(70) Aid has a social character for air and maritime passenger transport where it addresses the problem of steady
connectivity for residents of remote regions by reducing certain transport ticket costs for them. This may be the
case for outermost regions, Malta, Cyprus, Ceuta and Melilla, other islands which are part of the territory of a
Member State and sparsely populated areas. Where a remote region is linked to the European Economic Area by
several transport routes, including indirect routes, aid should be possible for all those routes and for transport by
all carriers operating on these routes. Aid should be granted without discrimination as to the identity of the
carrier or type of service and may include regular, charter and low-cost services.
(71) Broadband connectivity is of strategic importance for the achievement of the Europe 2020 objective of smart,
sustainable and inclusive growth and innovation and for social and territorial cohesion (
1
). Investment aid for
broadband infrastructure aims at fostering the deployment of such infrastructure and related civil engineering
works in areas where no comparable infrastructure exists nor is likely to be deployed by market operators in the
near future. In the light of the Commission's experience, such investment aid does not give rise to undue distor
tions of trade and competition, provided that certain conditions are met. Such conditions should aim, in particu
lar, at limiting distortions of competition by subjecting aid to technology-neutral competitive selection and by
ensuring wholesale access to the subsidised networks, taking into account the aid received by the network
operator. Although under certain conditions virtual unbundling may be considered equivalent to physical
unbundling, until more experience is acquired, there is a need to assess on a case by case basis whether a particu
lar non-physical or virtual wholesale access product should be considered equivalent to local loop unbundling of
a copper or fibre network. For this reason, and until such experience in individual State aid cases or in the ex ante
regulatory context can be taken into account in a future review, physical unbundling should be required for the
purposes of benefiting from the present block exemption regulation. Where future costs and revenue develop
ments are uncertain and there is a strong asymmetry of information, Member States should also adopt financing
models that include monitoring and claw-back elements to allow a balanced sharing of unanticipated gains. To
avoid a disproportionate burden on small, local projects, such models should be put in place only for projects
exceeding a minimum threshold.
(72) In the culture and heritage conservation sector, a number of measures taken by Member States may not constitute
aid because they do not fulfil all the criteria of Article 107(1) of the Treaty, for example because the activity is
not economic or because trade between Member States is not affected. To the extent that such measures are
covered by Article 107(1) of the Treaty, cultural institutions and projects do not typically give rise to any signifi
cant distortion of competition, and case practice has shown that such aid has limited effects on trade. Article 167
of the Treaty recognises the importance of promoting culture for the Union and its Member States and provides
that the Union should take cultural aspects into account in its action under other provisions of the Treaty, in par
ticular in order to respect and to promote the diversity of its cultures. As natural heritage is often crucial to
shaping of artistic and cultural heritage, heritage conservation in the sense of this Regulation should be under
stood to cover also natural heritage linked to cultural heritage or formally recognised by the competent public
authorities of a Member State. Because of the dual nature of culture, being on the one hand an economic good
that offers important opportunities for the creation of wealth and employment, and, on the other, a vehicle of
identities, values and meanings that mirror and shape our societies, State aid rules should acknowledge the speci
ficities of culture and the economic activities related to it. A list of eligible cultural purposes and activities should
be established and eligible costs should be specified. The block exemption should cover both investment and
operating aid below determined thresholds provided that overcompensation is excluded. In general, activities
which, although they may present a cultural aspect, have a predominantly commercial character because of the
higher potential for competition distortions, such as press and magazines (written or electronic), should not be
covered. Furthermore, the list of eligible cultural purposes and activities should not include commercial activities
such as fashion, design or video games.
(73) Audiovisual works play an important role in shaping European identities and reflect the different traditions of
Member States and regions. While there is strong competition between films produced outside the Union, there is
limited circulation of European films outside their country of origin due to the fragmentation into national or
regional markets. The sector is characterised by high investment costs, a perceived lack of profitability due to
limited audiences and difficulties to generate additional private funding. Due to these factors the Commission has
developed specific criteria to assess the necessity, proportionality and adequacy of aid to script-writing, develop
ment, production, distribution and promotion of audiovisual works. New criteria were determined in the
26.6.2014 L 187/13 Official Journal of the European Union
EN
(
1
) COM(2010) 245, 19.5.2010.