate the actual savings that result from the measure.  175  Nevertheless, as argued by the Fit for Future Platform, opting for more sustainable forward-looking technologies can also prevent costs that would occur at a later stage when dismantling outdated infrastructure 176 .

Table 13: Potential cost savings associated with the preferred option

Source: support study

8.3.Application of the ‘one in, one out’ approach 

The administrative costs for businesses relevant for the OIOO calculations relate to the new transparency obligations (providing information about existing physical infrastructure and pro-active notification of planned civil works, both georeferenced). They could not at this stage be adequately estimated. The administrative costs related to these obligations are expected to be limited as only few Member States do not have those requirements already in place or some of them plan to implement them in the near future. Moreover, the costs for businesses related to the need to create or adapt interfaces and train personnel to interact with any new digital permit granting systems and digitised information platforms (Single Information Points) were calculated with other non-administrative costs and cannot be isolated.

The expected benefits for businesses due to the administrative savings which could be estimated amount approx. to EUR 40m per annum. The administrative cost savings result from the streamlining of access negotiations and reductions in related disputes (approx. EUR 24m per annum) and from the streamlined permit application processes (approx. EUR 15m per annum). These benefits can possibly be extended to other sectors (beyond electronic communications) in case the permit platforms are implemented and used also by these sectors, as is the case already in several Member States.

There are a number of other areas where cost savings are expected but there are no estimates, such as benefits for ECN operators resulting from the increased utilisation of the physical infrastructure of non-telco network operators (which could be accrued by approx. EUR 14m as a result of the (optional) introduction of a coordination body for access requests to public assets) and from expanded civil works co-ordination as well as benefits for construction companies resulting from in-building standards.

Given the limitations faced in the quantification exercise of costs and benefits derived from the preferred policy option, we cannot make a definite quantified conclusion as regards the overall balance of administrative costs and benefits pursuant to the OIOO. However, given the nature of the instruments and the fact that most costs are one-off while most benefits are recurrent (EUR 40m per annum), we can expect a positive overall balance.

9.How will actual impacts be monitored and evaluated?

Monitoring of the impact of the revised BCRD is one of the important factors to ensure the success of this initiative in contributing to the achievement of the 2030 Digital Decade connectivity targets. This has proved challenging under the current Directive, in particular as it did not set out specific reporting obligations nor define monitoring KPIs and therefore several potentially adequate indicators are not currently collected by national authorities.

In the following table, we relate the problems identified in the context of this Impact Assessment to the goal which the revised BCRD seeks to address and for which specific indicators are to be agreed. 

Table 14: Problems to goals of the revised instrument

Source: support study

Annex 6 includes a table listing potential indicators which could help monitoring the different areas of the future initiative, building on indicators included in the original 2013 BCRD Impact Assessment, and also reflecting indicators identified in the 2018 WIK/ VVA study 177 on the Implementation and Monitoring of the Directive. The discussions already initiated with Member States in the Communications Committee (COCOM) for monitoring the implementation of BCRD through KPIs may be continued in order to agree the most appropriate, useful and feasible set of indicators as well as the practical details of the implementation of the monitoring system (templates, periodicity, authorities concerned, etc.). In doing so, available indicators in existing reports (DESI, Digital Decade, etc.) should be considered, as well as the associated reporting costs for new KPIs 178 .

To further improve the on-going COCOM process, the new instrument could mandate Member States, in close cooperation with the Commission within COCOM, to define an appropriate set of indicators to monitor the revised legal instrument and ensure the respective data gathering.

Annex 1: Procedural information

1.Lead DG, Decide Planning/CWP references

The review of the Broadband Cost Reduction Directive is one of the actions announced in the Commission’s Communication ‘Shaping Europe’s Digital Future’ as part of the initiatives which would contribute to achieving the aim that ‘technology works for people’ and was part of the Commission’s Work Programme 2020.

This proposal was prepared under the lead of the Directorate-General Communication Networks, Content and Technology (CNECT), in particular Directorate B ‘Connectivity’, Unit B1 – Electronic Communications Policy. The process of the review was started in March 2020 and the DECIDE reference is PLAN/2020/7443. The evaluation and impact assessment for the Broadband Cost Reduction Directive’s review are carried-out in a ‘back-to-back’ process.

2.Organisation and timing

In accordance with the Better Regulation Guidelines, an Inter-service steering group (ISSG) was set up with representatives from various Directorates General and services of the Commission to assist DG Communication Networks, Content and Technology in the preparation of the Impact Assessment and legal proposal. 179 The ISSG is composed of representatives of Commission Directorate-Generals for Competition; Economic and Financial Affairs; Energy; Environment; Climate action; Internal Market, Industry, Entrepreneurship and SMEs; Legal Service; Mobility and Transport; Regional and Urban Policy; Secretariat-General.

The ISSG steered and monitored the progress of the exercise, ensuring the necessary quality, independence and usefulness of the evaluation. These services with a policy interest in the review of the Broadband Cost Reduction Directive have been associated in the development of this analysis and have provided support through the main steps of the process.

The ISSG met (online) for the first on 29 April 2020, where it provided support for the preparation of the consultation of the Roadmap/Inception impact assessment and the draft Consultation strategy. Shortly after the ISSG was consulted on the draft terms of reference for the support study. In July 2020, the ISSG was consulted on the draft questionnaire for the wide public consultation covering both backward and forward-looking aspects and its members were informed of the outcome of this exercise (factual summary report). ISSG members were invited to participate and were informed of the outcome of the different consultation activities which were run during the first semester of 2020 (Commission and study workshops). On 2 December 2021, the ISSG met (online) and discuss the draft evaluation SWD and accompanying support study and comments were received by 9 December 2021. On 4 February 2022, the ISSG met to discuss the draft Impact Assessment SWD (and accompanying support study) and the final evaluation SWD, and comments received orally and in written have been duly considered for the finalisation of this Impact Assessment.

3.Consultation of the RSB

The upstream meeting of the Regulatory Scrutiny Board (RSB) of 18 November for impact assessment report gave the RSB members the opportunity to make suggestions also on the evaluation report (e.g. lessons learnt). This report has duly addressed the various remarks made, as appropriate. It is worth noting that this is without prejudice of any further RSB comments in the scrutiny of 16 March 2022.

The RSB reviewed the Impact Assessment report on 16 March 2022 and gave a positive opinion. Based on the Board's recommendations for improvement 180 , the Impact Assessment has been revised as follows:

4.Evidence, sources and quality

The variety of views which have been collected through the extensive consultation activities contributed to the objectivity and independence of the evaluation, and allowed to cross-check data. Various sources have been used for evidence gathering, in particular:

·implementation reports: implementation, monitoring and screening exercises run by DG CONNECT regularly; annual reports issued by DG CONNECT covering market and regulatory developments in electronic communications such as the Digital Economy and Society Index (DESI).

·2018 Commission report on the implementation of the Broadband Cost Reduction Directive.

·dedicated support study: Support for the evaluation of current measures at European and national level to reduce the cost of deployment of electronic communications networks and for the preparation of an impact assessment to accompany an EU initiative to review Directive 2014/61/EU 181 (VIGIE 2020/0647), The objective of the study is to support the evaluation of the Directive by assessing the effect of measures adopted under this Directive (including voluntary measures and measures going beyond scope of the Directive), taking into account the effect of other measures related to the reduction of the cost of high-speed broadband deployment adopted at national level. The study also supports the preparation of an impact assessment to accompany a possible Commission initiative for the review of the Directive by contributing to the problem definition and assessing the impact of a number of policy options and refining them as necessary. To this end, the support study conducted targeted consultations consisting of surveys, interviews, case studies and workshops. The study also took into consideration the results of the open public consultation and, eventually, the roadmaps developed by Member States for the implementation of the Common Union Toolbox of best practices to foster connectivity that Member States submitted between April and November 2021.

·literature review: several reports 182 and studies 183 related to the Broadband Cost Reduction Directive were reviewed and an extensive literature review was carried out.

·Opinion of the Fit for Future Platform 184  on “How to favour interconnectivity between the digital and the green transition, including through simplification?” This opinion emphasized the importance of better access to data through improved co-use and governance of existing physical infrastructure for broadband roll out.

·stakeholders’ consultations:

o stakeholder feedback for the Roadmap/Inception Impact Assessment (19 June 2019- 17 July 2020);

o public consultation (02 December 2020 – 02 March 2021) covering both backward and forward looking aspects. A factual report was published and the detailed analysis of the responses was done using stakeholder mapping 185 ;

oonline participatory workshops on network deployment: drivers and barriers for network deployment on 27 January 2021 ( summary report ) and on institutional aspects of BCRD on 22 February 2021 ( summary report );

o BEREC’s opinion on the revision of the Broadband Cost Reduction Directive covering both backward and forward looking aspects;

otargeted consultation of local and regional authorities (2nd meeting of Committee of the Regions-European Commission Broadband Platform of 15 June 2021, online workshop with Living-in.EU signatories of 28 October 2021 ( event report ). This was carried out as not sufficient representativeness of sub-national authorities was ensured through the rest of the consultation activities and in order to have more robust and comprehensive data;

obilateral meetings, including with market stakeholders and their associations.

Annex 2: Stakeholder consultation (Synopsis report)

1.Introduction 

The Commission has carried out an evaluation of the current measures under the Broadband Cost Reduction Directive and the impact assessment of a possible revised instrument, in a back-to-back process.

In this context the Commission organized a stakeholders’ feedback exercise through ‘Have you Say’ webpage (June/July 2020), carried out a public consultation and organized also participatory workshops on network deployment (Q1 2021). Moreover, on 11 March 2021, the Board of European Regulators for Electronic Communications (BEREC) provided an opinion .

The public consultation involved 96 respondents from 25 countries (22 Member States, UK, Norway and China). The respondents' profiles reflect the self-selecting nature of public consultations and call for caution when interpreting the results, since they cannot be considered as a representative sample of all European stakeholders or of all stakeholders within a category of stakeholders, nor do their comments represent equal weight. Three NRAs participated in the public consultation.

2.General remarks

All stakeholders agree high quality connectivity plays a vital role in the current COVID-19 crisis and the economic recovery. COVID-19 crisis has increased data consumption. Accordingly, electronic communications networks (‘ECN’) operators experienced an increase in connection demand and data traffic. Business associations assert BCRD review has to be coherent with the EECC, and the EU should provide harmonized rules to foster investment on network deployment while, at the same time, avoid excessive regulation and obligations towards operators.

A large group of operators and most business associations recall the need for further harmonization and regulation at EU level, especially regarding administrative procedures such as permit granting to overcome market fragmentation. Whereas a smaller number of operators indicate the need for allowing Member States leeway to implement and enforce EU legislation. Meanwhile, a vast majority of public authorities is more reluctant than operators regarding measures at EU level.

All respondents stress at least one of the following areas in which public administrations could facilitate the deployment of electronic communications networks besides public funding: administrative burdens, access to publicly owned infrastructure and relevant information for deployment.

3.Evaluation of the overall functioning of the Broadband Cost Reduction Directive

There is a general heterogeneity in stakeholders’ views regarding to what extent the BCRD has been effective to achieve its general objective to reducing the cost for high-speed electronic communications networks deployment.

Only limited effectiveness is recognized by the ECN operators as regards reinforced coordination of civil works, which is considered burdensome and leading to delays in projects’ deployment, despite the procedures and deadlines for agreeing the coordination of civil works between operators introduced by the BCRD. The lowest progress, is registered in reduction of time and cost of permit granting.

In BEREC’s view, the BCRD provisions have no impact on SMP regulation, which can be considered to be a stricter framework. For instance, the pricing principle for SMP regulation is typically cost orientation, whereas for BCRD access it is ‘fair and reasonable’. As regards symmetric regulation under Art. 61(3) EECC, BEREC considers that there is a certain overlap, in particular with Art. 9 BCRD on access to in-building (physical) infrastructure.

4.Subject matter and scope

According to the majority of stakeholders, BCRD concepts and definitions should be aligned with the European Electronics Communication Code (EECC). Most stakeholders are of the view that the BCRD review is timely as it must take into consideration technological, market and regulatory developments. The revised text should also be aligned with the objectives of the Gigabit Society Communication and the current scope of the Directive should be updated, e.g. the threshold of 30 Mbps which was the target set in 2010 is perceived as inappropriate for today’s needs.

Overall, the measures covered by the Directive are perceived as relevant. Effective permit granting procedures are the most critical aspect for a timely and efficient deployment of electronic communications networks. The availability of relevant information is affecting network deployment.

BEREC advises caution on a possible change of scope of the rights and obligations under the BCRD from high-speed electronic communications networks to VHCNs, which could lead to methodological problems.

5.Access and availability of physical infrastructure and of in-building physical infrastructure

The lack of availability of suitable physical infrastructure, the lack of information on existing physical infrastructure, the difficulty to agree on terms and conditions of access with owners of physical infrastructure and the relatively slow dispute resolution process led to a more costly or lengthy network deployment. Costs linked to access to physical infrastructure are in the range of 60% to 80% of the overall costs of fixed network deployment and of 40% to 60% in the cased of mobile networks.

Most alternative ECN operators and their associations, including those owned by local authorities, consider the current access obligations as appropriate, but argued that their imposition would best suit SMP operators if imposed exclusively on them. SMP operators and their associations call for stricter rules, in order to avoid cases of refusals or high prices, which increase costs and slow down deployment and complain that the same assets are often subject to both BCRD and SMP-based access obligations. Irrespective of their market position, many ECN operators have requested the extension of such obligations to non-network physical infrastructure held by public bodies.

A significant number of stakeholders disagree with the suggestion that the ‘fair and reasonable’ principle for access to physical infrastructure has been applied effectively. Many operators and associations argue that the ‘fair and reasonable’ principle is not sufficiently precise and leaves a wide margin of discretion to dispute settlement bodies, thereby reducing predictability on the outcome. To increase effectiveness and efficiency, operators and their associations call for guidelines at national or at the EU level on the ‘fair and reasonable’ principle and for stronger enforcement of the deadlines for dispute settlement. On the other hand, a number of public authorities are of the view that the principle has been applied effectively and efficiently.

BEREC evaluates the overall functioning of the DSB as very positive and considers that DSB decisions have provided guidance to market participants beyond the specific case by setting references for fair and reasonable terms and conditions 186 . BEREC is of the view that the adoption of specific guidelines or rules by national authorities to assist the DSB in applying the BCRD contributes to the efficient and effective functioning of the dispute resolution process.

There is in general a strong support for the criteria provided in Article 3 for refusing access to existing physical infrastructure. However, for the availability of viable alternative means of access, fewer stakeholders expressed support. Mainly SMP operators argue this criterion might undermine the objectives of the BCRD by incentivizing the deployment of dark fiber in order to refuse access to ducts. Other operators, such as wholesale-only and fibre operators, consider this criterion not only appropriate, but in fact, crucial for the viability of their business model. There is a call for more guidance on the application of the criteria to prevent undue refusals for access.

BEREC considers that the reasons for access refusal are already well developed and that there is no need for more specific rules.

Stakeholders consider that the in-building infrastructure can be an important bottleneck for the deployment of new networks and its importance is likely to increase in the future. There is a call for enhancing the current provisions and also to propose an obligation for building owners to deploy and give access to in-building fibre wiring. In BEREC’s experience, problems have been found when in-building infrastructures are built in such a way that they do not technically allow third party access.

6.Coordination of civil works

A vast majority of stakeholders agree coordination of civil works may bring benefits for the joint deployment of networks, in terms of cost reduction, more sustainable network deployment and low burden on citizens. Nevertheless, ECN operators’ associations express certain caution as regards coordination of civil works with utilities arguing synergies with non-telecommunications are limited because of different work methods and timing and the subsequent requirements for maintenance while the network is in operation. BEREC is of the view that coordination of civil works has a high potential for cost savings, the exact level of which depends on several factors.

Although the coordination of civil works is perceived as burdensome and time and human resource consuming, it is recognized as a driver of efficiency and cost savings. Timely information sharing on planned civil works and civil works coordination at reasonable costs is essential.

BEREC stresses the importance of good data availability on planned construction works and suggests fostering it further as well as DSB guidance on costs allocation.

BEREC considers that the obligation to coordinate should be imposed on all network operators, irrespective of source of financing, as this would increase the possibilities to share costs of civil engineering. Such an extension may require the implementation of more precise criteria on a refusal of coordination.

7.Transparency measures

There is merit in making available information through the single information point (‘SIP’). Majority of stakeholders, including BEREC, consider that the availability of constantly updated information via the SIP on planned civil works and on physical infrastructure is relevant to network deployment.

ECN operators value access to information through the SIP, notably as regards: (i) physical infrastructure from public bodies, (ii) civil works in progress or planned by public authorities, (iii) acquisition and construction of sites for the deployment of mobile base stations, and on (iv) physical infrastructure from ECN operators. BEREC is of the opinion that the gathering of information on physical infrastructure is hindered by the way the process is currently foreseen in the BCRD, i.e. on a request basis and mostly optional via the SIP. As regards the entities that are under obligations to provide information, BEREC considers it appropriate that also organisations other than public sector bodies (e.g. network operators) make information on existing physical infrastructure available via the SIP. On planned civil works, BEREC points out that the current provisions in the BCRD do not oblige a database of planned civil works by network operators that are fully or partially financed by public means. In BEREC’s view, an obligation for all network operators to proactively make available via the SIP the relevant information on planned civil works would increase coordination and respectively decrease investment costs.

8.Permit granting procedures

The difficulty in obtaining permits is seen as a factor which can slow down deployment considerably. As regards factors that negatively impact the complexity and length of permit granting procedures to deploy or upgrade electronic communications networks, majority of stakeholders pointed towards the lack of coordination between the various authorities competent for granting permits, the multiplicity of permits needed for ECN deployment, the lack of electronic means/procedures for permit applications and the non-respect of the deadline to grant all ECN deployment related permits, including those for rights of way. The factor which all stakeholders consider as the less important to negatively affect permit-granting is the lack of explicit rules.

As regards potential measures for streamlining the permit granting procedures, the majority of stakeholders indicated the availability of an integrated permit granting procedure that encompasses all different procedures of each of the competent authorities involved and of the possibility to submit permit applications by electronic means; a single entry point (one-stop-shop), acting as an intermediary, routing permit applications to any competent authority (national, regional or local); coordination and monitoring by a single body (or set of bodies) of permit granting procedures by all the authorities’ in charge; the harmonization of permit procedures at Member State level or at EU level and the centralisation of the competence for all permits in one authority within the Member State.

In BEREC’s view, it would be easier for operators to apply for permits at a single point, as they would not need to know the (local) authority for granting the permit. This role could be played by the SIP.

BEREC is of the view that it would not be appropriate to establish the SIP as a centralised permit granting authority. BEREC notes that NRAs are (typically) not permit granting authorities and, in case the tasks of the SIP were assigned to the NRA, this would change the tasks of NRAs completely.

A large majority of stakeholders agree simplified permit procedures facilitate network deployment and propose some measures. For instance, tacit approval/deemed consent is well considered by ECN and other type of operators, whereas a vast majority of public authorities don’t mention or discard such approach. As regards public authorities’ feedback, a vast majority agree on simplifying permit procedures.

9.Environmental impact of electronic communications networks

Less than half of stakeholders consider that the deployment and operation of networks could have a moderate or more significant environmental impact. Conversely, most stakeholders consider the environmental impact of deployment and operation of networks as less significant.

Stakeholders agree that both energy efficiency and carbon intensity of used energy have at least some contribution to greenhouse gas emissions resulting from the operation of electronic communications networks.

Feedback provided suggests that a single criterion might not be sufficient or appropriate, and that a combination of criteria might be required to qualify networks as environmentally sustainable.

10.Governance and enforcement: Competent bodies and other horizontal provisions (penalties, dispute resolution)

The appropriateness of the dispute settlement system provided in the Directive is seen more critically by network operators than by public authorities. Stakeholders were more positive regarding disputes related to access to existing physical infrastructure and in-building infrastructure compared to other provisions. In general, more stakeholders found the current dispute resolution mechanism as appropriate for the access to infrastructure or coordination of civil works (respectively Art. 3 and 5) than for the respective transparency disputes (Art. 4 and 6).

According to BEREC, the principle of the dispute settlement process foreseen in the BCRD is appropriate, but the effects in different Member States depend on the pre-existing legal framework and/or market conditions.

11.Legal instrument

The choice made of a Directive as a legal instrument to regulate the measures to reduce the cost of deploying electronic communications networks is seen as appropriate by most public authorities (81%). The views from network operators (including ECN operators) are mixed, with 40% of stakeholders finding the choice of a Directive as a legal instrument to be appropriate, 30% disagreeing and more than 27% being neutral.

With regard to the choice of instrument for the future, 39% of the respondents would support a shift to a regulation with 35% of respondents disagreeing, while the choice of a directive with maximum harmonization is supported by a limited number of respondents (25%). 47% of respondents consider that a minimum harmonization directive (similar to the current situation) is the best way forward, while 29% of respondents disagree.

Annex 3: Who is affected and how?

1.Practical implications of the initiative

The proposed changes to the BCRD would not introduce any obligations directly impacting SMEs as purchasers of Gigabit services. SMEs acting as ECN operators or other (non-ECN) network operators may be impacted the same way as other businesses under those categories of stakeholders (see Annex 2 of support study for more information). SMEs acting as ECN operators or other network operators may in particular include certain small scale local fibre investors or local utilities which are present in some Member States. Effects which are specific to SMEs acting as ECN or other network operators are highlighted in this section.

1.1. Costs to stakeholders

The introduction of the preferred option is expected to entail set-up costs in particular in relation to the streamlining and digitisation of permit granting procedures and systems and the adaptation of SIPs to include up-to-date and georeferenced information from public authorities and network operators including information about non-network facilities suitable for ECN deployment (such as public buildings, street furniture). Some (more limited) set-up costs may also be incurred in relation to the development of rules and any associated EU Guidelines for PIA, access to in-building and civil works co-ordination as well as standards for in-building infrastructure.

As a rough approximation based on assumptions that are described in more detail in this Annex, the preferred option might involve quantifiable set-up costs of around EUR70m. The estimated distribution of set-up costs amongst the different stakeholder types is shown in the following figure.

Figure 4: Set-up costs by stakeholder type

__________________________________ _

Source: support study

The large proportion (roughly EUR35m in total) estimated in relation to local authorities relates to changes to permit granting procedures (including the introduction of new categories of permit-exempt works) and the introduction of digital platforms for permit granting in those countries where it is not otherwise envisage. However, it is likely that a portion of this cost would be borne by national administrations (potentially with support from EU funding for digitisation programmes). It is also likely that local authorities will incur costs to digitise information about their assets (those which are suitable for ECN deployment) for inclusion in the SIP, but the level of this cost is difficult to determine, and depends on the degree to which information is already available in electronic form, which is compatible with submission to a digital platform. The provision for exemptions based on proportionality should also serve to limit costs to public authorities of making available information about their facilities in cases where they would clearly be unsuitable or there is insufficient demand to justify the costs incurred, for example.

SIP management authorities are estimated to incur incremental set-up costs due to the improvements to the SIP platform associated with the preferred option of around EUR6.75m, and may also incur around EUR3.5m annually in related maintenance and enforcement.

The cost implications to DSBs arising from the preferred option are expected to be relatively limited amounting to some EUR0.7m in set-up costs (in connection with the preparation of EU level guidelines on PIA, in-building infrastructure and civil works co-ordination) and an additional EUR0.4m in recurring costs across the EU. The increased workload is expected to result from the inclusion of public non-network facilities within the scope of the dispute settlement process. However, this is expected to be offset by a reduction in the number of disputes due to the adoption of EU-level guidelines on PIA, civil works co-ordination and access to in-building physical infrastructure.

EUR1.1m in set-up costs might be incurred by DSBs and/or authorities responsible for building standards in the development of national standards for in-building infrastructure in countries where such standards are not already in place, while recurring costs of around EUR2.2m per annum might be incurred in related enforcement activities.

One can anticipate that ECN operators across the EU might incur around EUR15m of set-up costs in connection with their input into permit granting systems and SIPs (alongside associated changes to internal processes and data gathering methods) as well as their contributions to the development of standards for in-building infrastructure and EU-level Guidelines. For larger operators, the main impacts are likely to be associated with changes to the permit granting system and the need (in a few countries) to submit information about existing and planned deployment in georeferenced format directly to the SIP. Smaller ECN operators as well as other non-ECN network operators may also be required to submit information about existing and planned physical infrastructure directly to the SIP in some countries as a result of the preferred option. However, impacts could be limited if exemptions to the obligations are provided for on the grounds of proportionality. As regards the costs of providing input regarding Guidelines and standards, experience suggests that SME ECN operators may limit the costs their incur individually by relying more on trade associations for representation.

Other non-ECN operators may also have set-up costs of around EUR5.6m relating to new requirements in a few countries to submit information directly to the SIP and their input into the development of Guidelines on PIA and civil works co-ordination. Smaller non-ECN operators in a few countries would (like larger players) need to submit information about existing physical infrastructure to the SIP for the first time. In some cases e.g. for local utilities, this may require the digitisation of information about their network, and common formats to submit information about planned works. The precise costs of this process are difficult to estimate, but may be limited if as described above, there is the possibility for exemptions based on proportionality.

Finally, one can estimate that representatives of construction companies may incur costs of around EUR1.1m providing input to the development of standards for in-building infrastructure including fibre, in those countries where such standards are not yet in place.

It should be noted that a large part of the costs that may be incurred by local authorities, SIP management authorities and DSBs are likely to be passed to ECN operators in the context of fees for permit applications, dispute resolution and access to the SIP platform. Incremental costs to construction companies of deploying in-building fibre (estimated at around EUR50 per household) are also likely to be passed to consumers and SMEs in the context of building purchases or rental fees.

Tower companies and other private owners of non-network facilities (such as commercial building owners) are not expected to incur significant costs as a result of the preferred option.

1.2.Benefits

Consumers and SMEs purchasing VHCN are expected to be the main beneficiaries of the implementation of the preferred option, as (depending on how cost savings are distributed) they could benefit from potential price reductions for Gigabit broadband and/or the expansion of Gigabit services to cover a greater proportion of premises (around 6.5% additional premises if FTTH is deployed or 9.1% if savings are reinvested in 5G FWA). A recent study found that having access to superfast broadband was associated with an increase in wellbeing worth around EUR260 per household per year. 187  Accelerated deployment of mid-band 5G could also improve access for SMEs to innovative IoT services, which may offer new business opportunities or support productivity gains.

ECN operators are expected to benefit from significantly reduced administrative burdens and cost savings in VHCN deployment, which could enable them to further expand their networks or engage in retail price reductions to boost take-up. Specifically, due to better access to existing physical infrastructure and civil works co-ordination the required private investment (CAPEX) needed from ECN operators to reach 90% FTTH coverage under the preferred option is estimated to be around EUR12bln lower than under a status quo in which there is more limited infrastructure re-use and collaboration, 188 while ECN operators could also accelerate deployment of mid-band 5G. The benefits described would apply in particular to ECN operators without their own nationwide physical infrastructure, including regional and local players, which may be SMEs. In addition, ECN operators which invest in their own network infrastructure are expected to save an estimated EUR40m in administrative costs annually as a result of improvements in the permit-granting regime as well as enhanced clarity and improved access to physical infrastructure in general and to public facilities in particular. The introduction of measures such as permit exemptions and tacit approval, where not already mandated, should also significantly cut times (and reduce administrative costs) for ECN operators to obtain a permit for VHCN deployment. The reductions in bureaucracy in permit granting and improved access to public non-network facilities could also benefit tower companies seeking to install additional infrastructure.

Local authorities are also expected to benefit from the proposed changes to the BCRD, as implementation of permit exemptions, tacit approval (where feasible) and the introduction of digital platforms for permit granting is expected to lead to significant efficiencies in the medium to long term. 189 Precise estimates are difficult to make, but it is possible that the introduction of permit exemptions and digital permit granting systems could reduce annual costs to local authorities associated with processing deployment permits by EUR3.5m or more in those countries which are not otherwise planning to streamline permit granting processes. Although the BCRD applies specifically to ECN, it is not excluded that local authorities and national administrations could choose (if this is not yet the case) to extend the principles applied to ECN to increase efficiency in administrative procedures for other sectors, benefiting both the authorities and stakeholders concerned.

Member States also gain from potential savings of EUR2.4bln in subsidies that would otherwise have been required to deploy FTTH to 90% of households. These savings could be reinvested to achieve increased VHCN coverage or deliver benefits in other sectors.

Lastly, it should be noted that there are potential benefits to be gained for construction companies from the installation of in-building fibre, if certification is accompanied by labelling schemes which could serve to boost the value of property, 190 and for other network operators, if they are able to benefit from increased revenues or cost-savings associated with facility sharing or if they can exploit the presence of VHCN to engage in digitisation activities benefiting their own operations (e.g. smart energy, smart waste management, etc.).

2.Summary of costs and benefits

An overview of the main benefits and quantifiable costs associated with the preferred option compared with the status quo are provided in the following tables. For the assessment of other benefits and costs which may be less significant or less readily quantifiable please refer to Annex 2 of the support study. Please note that not all the data presented below would be relevant for the offsetting exercise following the approach of the one-in-one-out principle.

In the table concerning costs, the symbols ‘+’ and ‘-’ are used respectively to indicate cost savings and additional costs in cases where the amounts cannot be readily quantified. ‘+ /-’ is used to indicate situations where costs might increase or decrease depending on the situation e.g. the introduction of requirements for public authorities to make available access to their physical infrastructure on fair and non-discriminatory terms might either lead to increased or reduced administrative costs depending on whether the Member States concerned make use of measures to standardise terms and potentially co-ordinate interactions between ECN operators and the public authorities concerned.

Figures provide an indication of the approximate costs linked to the implementation of the preferred option. In particular for costs relating to permit granting processes and platforms as well as the SIP, significant differences in cost between countries are likely depending on whether the countries concerned already have or are planning to take the measures that would be mandated under the preferred option. This has been taken into account in the estimations to the extent feasible. It should be noted that all figures are estimates, and should be considered as directional indicators concerning the impact, rather than definitive conclusions concerning the costs to be incurred. The assumptions behind the estimates are explained in the relevant sections. All cost estimations are based on FTE at the level of ISCO 2 (professionals) except for costs related to the processing of permit applications, which are assumed to be conducted by staff at the level of ISCO 3 (technicians and associated professionals). An 8 hour day and 225 working days per year are assumed. A summary table is also provided showing the assumptions regarding the number of FTE (and number of countries assumed affected by cost) in each case.

Table 15: Main benefits to stakeholders to 2030

Source: support study

Table 16: Overview of Benefits (total for all provisions) – Preferred option

Source: support study

Table 17: Overview of costs- Preferred option

Source: support study

3.Implications for ECN operators

1.

2.

3.1.Obligations impacting ECN operators

ECN operators are impacted by nearly all the planned changes to the BCRD under the preferred option including:

·Clarification that assets subject to access obligations under EECC or State Aid would not also be subject to BCRD obligations

·Clarifications around the scope of the civil works co-ordination obligations and potential to deny requests

·The extension of physical infrastructure access obligations to include access to public non-network facilities (not limited to SAWAP)

·Requirement for fully digitised SIPs, requirement for network operators to provide information to the SIP, improvements to information available on the SIP (e.g. through georeferencing, pro-active updating) and its extension to public non-network facilities

·Greater clarity on the rules regarding physical infrastructure access wholesale pricing and cost allocation for civil works co-ordination

·Streamlining of the processes to obtain permits and Rights of Way including exemptions, tacit approval (where feasible), the introduction of digital platforms, and the limitation of fees to administrative cost

·Requirements for the installation of FTTH in-building physical infrastructure and fibre and associated standards and rules/guidance for access conditions

·Associated reporting obligations

3.2.Costs

Option 3 does not entail significant new implementation costs for ECN operators. However, ECN operators are also likely to be involved in the elaboration of new Guidelines and implementation of new procedures, which may result in these stakeholders incurring certain set-up costs, as follows.

Improvements to the SIP

Significant participation by ECN operators may be required in Member States consultations on improvements to the operation of the SIP to include information directly from ECN and other network operators (where this is not already the case) and to expand its current scope.,. However, a significant proportion of Member States already have or are planning to develop SIPs meeting these requirements, limiting ECN operator efforts. An average of 1 FTEs from amongst the ECN operators and trade associations in each Member State over 1.5 years 195 would imply a cost to engage in this development of around EUR 2.1m EU-wide.

In the implementation phase, the requirement to provide information in georeferenced format might imply additional costs for some ECN operators, since ECN operators without records in this format would need to update their records. However, it seems reasonable to assume that many ECN operators would already have georeferenced network information and at least 16 Member States already have or plan to implement georeferencing. 196 Nonetheless, for some operators that were not planning to introduce this measure, this obligation is likely to result in set-up costs. The precise level of cost is difficult to quantify in the absence of information about how many of the records are already georeferenced.

The incremental costs of obligations for network operators to provide pro-actively, directly to the SIP, information concerning existing infrastructure and about planned civil works are likely to be limited because there are few countries which do not already have these requirements in place or are planning to introduce them. 197 Moreover, ECN and other network operators in all EU Member States are already obliged to respond to information requests under the BCRD. In addition, ECN operators should also in principle already have information about planned works in the context of planning procedures which could be provided to a SIP. Costs of providing this information could be limited if there is agreement on a standardised format for the information to be used in the context of both planning applications and submission to the SIP for civil works co-ordination.

There is also in principle a possibility that by some ECN operators use newly required information about planned civil works from other ECN operators to pre-empt VHCN deployments planned by their rivals, but this effect could be limited if, as proposed, a VHCN operator could deny civil works co-ordination in cases where there has been no announcement about the intention to deploy by the requesting party, whether in the context of Article 22 EECC or a consultation procedure in the context of the award of State Aid.

Streamlining of processes to obtain permits and RoW

Experience from the implementation of the permit exemptions for SAWAPs shows that ECN operators are likely to be very active in providing input into the definition of permit exemptions at EU level, in supporting the implementation of exemptions in the different Member States, and in ensuring the effective implementation of digital systems for permit granting for VHCN deployment. Moreover, ECN operators may need to create or adapt interfaces and train personnel to interact with any new digital permit granting systems. If industry contributes 3FTE per MS over a 2 year period for the above tasks, 198 the set-up cost would be EUR 8.4m. 199 ECN operators (as well as any other users of a digitised permit granting system) could potentially be called upon to meet all or part of the expenses associated with the implementation of a digital permit granting system. However, if the significant upfront costs of the digitising the system are distributed over a sufficient number of years and if as expected digitisation reduces ongoing operational costs the cost for individual permit applications would decline. 200  Moreover, where the costs for the development of digital permit granting systems are covered by eGovernment support programmes (including EU funds which have been made available for this purpose), there might not be a need to recover these costs from ECN operators (or the national budget).

Access to physical infrastructure and civil works co-ordination Guidelines

ECN operators are likely to be called upon to contribute in the elaboration of EU Guidelines concerning Access to physical infrastructure, civil works co-ordination, and access to in-building infrastructure. Their contribution might be required at two or three discrete stages in the process. If, over a period of 2 years, for each Member State 1 FTE from across the industry is involved in elaborating guidelines on PIA and 0.25 FTE for the aspect of the Guidelines concerning cost allocation in civil works co-ordination, the one-off costs would be EUR 2.8m and EUR 0.7m respectively.

In-building infrastructure

ECN operators will also need to engage in the development of national standards for in-building infrastructure in those countries where standards do not already cover the requirements for in-building fibre. Based on information provided by national administrations in the context of the WIK ICF questionnaire in Q1 2021, at least 10 Member States have standards which cover in-building fibre or could be readily adapted to support in-building fibre, 201  whilst 9 Member States did not have such standards in place. Information was not available for the remaining 8 countries. If 1 FTE from amongst ECN operators is engaged in this topic for 1.5 year in 14 Member States, the cost would be approximately EUR1.1m.

Reporting obligations

It is assumed that ECN operators will be requested to provide data once every 3 years to the authorities (concerning usage of access to physical infrastructure and civil works co-ordination) and to consultants possibly employed by the European Commission (concerning their perceptions regarding the effectiveness of the provisions of the BCRD).

Since NRAs already gather data on the use of SMP PIA and other wholesale indicators in the context of market reviews, the incremental cost to ECN operators of gathering such data should not be significant, In cases where it is clearly indicated by ECN operators that they are reliant on certain key providers of access or co-ordination under the BCRD, such as a major utility, information could be collected from this source rather than from multiple ECN operators, in order to reduce the administrative cost of data gathering.

Summary of costs

Overall, quantifiable set-up costs of approximately EUR 15m might be incurred by ECN operators across Europe in connection with the implementation of mandatory elements of the preferred option, of which the major part is expected to be linked to improvements to permit granting systems and the SIP. Additional costs might be incurred in particular to produce georeferenced records in cases where this is not planned to be required and is not already in place amongst ECN operators. However, this cost is not readily quantifiable. Recurring costs are likely to be minimal for this group of stakeholders.

A summary of the potential costs that could be incurred by ECN operators in connection with the preferred option is shown below. Where the measures give rise to cost savings, these are discussed in relation to the section on “benefits” below.

Estimate of quantifiable administrative costs (and cost savings) for ECN operators: BCRD preferred option.

Source: support study

Note: Negative figures represent cost savings

3.3.Benefits

ECN operators are expected to benefit from improved access to existing physical infrastructure, improved opportunities for civil works co-ordination, more comprehensive information concerning existing infrastructure and improved availability of in-building physical infrastructure and fibre. This should reduce the costs of deployment for ECN operators. The preferred option is estimated to reduce the total cost of deploying FTTH to 90% of households by 2030 by around EUR14.5bln compared with the status quo 202 . The required private investment (CAPEX) needed from ECN operators to reach 90% FTTH coverage under this option is estimated to be around EUR12bln lower than under the status quo. These CAPEX savings could be passed onto customers to foster increased take-up of FTTH connections by consumers, or could be used by ECN operators to extend coverage into areas which would otherwise be considered unprofitable.

The preferred option is also likely to reduce administrative costs for ECN operators in relation to access negotiations. Whilst the resourcing requirements for ECN operators for negotiating access to physical infrastructure are expected to increase, notably in connection with the deployment of 5G small cells other than SAWAPs under the status quo, 203 this impact would be counteracted under the preferred option by the inclusion of non-network public facilities within the scope of the revised legal instrument and provision of clear guidelines at EU level concerning terms and conditions for access. Clearer rules at EU level could also reduce the need for dispute resolution in relation to network access to physical infrastructure and civil works co-ordination in the significant number of countries where there are no existing guidelines in these respects. 204  This could amount to cost savings compared with the status quo of around EUR24m across Europe, if on average resourcing in access negotiation departments amongst MNOs would otherwise need to increase by around one third 205 to handle the additional sites.

The preferred option could also reduce ongoing expenses associated with permit applications and RoW for both fixed and mobile VHCN deployments 206 . If the streamlining of permit granting applications reduces resourcing needs for permit applications within ECN operators by around one third, 207  counteracting expected increases resulting from additional applications for 5G mid-band deployment, this could reduce administrative costs for ECN operators associated with permit granting across the EU by an estimated EUR31m to around EUR61m Of these, cost savings specifically linked to the BCRD might account for around EUR15m per annum, taking into account existing plans to streamline permit granting systems. 208 . The requirement that fees for permits should be limited to administrative cost should also reduce the cost for ECN operators in those cases where fees are currently considered to be set at excessive levels, and it should ensure that future cost savings in permit granting are passed on to ECN operators. However, the level of such savings is difficult to estimate in the absence of information about the degree to which permit granting charges currently exceed above administrative cost.

It is expected that improvements in the completeness and accuracy of information via SIPs should also reduce resourcing needs amongst ECN operators in network planning. However, the precise degree of savings depends inter alia on how much information is made available about non-network public facilities, for which information requirements would be subject to “proportionality” rules and is therefore difficult to estimate, . 

The improvements in permit granting procedures as well as the expansion of obligations to access public facilities should enable ECN operators to accelerate the deployment of mid-band 5G. They should cut about 8 months from the estimated 5 year timeframe to achieve 75% coverage of the population with 5G based on 3.6 GHz frequencies and enable an expansion in mid-band 5G deployment to reach 77% of the population by 2030 (compared with 75% in the baseline).Increased coverage of mid-band 5G and the associated support for mid-band IoT applications could in turn support expanded business opportunities and revenues within the sector, although projections around the specific scale of the opportunities vary. 209 Deployment of services based on millimetre waves would also be facilitated.

The preferred option would also reduce the potential overlapping of obligations applying to SMP operators and ECN operators with obligations under State Aid, by clarifying that BCRD obligations should not apply to the same assets that are subject to access obligations under SMP or State aid decisions. Finally, ECN operators deploying VHCN (even if publicly financed) would also be able to deny requests for civil works co-ordination (thereby reducing the obligations that would otherwise apply) if they offer a suitable alternative and/or if the requesting operator had not declared its intention to deploy in the context of infrastructure surveys (Art 22 EECC) or consultation procedures conducted during the award of State Aid.

An overview of the estimated quantifiable benefits to ECN operators is provided in the following table.

Estimated quantifiable benefits to ECN Operators by 2030

Source: support study

4.Implications for other network operators

4.1.Obligations impacting other network operators

Other network operators (besides ECN operators) are not expected to face significant changes to their current obligations as a result of the implementation of the preferred option. Some changes will however apply as follows:

·Changes in transparency obligations imply that non-ECN network operators will need to provide information about physical infrastructure to the SIP directly, with pro-active notification of planned civil works and georeferencing of all information

·The adoption of more specific rules and associated EU level Guidelines concerning terms and conditions for access to physical infrastructure (Article 3) and cost allocation for civil works co-ordination (Article 5), may affect terms and conditions for access and co-ordinated deployment.

·Clarification of the scope of the civil works co-ordination obligation (e.g. deployments which are fully or partly publicly funded) may also affect some non-ECN network operators.

4.2.Costs on other network operators

It is assumed that other (non-ECN) network operators, like ECN operators, would engage in the development of any EU-level guidelines concerning the terms and conditions for access to physical infrastructure and civil works co-ordination. Although the focus of other network operators would be on the terms and conditions for access to network facilities specifically (and not on non-network facilities which would be covered for the first time under the BCRD), , it is assumed that the same resources would be devoted as those provided by ECN operators (i.e. 2.5 FTE in total over the duration of the process). given the diversity of actors involved in different sectors.

It is possible that the introduction of more precise rules and/or EU Guidelines may lead to reductions in wholesale charges for non-telecom access to physical infrastructure in some cases (e.g. if wholesale charges were previously excessive or if only incremental costs are required to be covered in case CAPEX is recovered elsewhere). On the other hand, it is also possible that other network operators might be required to bear a higher proportion of costs in the case of civil works co-ordination than under the status quo, if the existing cost allocation arrangements are found not to be reasonable. The net effect of these developments may be positive for other network operators (in terms of overall cost reductions and potentially increases in profits) if greater certainty over, and potentially lower charges lead to greater utilisation of access to physical infrastructure and civil works co-ordination than under the status quo and if the pricing regimes applied permit other network operators to benefit from increased revenues and / or cost reductions.

It is not possible to quantify any potential costs (or benefits) from potential changes to the pricing regime for other network operators, because they depend on the precise definition of the new rules and associated Guidelines and their application alongside the impact on the take-up of access to physical infrastructure and civil works co-ordination. Negative effects are however expected to be limited. Non-ECN network operators might also benefit from reduced administrative costs linked to the easier negotiation of access to physical infrastructure and civil works co-ordination, if the introduction of clearer rules on terms and conditions (including price) and/or potential Guidelines at EU level, reduce reliance on dispute resolution.

Non-ECN network operators may be called upon to provide input concerning the improvement of the SIP, and may need to invest in changes to their systems to reflect new requirements. If providing input on changes to the SIP entails the use of 1 FTE over 1.5 years per Member State, then the total “set-up” cost would be EUR2.1m across the EU27 (equivalent to the resourcing provided by ECN operators).

The requirement to provide information in georeferenced format imply set-up costs for some non-ECN operators just like for ECN operators (see above). Equally, requirements for network operators to provide information to the SIP directly concerning existing infrastructure and provide information about planned civil works pro-actively could also increase recurring administrative costs for non-ECN network operators just like they do for ECN network operators (see above).

A summary of the estimated cost impacts to other network operators is provided in the following table.

Estimated administrative costs for other network operators linked to the preferred BCRD option.

Source: support study

4.3.Benefits to other network operators

Non-ECN network operators would not be the direct beneficiaries of changes to the BCRD. However, they may benefit indirectly from increased utilisation of their physical infrastructure and expanded and more efficient civil works co-ordination (if an increased use outweighs any potential price decreases and if they are allowed to retain some of the profits from these activities). They could also exploit the presence of VHCN to engage in digitisation activities which support productivity and sustainability within their own operations (e.g. smart energy, smart waste handling, connected and automated mobility). Other network operators could also benefit from accelerated digitisation of the permit granting process if Member States chose to pursue solutions which apply beyond the electronic communication sector.

It should be noted that the clarification that the civil works co-ordination obligation applies only to works that are publicly funded, rather than operators which may be partly or wholly publicly owned, could exclude certain works which were previously captured by this obligation under national legislation.

Overall, it is not possible to quantify the benefits as they depend to a large extent on precise access terms and how Member States choose (or not) to implement requirements beyond the ones required in the revised legal instrument.

Estimated benefits for other network operators linked to the preferred BCRD option.

Source: support study

5.Implications for construction companies

5.1.Obligations impacting construction companies

The main obligation impacting construction companies is the requirement in the preferred option to make new buildings and major renovations FTTH-ready by deploying suitable in-building infrastructure, including dark fibre, and complying with national standards.

5.2.Costs on construction companies

10 out of 19 Member States which responded to the WIK ICF questionnaire reported that they already have standards in place at national level concerning in-building infrastructure. A review of a selection of these standards tends to confirm that in most cases they are suitable for FTTH, because they encompass the installation of FTTH (the majority of cases) or (e.g. in Lithuania) require the installation of cable trays and ducting that could easily support FTTH installation. Nevertheless, for at least a further 10 countries (and potentially more) an obligation to deploy FTTH-ready in-building infrastructure would require construction companies to change existing practices, as well as to contribute to the development of the new standards.

If the development of standards for in-building infrastructure involves 1 FTE from the construction sector in 14 Member States working the equivalent of fulltime for 1.5 years alongside experts from ECN operators and from building standards authorities, the total cost for the constructor sector would be around EUR1.1m EU-wide. 210 Furthermore, it is possible that the standards adopted might affect the materials and increase the costs associated with internal ducting (and potentially the deployment of wiring by construction companies) in newly build houses and major renovations compared with the status quo. Estimates from ECN operators suggest that the greenfield cost to install VHCN-ready in-building infrastructure could vary between EUR100-EUR450 per household depending on the cost of labour and type of housing.

This might appear to be a significant amount that would fall on construction companies when renovating or building homes, especially when one considers that the EU is seeking to renovate 35m buildings by 2030 in conjunction with targets to reduce building-related GHG emissions. 211 However, the actual cost would be significantly less because not all renovations are sufficiently profound to trigger the obligation. Also, additional costs would only apply for countries which do not already have FTTH-based standards in place and – importantly - the additional cost to a construction company would likely be considerably less because it would have anyway needed to deploy some form of in-building infrastructure to house energy and other cables, even in the absence of standards for FTTH in buildings. Moreover, the standardisation of the requirements might lead to cost-savings by limiting the time spent on designing bespoke solutions.

In any case, it should be kept in mind that building owners would pass on the cost of these deployments to purchasers of the property, residents or network operators. Thus, this obligation should not result in a net increase in one-off costs for construction companies, although they might contribute to marginally higher sale costs or maintenance costs. 212 Building companies may however be subject to compliance costs linked to the monitoring and enforcement of this requirement. The level of these costs is difficult to quantify as it would depend on the nature of the enforcement regime, and the degree to which the requirement would demand additional documentation, as opposed to adjustments to documentations which are already mandatory.

5.3.Benefits to construction companies

In addition to the benefits from streamlining and simplification that standardisation of in-building requirements could bring, construction companies could potentially benefit from increased valuations if a labelling scheme is introduced to market buildings as “FTTH-ready”. The potential benefits of this approach can be seen in South Korea which introduced a Certification Programme for Broadband Buildings, including a voluntary labelling scheme in 1999. 213  

The Korean labelling system is applied to multi-dwelling residential buildings with more than 50 residential units, and commercial buildings with a surface area exceeding 3300 m2. The scheme is considered a success, with benefits also accruing to building companies. For example, a report by Ovum for the World Bank notes that “the initiative [the certification program] has been welcomed by developers as it has allowed them to charge more for buildings with broadband services, and it has resulted in many partnerships between construction firms, ISPs, and telecom services providers” 214 . Other studies suggest that “The system provides builders with a means for differentiating their products—a useful feature in so highly competitive an industry” 215 .

Although it is not possible to quantify the potential benefits of such a scheme, if introduced in Europe, it seems reasonable to expect that any financial benefits associated with increased property prices would more than outweigh the limited incremental cost to property developers of installing FTTH in-building.

Estimated benefits for construction companies linked to the preferred BCRD option.

Source: support study

6.Implications for owners of private non-network facilities

6.1.Applicable obligations

The changes to the BCRD proposed in the preferred option would not involve the imposition of any new obligations on stakeholders which are not public bodies and/or which do not fall within the definition of “network operators” in the context of the BCRD. 216 Thus, for example, private owners of non-network assets, such as tower companies and owners of commercial buildings, would continue to lie outside the scope of the BCRD.

6.2.Costs for owners of private non-network facilities

The preferred option would not result in significantly increased administrative costs for the owners of private non-network facilities. However, infrastructure owners such as tower companies or commercial building operators might find that requirements which aim at improving transparency and conditions for access to non-network public facilities (such as the rooftops of public buildings, street furniture, potentially publicly owned land) may give rise to increased competition for the provision of hosting. The impact of this is difficult to assess. Feedback from stakeholders in the context of the WIK ICF workshop as well as input to the Commission public consultation suggest that there is unlikely to be significant competitive impact on operators of commercial buildings, since ECN operators specifically favour access to public infrastructure because of the number of facilities involved, spacing (e.g. in relation to street furniture) and common ownership – at least within a specific municipality. The impact on tower companies may depend on the value added facilities they provide.

6.3.Benefits for owners of private non-network facilities

Certain owners of private non-network facilities, and specifically tower companies may benefit from some of the provisions in the preferred option – in particular those which serve to improve conditions to obtain permits for civil works (including construction) needed to deploy elements of VHCN, or exclude certain categories of works from the need for a permit. Tower companies might also themselves benefit from improved access to public non-network facilities, if they are allowed by Member States to also use such access to install their infrastructure.

7.Implications for national, regional or local public authorities

7.1.Obligations impacting national, regional or local public authorities

A number of the obligations planned under the preferred option would impact the activities of national, regional or local authorities, and give rise to costs and/or benefits for this group of stakeholders.

The extension of the access to physical infrastructure obligation to cover non-network public facilities would require public authorities (and/or other owners of public property) to meet reasonable requests for access to infrastructure suitable for the installation of VHCN. These authorities would be required to follow the directions of the dispute resolution body in cases where agreement on terms and conditions cannot be found.

The extension of the transparency obligation to include information about non-network public facilities, where proportionate, would require public authorities (and/or other owners of public property) to identify and provide information about the location of their facilities which are suitable for the deployment of VHCN.

Requirements to pro-actively notify planned works would apply to local or other public authorities (in their capacity as network operators) planning works to roads and any other infrastructure covered by the provisions on civil works coordination in the revised legal instrument .

The requirements concerning permit granting and Rights of Way would require local authorities to collaborate, together with national administrations and other stakeholders, on the definition of permit exemptions. Local authorities would need to adapt processes for handling Rights of Way over public property so that these processes work in tandem with permit applications, and to overhaul current (potentially manual) systems for permit applications so that processes are consistent at national level and applications for ECN construction (at a minimum) are conducted via a digital platform. There would also be a new intermediate deadline to declare whether or not applications are complete, and would require Member States to pursue where possible an approach of “tacit approval” in cases where no decision is made within 4 months. Local authorities would need to work with other relevant authorities involved in permit granting to ensure that all relevant inputs are taken into account within the period permitted for permit granting.

Local authorities would also be affected by the obligation to set charges for permit applications at levels which do not exceed administrative cost, and may be affected by the requirement that ECN operators could seek compensation for damages if the timeframes for permit applications are not met.

Finally, local authorities may be impacted by reporting obligations which require them to provide data on the numbers of applications and associated timeframes etc.

7.2.Costs on national, regional or local public authorities

The preferred option is expected to give rise to significant short-term implementation costs for national, regional or local public authorities in some countries, in particular in relation to permit granting measures and information requirements for public non-network facilities. Other measures are unlikely to result in significant cost increases compared with the status quo, and there is a significant potential for the measures imposed on local public authorities via the BCRD to deliver overall cost savings and public benefits in the medium to long term, as discussed in the “benefits” section.

Measures relating to permits and Rights of Way

The requirement for a digital platform for permit granting together with the requirement for consistency at national level of permit granting procedures are likely to have the greatest impact on short term implementation costs for national or regional/local public authorities. This obligation is likely to require investments in IT systems for those countries which do not already have and are not already planning to implement a digital system for permit granting. According to the Roadmaps submitted by public authorities as well as responses to the WIK ICF questionnaire 5 Member States already have a fully digitised system for permit granting, 217 and another 6 report that their system is partially digitised. 218 7 Member States report that they have plans to digitise their permit granting system or expand existing digital systems. 219 However, this still leaves 9 Member States out of the 27 which produced roadmaps by November 2021 that would have to introduce digitised systems because of the legislative proposal. Moreover, it is not clear how many of the other Member States will implement fully digitised permit granting platforms, and target dates have not been given in all cases.

It is difficult to identify the specific costs associated with implementing digital systems for permit granting from national accounts, because public authorities often only report a global budget for digitisation, without giving the necessary details. 220 However, there is a wide variety of costs, which may depend in particular on the scope of the system and the efficiency of implementation. For example, the cost of implementing a fully digital permit granting system in the Netherlands is said to have ballooned from an initial estimate of EUR300m to EUR2bln. 221 However, this system is intended to cover all types of permits, and much lower costs have been reported in other cases. In another example, the Belgian authorities report that their digital platform for permit granting had a set-up cost of EUR1.2m. 222 Moreover, commercial solutions e.g. MOOR-WOW are offered to municipalities by organisations such as Visma Roxit Netherlands for EUR0.25 per inhabitant. 223  Overall, based on interviews conducted for the study including interviews with the developers of permit granting systems, the cost of establishing a digital platform for permits required by network operators in a medium-sized country is estimated at EUR2m with ongoing resourcing estimated at around 25FTE. Such a platform would cover utility and water networks as well as ECN.

If changes to the Directive result in 10 Member States needing to invest in digital permit granting systems, and if the cost is EUR1m in each case for the platform (for the aspect linked to ECN permits), the resulting EU-wide total set-up cost for the platform alone would be EUR10m. However, additional costs might be incurred by local public authorities to align the underlying processes for permit applications and train staff about the new system. If around 25 FTE are involved per Member State concerned over a period of 2 years additional procedural related costs linked to digitising the permit granting process may amount to a total of EUR20m. However, transformation costs are unlikely to be entirely met by local Government. Development of the platform could be led by the national Government and some or all of the related activities could be paid for under programmes linked to eGovernment for which EU funding is available. Even where the costs are born by local government, they could ultimately be recovered from ECN operators (and potentially others depending on the scope of the system) in permit application fees.

The implementation of a uniform EU-wide system for (minimum) permit exemptions, which goes beyond the current exemptions applying to SAWAP under Article 57 of the EECC, may also give rise to short term implementation costs, since local authorities need to adapt existing processes and systems to reflect these new exclusions. For example, a local authority representative interviewed for the study suggested that 50 FTE had been involved in establishing processes for the handling of Article 57 EECC by local authorities within their medium sized country, equivalent to a cost of around EUR2.6m per annum over a number of years. They expressed concerns that a similar cost could be incurred if the BCRD expands on Article 57 EECC and is associated with additional permit exemptions as well as expanding on the access requirements for public facilities. If the estimated EUR2.6m cost per annum were replicated across the EU 27 and the process took 3 years overall, then a total cost of EUR210m might be incurred.

However, this estimate is likely to be too high. A number of Member States already have extensive exemptions for the deployment of ECN networks, while other Member States are planning permit exemptions in the context of the implementation of their Roadmaps under the Connectivity toolbox, 224  to the extent that only 5 Member States have not announced any plans to implement this measure. The costs are likely to be further reduced as a result of the changes to IT systems and processes that have already been introduced in the context of implementing permit exemptions for small cells under Article 57 EECC and the parallel requirement to introduce digital systems for permit granting. Ultimately, if 10 Member States are required to introduce or change existing permit exemptions as a result of new requirements for permit exemptions at EU level, and if they each require 5 FTE to do so, the total additional cost would be approximately EUR2m. 

It is possible that aligning timeframes to grant Rights of Way and permits might also entail an initial set-up cost for public authorities as they adapt internal procedures. However, especially in cases where it is the same authority which is responsible for both granting Rights of Way on public property and permits (e.g. a local public authority), there should be some efficiencies associated with this alignment from an operational perspective. On the other hand, where there are different bodies involved, more resources might be required as the alignment would require co-ordination between the bodies, and the potential need to resolve disputes if there are differences of view between the parties. On balance, it is reasonable to expect that the effect overall in terms of ongoing administrative costs for public authorities of an alignment between RoW and permit granting processes would be neutral, but with differences between Member States depending on the starting point. 

The requirement for local public authorities to provide a declaration of completeness for permit applications within a given period may require changes to the prioritisation of resources to ensure that this initial step is completed in the required timeframe. However, if tacit approval is introduced at the same time (see benefits), this could allow resources to be refocused without the need to increase overall resourcing for permit granting activities relating to ECN.

The potential for ECN operators to sue for damages in case permit granting applications exceed the required period is not expected to give rise to major new costs because other measures are likely to significantly reduce the number of permit applications (exemptions) and aid compliance with deadlines where permits are required (digital platforms, tacit approval), decreasing the probability that the required period is exceeded.

Requirements to limit charges for permit applications to administrative cost would only affect those authorities where there is not already a requirement of this nature, and where costs are currently above administrative cost. It is not possible to quantify the impact of this measure.

Provision of information about non-network public facilities to the SIP

The expansion of the SIP to include information about public non-network facilities is likely to entail implementation and recurring costs for the diverse set of bodies which hold information about public assets, including local authorities. The administrative costs are likely to be most significant in cases where information about public assets is not yet available in electronic form or where the format of the information is not consistent. Given historic experience with SIPs, the process of integrating information on street furniture, public and commercial buildings is likely to take considerable time. In view of these cost and time implications for public authorities, it would be necessary to clearly define (at Member State level) which information should be provided and limit the inclusion of information to non-network facilities which are likely to be useful for the purposes of ECN network deployment. For example, it may not be proportionate to require the inclusion of street furniture which is not capable of accommodating 5G small cells due to power or weight restrictions. 225 In addition, if information about public sector facilities is readily available in a separate SIP (distinct from the SIP established under the BCRD), it may not be proportionate to require it to be integrated into a single SIP, as the same result could be achieved by a less intrusive measure, i.e. including links to the websites where that information can be found.

Provision of access to non-network facilities

As the new rules and Guidelines on access to physical infrastructure will encompass access to non-network physical infrastructure, including assets owned by local public authorities, local public authority representatives will be called upon to contribute to the development of these guidelines. It can be assumed this would involve similar resources (from representative bodies) as has been assumed for those applicable to other stakeholders, i. e. around EUR2.8m. Local public authorities could also usefully contribute to the guidelines concerning civil works co-ordination.

Furthermore, each municipality and regional authority is likely to require resourcing to handle the expected additional requests for access to non-network public facilities, which would be included in the BCRD under the preferred option. However, some requests of this kind (relating specifically to SAWAP and the facilities listed in the EECC) would arise in conjunction with Article 57 EECC, regardless of any amendment to the BCRD, and thus the effect of the preferred option would only relate to any additional requests not falling within the scope of Article 57. Moreover, it should be noted that requests for access to public infrastructure would be likely to occur in connection with 5G deployment (for small cells, including but not limited to SAWAP and other network elements) irrespective of whether public authorities have an obligation to handle these requests under the BCRD or not. It is therefore not clear that the extension of access obligations to non-network public facilities would by itself generate additional administrative costs that would not otherwise be incurred by the public sector or (if requests from public authorities are refused) by private property owners. These administrative costs are likely to be recoverable from access seekers and thus it is access seekers that would ultimately bear the burden of their request.

Moreover, the preferred option envisages a scenario whereby public authorities could appoint a co-ordinating body to develop standard contracts and manage contacts between access seekers and public property owners. It seems likely that this would generate considerable efficiencies and cost savings if it avoids even a fraction of the resources that would otherwise be spent by individual local authorities, noting that there are a total of 87,182 municipalities across the EU. 226 For example an office staffed by an average of 2 FTEs to support the co-ordination of access requests to public bodies (similar to the current average resourcing of DSBs in the EU), would cost a total of EUR2.8m across the EU 27, 227 whereas if each local authority saves 0.5% of an FTE through the introduction of standardised processes and a co-ordinating body for network operators, this would save around EUR14m. 228 Thus, it seems reasonable to expect that the introduction of a co-ordination mechanism as recommended in the preferred option would reduce costs compared with a status quo in which multiple requests for access to public facilities are made, but no co-ordination mechanism exists.

Whilst it is possible that local authorities could receive lower fees for access to public facilities due to the introduction of guidelines for access to such facilities and associated enforcement by DSBs, the introduction of a system to access public facilities alongside dispute resolution procedures could also increase demand of the use of public facilities by ECN operators relative to the use of privately owned facilities. This could lead to a new revenue stream for these facilities which could be beneficial for local authorities. The effects and direction of the net impact would depend on the nature of the rules and guidance concerning wholesale charges for access to public facilities.

Pro-active notification of civil works

The obligation to provide proactive notification for planned civil works, might affect local public authorities in their capacity as “network operators”. However, this requirement is unlikely to give rise to significantly increased costs for local public authorities in view of the fact that local public authorities would normally be expected anyway to give advance notice of roadworks. Some adaptations might be required however to agree on a common format and procedure for notification for the purposes of possible civil works co-ordination.

Monitoring

Reporting by local public authorities concerning use of public facilities and permit granting may require the establishment of reporting mechanisms and online tools with which to gather information. These could nevertheless be developed at the same time as other digitisation measures such as the provision of digital records to the SIP and the development of digital permit granting platforms. It can be assumed in any event that local public authorities have a record of the number of permits granted of differing types. Standardising the format for reporting and including information concerning the timeframe should not only beg useful for the evaluation of the revised BCRD but also assist local public authorities in evaluating administrative efficiency.

Information will be needed concerning newly built apartments and major renovations in the context of assessing the effectiveness of measures on in-building infrastructure and wiring. There may be other reasons for local public authorities to ensure that such information is recorded on a standardised basis, since information about renovations is also relevant to green building targets, 229 and thus significant incremental costs are not expected.

Overview

An overview of the potential scale of costs for national, regional or local public authorities resulting from the preferred option compared with the status quo is provided in the following table. It should be noted, however, that a large portion of this cost relates to provisions in the preferred option to digitise and improve processes for permit granting, which could be provided in part by national administrations and/or supported by EU funding on digitisation.

Estimated administrative costs to national, regional or local authorities linked to the preferred BCRD option.

Source: support study

7.3.Benefits on national, regional or local public authorities

National, regional or local authorities are not the direct beneficiaries of the revised legal instrument. However, introducing the required measures could bring benefits to the efficiency of these authorities, notably local authorities, in the medium to long term and contribute to their provision of value added services to their local communities.

Regarding permit granting procedures, a number of public authorities which have implemented a digital platform have observed that this led to administrative efficiencies in the processing of individual permit applications, which presumably could also translate into cost savings or the reallocation of municipal resources to other services. For example, the Gigabitbüro in Germany reports that following the implementation of digital systems by a region in Northern Germany, the time taken for building permits was reduced by 30%. 230 According to Digital Denmark digitisation saves 296 million euro per year, Ministries in Denmark have reduced case processing time by 30% and transparency in Ministries and organisations increased by 96%. 231 Meanwhile, in Ireland, the MapRoad Roadworks Licensing (MRL) system has contributed to a turnaround time of just 30 days for the majority (80%) of licences for which applications were received, with an overall average of 17 days in 2019. 232 Public authorities in Lithuania also report that their digital permit granting system allows for permits to be processed for just EUR100 per application.

It should also be noted that the provisions under the preferred option to harmonise at EU level further categories of permit exemptions (beyond SAWAPs) and to mandate tacit approval (where possible) should in principle reduce the administrative burden on local public authorities by reducing the number of required permits and by limiting the need for proactive decisions. If the average number of permits requested per Member State per year under the status quo is 7,500 233 and the widening of permit exemptions leads to a reduction in the number of permits required by around 20% (reversing increases in applications that might otherwise have incurred in connection with the deployment of 5G mid-band infrastructure (including, but not limited to SAWAP)), and assuming that processing each remaining permit application costs EUR100 following the implementation of digital platforms (rather than an estimated EUR130 in the status quo), then savings of around EUR9.5m annually could be achieved by local public authorities compared with the status quo across the EU (or EUR3.5m if one takes into account only the reduced costs in the approximately 10 countries 234 which have not yet announced concrete plans to digitise their permit systems and/or introduce wide permit exemptions). 

As previously noted, the consolidation of processes for RoW and permits, when conducted by the same authority could also give rise to cost savings, once the necessary procedural changes have been made.

Regarding the provision of information on non-network public facilities, it should be noted that public authorities which are not yet producing electronic records might benefit from the availability of information about public facilities in an electronic and possibly geo-referenced format in relation to their other tasks, too, such as maintenance of street furniture, or provision of new services to citizens in the context of smart city developments. Indeed, the digitisation of records and updating of public facilities to be able to accommodate ECN equipment could form part of a smart city strategy, which could in turn contribute to improvements in citizens’ welfare as well as potentially to economic growth. 235

Likewise, the provision of access to public facilities might increase available revenues for those facilities, enabling investment in more modern facilities, although this potential benefit would depend on the terms of access to public facilities.

The provision of pro-active notification of planned works to foster civil works co-ordination could limit the need to process multiple applications for civil works in the same area and limit disturbance for local residents. In addition, depending on the applicable guidance concerning cost allocation, it is possible that increased use of civil works co-ordination could reduce the costs of roadworks for local authorities or other authorities responsible for maintaining transport infrastructure in their capacity as transport network operators.

An overview of the benefits is provided below.

Expected benefits to national, regional or local authorities linked to the preferred BCRD option.

Source:support study

8.Implications for national administrations, Dispute Settlement Bodies and SIP management authorities

8.1.Obligations impacting national administrations, DSBs and SIP management authorities

The preferred option would require a number of adaptations to the activities of national administrations, DSBs, SIP management authorities and potentially other Government agencies. These include:

·Contribution to the development and enforcement of EU Guidelines concerning PIA and civil works co-ordination.

·Dispute resolution concerning access to public non-network public facilities (beyond the disputes arising in connection with Article 57 EECC)

·Requirement for public bodies to enter information about existing physical infrastructure on a SIP as well as elaboration of the SIP to include information about non-network public facilities, geo-referencing, pro-active notification of planned civil works, and co-ordination between the different SIPs

·Contribution to the development of national standards for in-building infrastructure and EU guidelines concerning access to in-building infrastructure.

·Contribution to the development of streamlined processes for permit granting (including consistency at national level, exemptions, tacit approval and alignment of RoW and permit granting timescales) and the development of a digital platform.

·Costs associated with monitoring

8.2.Costs for national administrations, Dispute Settlement Bodies and SIP management authorities

Costs associated with dispute resolution and associated Guidelines on access to physical infrastructure and civil works co-ordination

Expanding the scope of BCRD access obligations to cover non-network elements could lead to additional administrative costs for DSBs as a result of the expansion in their remit and the ensuing increase in the range and number of disputes. However, it should be noted that such costs would be additional to the status quo only to the extent that they result in requests for access to non-network public facilities (and associated dispute resolution where terms are not agreed) for assets that go beyond those covered in Article 57 of the EECC. This would likely concern in particular to seek access to rooftops (as not expressly covered under the transposition of Article 57) and to facilities which do not fall within the category of physical infrastructure suitable to install SAWAPs under the EECC. 236  

As noted in the BCRD Evaluation report study, 237 based on responses to a questionnaire from national administrations, it is estimated that around 2.5 FTE per DSB on average have been engaged in handling access to physical infrastructure disputes, amounting to 70 FTE across the EU27. If DSBs are additionally required to handle disputes about access to public non-network infrastructure, this might reasonably be expected to increase the PIA-related caseload by up to 1 FTE per DSB – i.e. potentially an additional 27 FTE. However, it is possible that around half of this increase (i.e. 13.5 FTE) might have been anticipated in the context of the implementation of Article 57 EECC, as a result of DSBs resolving disputes around access to public facilities suitable for the deployment of SAWAP.

In addition, by providing greater clarity to stakeholders engaged in commercial negotiation, the introduction of EU-level Guidelines on access to physical infrastructure, civil works co-ordination and in-building access to physical infrastructure could reasonably be expected to reduce the number of disputes and their complexity and therefore reduce resourcing requirements amongst DSBs compared to a situation where decisions are taken on a case-by-case basis at national level. If as a result of the Guidelines, only 10 FTE (rather than an estimated 13.5 as previously noted) are required by DSBs across the EU to handle disputes regarding access to non-network public infrastructure, and if clarity also reduces disputes concerning access by network infrastructure by a further 2 FTE EU-wide, the additional cost for operating the DSB compared with the status quo would be around EUR0.4m per annum EU-wide.

As regards the cost of developing the guidelines themselves, if an average of 0.5 FTE is engaged in providing input to these Guidelines in each of the Member States over the duration of the process, 238 the total “set-up” cost to national administrations/DSBs would be around EUR0.7m, of which the majority may be focused on access to physical infrastructure. 239

Costs associated with standards for in-building infrastructure

Another provision that would incur administrative costs is the requirement to introduce standards at national level for in-building physical infrastructure including fibre 240 . Given the technical nature of these standards, implementing this requirement could involve a number of senior experts working sporadically over a period of 1-2 years. For example, if the development of standards for in-building infrastructure involved 1 FTE in 14 Member States working the equivalent of fulltime for 1.5 years in conjunction with representatives from the construction sector and from ECN operators, the total cost would be around EUR1.1m EU-wide. 241  

There will also be costs associated with the ongoing monitoring of compliance with standards and associated enforcement action. However, additional costs will only be incurred in countries which do not currently have standards for in-building infrastructure and associated compliance regimes, and costs could be limited through the use of self-certification. If nonetheless, an average of an additional 3 FTE are engaged in monitoring and compliance with in-building infrastructure standards in 14 Member States, this would result in recurring costs of around EUR2.2m.

Costs associated with SIP development

Set-up costs would be incurred for SIP management authorities under the preferred option to upgrade transparency requirements to provide for fully digitised platforms for the SIP, gather information from all network operators on the SIP (rather than only public information held by public bodies) and information from public bodies holding non-network public facilities, as well as to establish georeferencing and pro-active notification of planned civil works.

The obligation for SIP platforms to be fully digitised will entail investment in software to enable information to be directly posted onto the SIP by information providers rather than processed by hand, as well as ensuring that relevant information is shown automatically and digitally, e.g. on a map, in response to a user query. Examples of digital platforms include SIPs established in Germany and Portugal. Although precise information about the number of platforms which are not yet fully digitised is not available, it seems likely that a number of SIPs would require updating to bring them into line with this requirement.

According to information provided by national administrations, set-up costs for SIPs vary widely across the EU from EUR15,000 to more than EUR2.5m. 242 It can be assumed that many of the SIPs today (and especially those involving higher set-up costs) are already fully digitised, and Roadmaps provided by national administrations show that many SIPs already include or will be updated to include geo-referencing and the pro-active notification of planned civil works. 243 Nevertheless, it is possible that additional expenditure would be required for some of the SIPs which were less costly and used manual back-ends. Effective platforms would also need to be established in the few countries which do not yet have an operational SIP. 244 If EUR250,000 is needed on average to upgrade or build new SIPs to meet the requirements of full digitisation across the EU, as well the other requirements (taking into account that some countries already meet or are planning to meet this criterion while in others investment would be needed to meet the conditions of the preferred option), the total one-off cost of updating SIPs for SIP management authorities across Europe would be around EUR6.75m.

These upgrades could also incorporate introducing the potential to accept information from network operators and public authorities directly for those few countries in which network operators do not already submit information to the SIP. A fully digitised SIP should lead to reduced operational costs. However, increased efforts may be needed to ensure compliance with requirements to submit information, including in countries where network operators have not yet been directly required to provide this information. Recurring resources employed for SIP management range currently from 1FTE to more than 20FTE in Germany, with an estimated average of around 5 FTE. If on average an additional 2.5 FTE are required in each Member State to support the operation of the expanded SIP and associated enforcement, the preferred option could be associated with additional costs of around EUR3.5m.

Costs associated with streamlining the permit granting process

National administrations and/or DSBs would be involved in the development of EU-level exemptions for permit granting. If 1 FTE is involved over a 2 year period per Member State, the cost for this activity would be around EUR2.8m.

National administrations, and potentially also other bodies such as DSBs, BCOs and/or SIP management bodies, are likely to need to co-ordinate or support local and regional authorities in the development of nationwide consistent and streamlined processes for permit granting and exemptions as well as the development of digital platforms for permit granting. The costs associated with developing the platforms and processes are noted in the section relating to “local authorities”. The proportion of costs attributed to different types of authorities (and the source of the funding, including potential use of EU funding to support such initiatives) is likely to vary between Member States.

Monitoring

A pre-requisite for the effective monitoring of the revised BCRD is the centralised gathering of data per Member States by DSBs, and where applicable SIP management authorities, an exercise which has not yet taken place. 245 Hence, it is necessary for Member States to assign responsibility for the centralised gathering of data concerning permit granting and civil works co-ordination. This could for example be done by the same body as might be assigned for the co-ordination of requests for access to public facilities, or the BCO or DSB.

DSBs could limit the incremental cost of data gathering exercises by timing data gathering to align with other data gathering exercises, e.g. in the context of market information or reviews. In cases where it is clearly indicated by ECN operators that they are reliant on certain key providers of access or co-ordination under the BCRD, such as a major utility, information could be collected from this source rather than from multiple ECN operators, in order to reduce the administrative cost of data gathering.

Information about the number of buildings with in-building FTTH should be available from the authority responsible for enforcing building standards and regulations, and could be obtained by examining the number of buildings receiving certification (or self-certification).

Overall, the cost of data gathering in relation to the BCRD can in general be limited by integrating data collection in the course of regular data gathering, monitoring and enforcement activities.

Overview

An overview of the costs of the preferred option to national administrations, DSBs, SIP controllers and/or other Government agencies are shown in the following table. The total set-up costs of the reforms are estimated at roughly EUR8.1m, with recurring annual costs of around EUR7.4m EU-wide. These costs would however not be evenly distributed, but would depend on the current status of SIP digitisation within the Member States and the existence (or otherwise) of standards for in-building infrastructure.

Estimated costs to national administrations, DSBs, SIP controllers linked to the preferred BCRD option.

Source: support study

8.3.Benefits for national administrations, Dispute Settlement Bodies and SIP management authorities

The main direct benefit to national administrations of the preferred option is the potential to reduce the subsidies required to achieve extensive deployment of FTTH. In particular, it is estimated that the preferred option could allow savings in subsidies of EUR2.4bln across the EU.

If they choose to reinvest these savings to increase VHCN coverage, national administrations could also derive benefits (including consumer satisfaction) from the potential for increased VHCN coverage and take-up, acceleration of 5G IoT applications and the ensuing boost to GDP and jobs as well as specific reductions in inequality (in particular between urban and rural areas).

In addition, DSBs could also benefit from administrative cost savings resulting from EU-level rules and Guidelines, which should increase legal certainty and thus reduce the number and complexity of disputes, although resourcing needs for DSBs are expected to increase overall due to the expansion of the scope of access to physical infrastructure to cover non-network facilities. Investment in digitisation should also reduce administrative costs for those SIP management authorities which currently rely on a manual system to process and update information.

Expected benefits to national administrations, DSBs, SIP controllers linked to the preferred BCRD option.

Source: support study

9.Implications for customers

9.1.Obligations impacting consumers

The proposed changes to the BCRD would not introduce any obligations directly impacting consumers.

9.2.Costs for consumers

The only provision in the preferred option which could give rise to costs for consumers is the obligation to install FTTH in-building for new and majorly renovated buildings. Although the cost of this element may not be expressly identified, it is likely that the cost to construction companies of meeting this obligation would (at least in part) be passed on to consumers through increased pricing for the property or in rental charges. The cost of equipping a building with the necessary in-building ducting and wiring is estimated at EUR200 on average on the basis of interviews with ECN operators. However, there is already an obligation within the BCRD to equip new and majorly renovated buildings with in-building infrastructure (ducts and cable trays) which is estimated to account for at least EUR150 of this cost. Thus, the incremental cost may be around EUR50 per household purchasing or renting a new or renovated building.

However, the pre-installation of in-building wiring is also likely to reduce the connection charge for a FTTH-based service by a similar amount and by 2030 more than 90% of households are expected to be passed by FTTH (or up to 96% if the cost savings from the BCRD are reinvested in FTTH), and legacy infrastructure is expected to have been largely switched off (in the case of copper) or upgraded to FTTB (in the case of cable). Thus, the obligation to make new or renovated buildings FTTH-ready is unlikely to lead to additional costs, but rather influence the timing of costs for consumers, resulting in a payment during the building or renovation phase rather than potentially in connection with the subscription to a broadband service..

9.3.Benefits for consumers

Consumers should experience direct benefits from the preferred option linked to the requirement to install in-building physical infrastructure and notably wiring. The availability of in-building wiring could accelerate the process of subscribing to a Gigabit-capable broadband service, and reduce the connection costs for consumers at the point of subscription. Consumers in more densely populated areas could also benefit from increased competition in Gigabit-capable broadband services, as – by removing what would otherwise be a significant element (and bottleneck) of the deployment cost - the availability of in-building wiring should improve the business case for alternative providers of Gigabit services to deploy to the household concerned. The introduction of standards for in-building physical infrastructure and wiring should also remove the need for costly duplication of in-building infrastructure or renovation of in-building infrastructure in cases where the initial installation was not suitable for FTTH, thereby reducing the costs to consumers of subscribing to an alternative infrastructure-based Gigabit broadband provider.

Another important direct benefit of the measures concerning access to physical infrastructure and civil works co-ordination is that it should reduce the noise and disruption associated with construction works, notably due to the reduction of the number of civil works undertaken.

Consumers are also likely to experience significant indirect benefits from the preferred option. The nature of these benefits will depend on how cost savings achieved as a result of preferred option are distributed.

For example:

·Cost savings to ECN operators could be passed on to consumers through lower prices for broadband, while reductions to the State Aid and/or EU funding required could be used to fund increased VHCN coverage or to subsidise other infrastructure or services.

·If cost savings resulting from the preferred option are reinvested in VHCN, consumers (especially those in rural areas) could benefit from improved coverage and better quality broadband. Modelling carried out as part of the support study suggests that, if the funds saved are reinvested in FTTH, this could result in an additional 6.5% of households having access to FTTH (taking total household coverage of FTTH to 96.5% by 2030). Alternatively, even greater coverage could be achieved of VHCN if the saved funds are reinvested in 5G FWA. This could result in 99.1% coverage of VHCN by 2030 with 9.1% provided on the basis of FWA.

Knock-on effects for consumers, particularly benefitting those in rural areas, include improved job opportunities and economic prosperity. The increased network reach of Gigabit infrastructure has also been shown to significantly support the provision of advanced healthcare, education and social services to more remote areas. These benefits are further elaborated in the Impact Assessment (Chapter 7).

Overview of estimated benefits to consumers – preferred option.

Source: support study

10.Implications for SMEs

10.1.Obligations impacting SMEs

The proposed changes to the BCRD would not introduce any obligations specifically impacting SMEs as purchasers of Gigabit services. SMEs acting as ECN operators or other (non-ECN) network operators may be impacted as described in the sections relating to those categories of stakeholders. SMEs acting as ECN operators or other network operators may in particular include certain small scale local fibre investors or local utilities which are present in some Member States. Those effects that are specific to SMEs acting as ECN or other network operators are highlighted in this section.

10.2.Costs for SMEs

SMEs acting as ECN operators would be subject to the same costs that apply to other ECN operators, except where/if proportionality measures are introduced to reduce the burden on smaller operators. Requirements to submit information about existing infrastructure directly to the SIP and to proactively notify planned civil works are likely to be in place for SME ECN operators (as for other operators) in many Member States already, 246 while obligations for information to be in georeferenced format are also in place or planned in a number of Member States. The cost to ECN and non-ECN network operator SMEs of meeting these requirements could be reduced if provisions are made to exempt certain players and/or size of works from obligations on the basis of proportionality, which may require an assessment of the cost to the players concerned of providing this information in relation to the demand (or absence of demand) for access to this information. The cost to SMEs of providing the information may – despite their limited administrative staff - however be low in cases where they already have the data available in the appropriate georeferenced format.

SME network operators may choose to limit their involvement in the development of Guidelines and standards or rely on trade associations to provide input to these developments on their behalf, in order to reduce the administrative burden applying to them.

As regards indirect costs, some very localised SMEs acting as ECN operators may face increased competition from larger ECN operators or even other SMEs operators active in the same market if the simplification of permit granting procedures and RoW facilitates expansion by other operators.

SMEs acting as purchasers of Gigabit services would be subject to the same costs as apply to other consumers. Specifically, SMEs may be charged by construction companies or building operators for the cost of installing FTTH in-building infrastructure and wiring. As previously noted, the cost of equipping a building with the necessary in-building ducting and wiring is estimated at EUR200 on average on the basis of interviews with ECN operators. However, there is already an obligation within the BCRD to equip new and majorly renovated buildings with in-building infrastructure (ducts and cable trays) which is estimated to account for at least EUR150 of this cost. Thus, the incremental cost of installing in-building physical infrastructure and wiring may be around EUR50 per SME purchasing or renting a new or renovated building.

However, the pre-installation of in-building wiring is also likely to reduce the connection charge for a FTTH-based service by a similar amount and by 2030 more than 90% of premises are expected to be passed by FTTH (or up to 96% if the cost savings from the BCRD are reinvested in FTTH), and legacy infrastructure is expected to have been largely switched off (in the case of copper) or upgraded to FTTB (in the case of cable). Thus, the obligation to make new or renovated buildings FTTH-ready is unlikely to lead to additional costs, but rather influence the timing of costs for SMEs, resulting in a payment during the building or renovation phase rather than in connection with the subscription to a broadband service, if the broadband service provider chooses to apply charges in full.

10.3.Benefits for SMEs

Certain SMEs acting as ECN operators (those which are independent from utilities) are likely to have limited physical infrastructure of their own. These players are likely to be the primary beneficiaries of the improved access to physical infrastructure and associated cost reductions which are associated with the preferred option. SMEs acting as ECN operators and other network operators could reap benefits from the development of clearer rules and guidelines around access to physical infrastructure and civil works co-ordination, as this could lead to the reduction in the need for costly dispute resolution and to accelerated access to physical infrastructure and civil works coordination.

In addition, SMEs should benefit from reduced overbuild of their VHCN networks in less dense areas due to improved clarity concerning their potential to deny the possibility for civil works co-ordination (in cases where the requesting party had not previously announced their intention to deploy or where they offer alternative access options). Clearer rules and guidelines concerning wholesale pricing of access to physical infrastructure may also ensure that the impact on the business case for SMEs deploying VHCN of offering access to physical infrastructure is consistently and coherently taken into account across the EU. Many of the other measures under the preferred option which will benefit ECN operators more generally (such as improvements to access to public non-network facilities and permit granting procedures) are likely to provide significant benefits to SMEs acting as ECN operators because today, due to their small scale, such operators may be disproportionately impacted by administrative costs, complexity and delays associated with obtaining permits, Rights of Way and access to public facilities. Indeed, reducing the administrative burden in these areas could facilitate SMEs which currently focus in specific local areas to expand their network to other regions.

SMEs acting as consumers of Gigabit broadband services should experience direct benefits from the preferred option linked to the requirement to install in-building physical infrastructure and notably wiring. The availability of in-building wiring could accelerate the process of subscribing to a Gigabit-capable broadband service, and reduce the connection cost at the point of subscription. SMEs in more densely populated areas could also benefit from increased competition in Gigabit-capable broadband services, as – by removing what would otherwise be a significant element of the deployment cost - the availability of in-building wiring should improve the business case for alternative providers of Gigabit services to deploy to the premise concerned. The introduction of standards for in-building FTTH ready physical infrastructure should also remove the need for costly duplication of in-building infrastructure or renovation of in-building infrastructure in cases where the initial installation was not suitable for FTTH, thereby reducing the costs to small businesses of subscribing to an alternative infrastructure-based Gigabit broadband provider.

SMEs are also likely to experience significant indirect benefits from the preferred option. The nature of these benefits will depend on how cost savings achieved as a result of preferred option are distributed.

For example:

·Cost savings to ECN operators could be passed on to consumers including SMEs through lower prices for broadband, while reductions to the amount of State Aid and/or EU funding required could be used to fund increased VHCN coverage or to subsidise other infrastructure or services

·If cost savings resulting from the preferred option are reinvested in VHCN, SMEs (especially those in rural areas) could benefit from improved coverage and better quality broadband. Modelling from the study team suggests if the funds saved are reinvested in FTTH, this could result in an additional 6.5% of premises having access to FTTH (taking total household coverage of FTTH to 96.5% by 2030). Alternatively, even greater coverage could be achieved of VHCN if the saved funds are reinvested in 5G FWA. This could result in 99.1% coverage of VHCN by 2030 with 9.1% provided on the basis of FWA.

Knock-on effects for SMEs, particularly affecting those in rural areas, include the potential for productivity gains and improved access to the digital economy. SMEs could also benefit from the accelerated deployment of mid-band 5G, which may provide scope for additional and enhanced IoT services.

Overview of estimated benefits to SMEs – preferred option.

Source: support study

11.Relevant sustainable development goals

No significant impact of the review of the BCRD regarding the UN sustainable development goals can be anticipated though, by fostering widespread advanced connectivity, it would indirectly constitute an enabler towards some of the goals, mainly industry, innovation and infrastructure (goal 9) as well as sustainable cities and communities (goal 11), climate action (goal 13), good health and well-being (goal 3), quality education (goal 4), reduced inequality (goal 10), clean energy (goal 7), and decent work and economic growth (goal 8).

Annex 4: Detailed description of the four policy options

Option 1 would involve a limited set of changes focused on (i) update of the scope to more advanced networks, (ii) clarification of certain provisions/obligations, which may have been implemented in differing ways across the Member States; and (iii) mandating certain measures that are currently voluntary, but which the assessment of detailed options, including Member States Connectivity Toolbox best practices suggests could contribute to achieving effective outcomes. This option includes:

·Objectives (Article 1)

·Updating the Directive objectives so that they are aligned with the EECC and the new Digital Decade connectivity targets, in particular replacing ‘high-speed electronic communications networks’ with ‘very high capacity networks’.

·Clarifications on existing provisions (Articles 3, 5 and 7)

·Clarifying that physical infrastructure assets which are subject to access obligations under the EECC or under state aid obligations would not also be subject to access obligations under the BCRD;

·Clarifying that the obligation to meet reasonable requests for civil works coordination is associated with civil works projects which are wholly or partially publicly financed, and does not refer to the public/private character of the ownership of the network operator concerned;

·Clarifying that obligations related to permits including the requirement that permits should be granted within 4 months from the receipt of the application, and should include all permits necessary to deploy and operate electronic communications networks.

·Transparency for physical infrastructure (Article 4)

·Mandating the provision of information held in electronic format by public bodies on existing physical infrastructure of any network operator via the SIP, thereby making the current voluntary provision obligatory.

·Permit granting (Article 7)

·Mandating that permit applications should be submitted by electronic means and that operators can claim compensation for damages incurred as a result of delays in the permit granting procedures, making the current voluntary provisions concerning permit granting obligatory.

Option 2 would include all the amendments associated with option 1. It would additionally provide that VHCN-related assets and deployments should be excluded from access obligations and obligations to co-ordinate civil works (to avoid disincentivising network investment) and at the same time extend the scope of the directive to enable ECN operators to benefit from access to and information regarding non-network elements owned or controlled by public authorities, which are suitable for the deployment of ECNs. It would also address requests of ECN operators to strengthen obligations concerning the timing of the processing of permits and would require Member States to define the scope of deployments which should be exempted from permits.

Specifically, in addition to the provisions described in option 1, option 2 would involve the following measures.

·Access to existing physical infrastructure (Article 3)

·Extending the scope of the BCRD access obligations to cover non-network physical infrastructure owned or controlled by public authorities which is suitable for the deployment of ECN (including rooftops of public buildings, street furniture, etc.) and which is suitable for the deployment of ECN, with some exemptions to ensure proportionality. Member States could optionally facilitate the implementation of this measure by appointing a coordinating body which could develop model contracts and facilitate contracts and access;

·Exempting physical infrastructure assets that have been deployed for the purpose of hosting a VHCN from the obligation to provide access to existing physical infrastructure.

·Transparency for physical infrastructure (Article 4)

·Providing for the inclusion of information about non-network physical infrastructure owned or controlled by public authorities within the SIP (reflecting the extension of physical infrastructure access obligations to include these assets), but with some exceptions where needed to ensure the proportionality of these obligations 247 .

·Coordination of civil works (Article 5)

·Exempting VHCN deployments from the obligation to coordinate civil works.

·Permit granting (Article 7)

·Establishing an interim deadline within which permit granting authorities should determine the completeness of applications, and requiring Member States to specify in advance the reasons justifying an extension of the deadlines; 

·When both permits and right of ways are necessary, requiring that a decision on both is made within the same 4-month deadline as from the reception of a complete application;

·Requiring Member States to define the scope of deployments which may benefit from an exemption from permits.

Option 3 would include all the amendments associated with option 1 and as option 2 would also involve an adjustment of the scope of the current BCRD, extending access and transparency obligations to assets held by public bodies and strengthening permit provisions. However, instead of exempting VHCN deployments/assets from physical infrastructure access and civil works co-ordination obligations, it would address concerns about investment incentives (as well as about potentially excessive wholesale charges) through legal provisions accompanied by more detailed guidance. There would be EU level guidance for access and civil works related aspects, fostering more harmonisation, and at the national level for access to in-building physical infrastructure to facilitate adaptations based on national circumstances. On transparency and permit granting, this option would build on options 1 and 2, with new provisions aimed at fostering the implementation of best practice solutions (provision of information by network operators, proactive notification of civil works, georeferenced information, digitised SIPs for physical infrastructure and civil works where possible interconnected). It would also mandate national standards.

This option would also establish consistent rules and processes on permit granting at national level supported by a ‘one-stop-shop’ based on a single national digital platform, tacit approvals of permit requests, and limit permit fees to the level of administrative cost. Deployments subject to exemption from permit granting would be specified at EU-level, thereby addressing the problems of high complexity, timeframes and costs to obtain permits in a more harmonised manner. Finally, in order to address problems of lack of or access to suitable in-building infrastructure and to ensure every EU household has access to Gigabit connectivity, this option would mandate fibre in-building in every new (or majorly renovated) household as well as standardisation of in-building physical infrastructure at national level and guidance on access to in-building infrastructure at EU level (together and consistent with that of access to physical infrastructure).

Specifically, in addition to the measures already described in option 1, option 3 would involve the following measures:

·Access to existing physical infrastructure (Article 3)

·Extending the scope of the BCRD access obligations to cover non-network physical infrastructure owned or controlled by public authorities (including rooftops of public buildings, street furniture, etc.) and which is suitable for the deployment of ECN, with some exemptions to ensure proportionality. Member States could optionally facilitate the implementation of this measure by appointing a coordinating body which could develop model contracts and facilitate contacts and access;

·Specifying rules and developing guidance at EU level on the application of the provisions on access to existing physical infrastructure, which would elaborate on:

othe application of the ‘fair and reasonable’ access conditions including price with recommendations on how DSBs should set charges in different circumstances, with the aim of ensuring that wholesale charges are not excessive, while also taking into account the impact on the access provider’s business case when establishing access prices;

othe circumstances in which it would be reasonable for ECN operators to deny access to physical infrastructure on the basis that they provide an ‘alternative means of access’ which is available on ‘fair and reasonable conditions’;

·Transparency for physical infrastructure (Article 4)

·Providing for the inclusion within the SIP of information about non-network physical infrastructure owned or controlled by public authorities (reflecting the extension of obligations for access to existing physical infrastructure to include these assets), but with some exceptions where needed to ensure the proportionality of these obligations;

·Providing for the inclusion within the SIP of existing physical infrastructure by all network operators (public and private), with some exceptions to ensure proportionality;

·Requiring information in the SIP to be geo-referenced;

·Requiring that SIPs for existing infrastructure and planned civil works are set up as fully digitised platforms, interconnected where possible.

·Coordination of civil works (Article 5)

·Specifying rules and developing guidance at EU level on the application of the provisions on coordination of civil works, including in particular the apportioning of costs between the ECN operator requesting co-ordination and the network operator undertaking the civil works;

·Defining the circumstances in which civil works coordination can be denied; for instance in cases where suitable physical infrastructure is ensured and/or where there has been no prior interest to deploy in that area expressed by the requestor in the context of an Art. 22 procedure under the EECC or in the context of a state sid procedure.

·Transparency in civil works co-ordination (Article 6)

·Requiring both public and private network operators to proactively notify their planned civil works;

·Requiring information in the SIP to be geo-referenced.

·Permit granting (Article 7)

·Establishing an interim deadline within which permit granting authorities should determine the completeness of permit applications and requiring Member States to specify in advance reasons justifying an extension of the deadlines;

·When both permits and right of ways are necessary, requiring that a decision on both is made within the same 4-month deadline as from the reception of a complete application; 

·Mandating Member States to apply the principle of tacit approval after the 4 months deadline for permit granting is passed wherever feasible;

·Requiring Member States to ensure that permit granting procedures for the purposes of ECN deployment are processed and coordinated via a digital platform (‘one-stop-shop’), noting that such a platform should not necessarily be limited to ECN permits but could also be used for other sectors;

·Requiring Member States to ensure that any rules regarding permits for civil works (including rights of way) are nationally consistent and published in advance;

·Requiring charges for permit applications to be limited to administrative cost;

·Empowering the EC to define deployments which are subject to an exemption from the need for a permit.

·In-building physical infrastructure and access to in-building physical infrastructure (Articles 8 and 9)

·Mandating FTTH in-building wiring for new buildings and buildings subject to extensive renovation, subject to possible exemptions for MS in areas/cases where the obligation would be disproportionate;

·Requiring Member States to establish standards (at national level) and certification (allowing for self-certification) of in-building VHCN/FTTH-ready physical infrastructure for new and renovated buildings;

·Specify rules and develop EU level guidance on the application of the provisions on access to in-building physical infrastructure.

·Option 4 builds on option 3, but goes further in terms of EU harmonisation, and extends obligations under the Directive, such that obligations on civil works coordination would apply to privately financed as well as publicly financed projects, and obligations to provide access to non-network assets would apply to commercial actors as well as public bodies. It also sets ambitious goals regarding digitisation of digital platforms. Specifically, option 4 involves the following measures, in addition to those set out under option 1. This option would mandate the establishment of a combined single digital platform for existing physical infrastructure, planned civil works and, optionally, permit procedures. Finally, this option would mandate standardisation of in-building physical infrastructure at EU level.

·Access to existing physical infrastructure (Article 3)

·Extending the scope of the BCRD access obligations to cover non-network physical infrastructure owned or controlled by public authorities (including rooftops of public buildings, street furniture, etc.) and suitable for ECN deployment, with some exemptions to ensure proportionality, as well as assets owned by private entities which are suitable for VHCN deployment such as commercial buildings and non-network assets owned by tower companies. Member States could optionally facilitate the implementation of this measure by appointing a coordinating body which could develop model contracts and facilitate contacts and access. This measure goes beyond those outlined in options 2 and 3 through the inclusion of privately owned non-network assets.

·Specifying rules and developing guidance at EU level on the application of the provisions on access to existing physical infrastructure, which would elaborate on:

othe application of the ‘fair and reasonable’ access conditions including price with recommendations on how DSBs should set charges in different circumstances, with the aim of ensuring that wholesale charges are not excessive, while also taking into account the impact on the access provider’s business case when establishing access prices;

othe circumstances in which it would be reasonable for ECN operators to deny access to physical infrastructure on the basis that they provide an ‘alternative means of access” which is available on ‘fair and reasonable conditions’.

·Transparency for physical infrastructure (Article 4)

·Providing for the inclusion within the SIP of information about non-network physical infrastructure owned or controlled by public authorities as well as by private entities (reflecting the extension of physical infrastructure access obligations to include these assets as well as the extension of access obligations to private networks operators too), but with some exceptions where needed to ensure the proportionality;

·Providing for the inclusion within the SIP of existing physical infrastructure by all network operators (public and private), with some exceptions to ensure proportionality;

·Requiring information in the SIP to be geo-referenced;

·Requiring information about existing physical infrastructure and planned civil works to be consolidated into a single digital platform.

·Coordination of civil works (Article 5)

·Expanding the obligation to engage in civil works co-ordination to also cover privately financed civil works carried out by network operators;

·Defining the circumstances in which civil works coordination can be denied; for instance in cases where suitable physical infrastructure is ensured and/or where there has been no prior interest to deploy in that area expressed by the requestor in the context of an Art. 22 procedure under the EECC or in the context of a state aid procedure. This is already in option 3;

·Specifying rules and developing guidelines at EU level on the application of the provisions on coordination of civil works, including in particular the apportioning of costs between the ECN operator requesting co-ordination and the network operator undertaking the civil works.

·Transparency for planned civil works (Article 6)

·Requiring both public and private network operators to proactively notify their planned civil works;

·Requiring information in the SIP to be geo-referenced;

·Requiring information about existing physical infrastructure and planned civil works to be consolidated into a single digital platform.

·Permit granting (Article 7)

·Establishing an interim deadline within which permit granting authorities should determine the completeness of permit applications and requiring Member States to specify in advance reasons justifying an extension of the deadlines;

·When both permits and right of ways are necessary, requiring that a decision on both is made within the same 4-month deadline from the reception of a complete application;

·Mandating Member States to apply the principle of tacit approval after the 4 months deadline for permit granting is passed wherever feasible;

·Requiring Member States to ensure that permit granting procedures for the purposes of ECN deployment are processed and coordinated via a digital platform (‘one-stop-shop’), noting that such a platform should not necessarily be limited to ECN permits but could also be used for other sectors. Optional provision to integrate the processing of digital permit applications into the single digital platform for information on existing physical infrastructure and planned civil works;

·Requiring Member States to ensure that that any rules regarding permits for civil works (including rights of way) are nationally consistent and published in advance;

·Requiring charges for permit applications to be limited to administrative cost;

·Empowering the EC to identify deployments which are subject to an exemption from the need for a permit.

·In-building physical infrastructure and access to in-building physical infrastructure (Articles 8 and 9)

·Mandating FTTH in-building wiring for new buildings and buildings subject to extensive renovation;

·Standardisation at EU level and certification (possibly allowing for self-certification) of in-building VHCN/FTTH-ready physical infrastructure for new and renovated buildings;

·Define rules and develop EU-level guidelines on the application of the provisions on access to in-building physical infrastructure including the interpretation of fair and reasonable terms and conditions, including price.

Table: Summary of policy options in detail

Annex 5: Analytical methods

This annex describes the four steps used in the modelling that is referred in section 6, further details can be found in the support study.

The quantification of economic and environmental impacts associated with the different options for the revision of the BCRD is based on a four-step process as shown in the following diagram.

_______________________________________________________________________________

Source: support study

In the first step, the effects of the different policy options on infrastructure re-use and civil works co-ordination as well as the impact on the timing of VHCN deployment is assessed.

In a second step, these parameters are used as input to the WIK’s cost and viability model, which in turn provided estimates regarding the potential cost savings or increased VHCN (FTTH and 5G) coverage that could be achieved by 2030 as a result of the different options.

In a third step, it is estimated what the projected increases in VHCN coverage would mean for consumers in terms of the average speeds they would enjoy and the per user (and total bandwidth) that would be consumed.

In the finally step evaluates the:

·Implications of the increased speeds on macroeconomic outcomes such as GDP and jobs; and

·Implications of the increased bandwidth use alongside the increased re-use of infrastructure on environmental outcomes such as Greenhouse Gas Emissions

The results of the analysis as well as the high level assumptions underlying steps 1, 2 and 4, and detailed assumptions for step 3 are presented in chapter 7 of the support study.

Step 1: Estimating the impact of the different options on cost reductions and increased deployment

In this chapter, we describe the assumptions which were made concerning the effect of the different options on infrastructure re-use, civil works co-ordination and the speed of deployment.

Assumptions underlying the Impact Assessment models

An overview of the assumptions made concerning the impact of the different options on outcomes concerning infrastructure re-use and other factors is shown in the following table. The different elements of each option are listed alongside assumptions regarding the directional effects (showed using + and -). These are then used to adjust the model inputs for factors such as the proportion of shared ducts and poles, and civil works co-ordination, the wholesale charge for PIA, etc. References to small cells include but are not limited to small cells which fall within the definition of SAWAP under Article 57 EECC. The focus is on the effects of the BCRD review on FTTH and mid-band 5G deployment but note that it could also influence the ease of deployment of 5G in the millimetre wave band.

Table 18: Assumed effects of regulatory options in detail