Co-investments in new Very High Capacity Network elements

Following the adoption of the Directive (EU) 2018/1972 of the European Parliament and of the Council establishing the European Electronic Communications Code – the EECC – the Body of European Regulators for Electronic Communications (BEREC) was tasked with developing guidelines on the consistent application of the conditions and criteria to assess co-investments in new Very High Capacity Network (VHCN) elements, in accordance with the provisions of Art. 76 of the EECC. The BEREC guidelines were drawn up in close collaboration with the European Commission and informed by two workshops with stakeholder associations. The workshops were held to collect the stakeholders’ views on aspects to be covered in the guidelines and on specific issues related to these aspects. The guidelines were finally published by BEREC in December 2020 – the BEREC Guidelines to foster the consistent application of the conditions and criteria for assessing co-investments in new very high capacity network elements (Article 76(1) and Annex IV of the EECC).

The purpose of the above guidelines is to support the National Regulatory Authorities‘ (NRA) effective and consistent assessment of the conditions which co-investment offers must comply with, when commitments are being made by operators that are designated with Significant Market Power (SMP). Following the identification of the SMP operators in relevant markets susceptible to ex-ante regulation, those operators may offer commitments to co-investment in the deployment of new VHCN consisting of optical fibre elements up to end-user premises or base stations. Such co-investments may take the form of co-ownership or long-term risk sharing through co-financing or through purchase agreements, with various designs in practice. If the NRAs decide, based on their thorough assessment, that the co-investment offers comply with the provisions of paragraph 1 of Art. 76 and Annex IV of the EECC, then the proposed commitments will be made binding and no additional obligations subject to the network elements concerned will be imposed.

The most prominent aspects covered so far by BEREC on co-investments are as follows:

  • which VHCN fall within the scope of the said legal provisions;
  • what is considered “new“ for this aim;
  • the aspects relating to the timing for making an offer to co-invest;
  • which are the types of investments that are relevant;
  • which are the co-investment models that may be covered – such as joint-ventures, reciprocal access, one-way access;
  • detailed qualification of the specific criteria embedded in the legislation, namely relating to
    • (i) the openness of the offer and the lifetime of the networks,
    • (ii) access to be provided on fair, reasonable and non-discriminatory terms, as well as to the full capacity of the network elements,
    • (iii) the flexibility granted to the co-investors in terms of the value and timing of the participation,
    • (iv) reciprocal rights for the co-investors,
    • (v) the timeliness of the publication of the co-investment offer, and
    • (vi) the preservation of the market competitiveness.
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