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Broadband expansion boost

21 мая 2009

Public funding of broadband internet networks in rural areas may be allowable under European state aid rules, according to draft guidelines issues by the European Commission.

The proposed rules potentially open the door to billions of euros of state money in infrastructure projects, some of it as part of nationally-funded stimulus packages.

“My objective is to provide a clear and predictable framework for the application of EU state aid rules in this strategic sector,” said Neelie Kroes, EU competition commissioner.

The news will come as a boost to the telecoms industry, which will now see what willingness there is on part of local authorities or national governments to subsidise the extension of their broadband networks to rural areas.

The EU typically frowns upon state investment in areas where private investors are willing to venture, and in this case has made very clear that investment in broadband networks would only be tolerated in areas that currently lack internet connectivity.

“This is all the more important in the present economic circumstances as investments in this important infrastructure may both help economic recovery in the short term and allow long term benefits for European competitiveness," added Mrs Kroes.

The clarification of the state investment rules in broadband comes as the guidelines for telecoms operators on private investment in high-speed internet lines have yet to emerge.

This is causing mounting irritation to those in the industry keen for clarity on how the networks they want to invest in will be regulated, with an estimated €300bn ($409bn, £264bn) set to be spent on “next generation” networks in the EU.

The EU’s own attempt at a recovery package mentions broadband as one infrastructure field ripe for state investment, looking to invest €1bn in extending the network to rural areas.

“The Commission has taken an overwhelmingly favourable view towards state measures for broadband deployment for rural and underserved areas, whilst being more critical for aid measures in areas where a broadband infrastructure already exists and competition takes place,” the document says.

Beyond contributing to stimulating the economy, the expansion of broadband networks “promotes regional cohesion and addresses market failures. In almost all of its decisions in this field, the Commission has underlined that broadband networks tend to profitably cover only part of the population, so that state support is needed to achieve ubiquitous coverage.”

It stressed that it would take the presence of two or more broadband providers in a given area as an indication of a competitive market in which state aid would not be allowed.

Источник: Financial Times

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