The European Commission has found that the UK's proposal to grant around €6 million of public financing for the construction of an ultra-fast broadband network in the city of Birmingham agrees with EU state aid rules, in particular because it will be genuinely open to all operators and will therefore promote competition.
"Investments in ultra-fast broadband networks contribute to promoting growth in line with the EU's Digital Agenda. If such networks are built with the help of taxpayers' money, it is important to ensure thriving competition on the subsidised networks, so that local businesses and citizens can benefit from continuously improving broadband services at competitive prices." said Commission Vice President in charge of competition policy Joaquín Almunia.
The target areas of the measure are two districts in Birmingham where private operators have no or very limited investment plans in the next three years. This means that in the absence of this project most consumers would only be able to use basic broadband services or very expensive business leased line services.
The Commission's investigation found that the ultra-fast network of Birmingham was designed in a pro-competitive manner, exceeding in several respects the requirements of the EU Broadband Guidelines. In particular, open access will be granted for at least 25 years for alternative operators, whereas the guidelines require only seven years. Moreover, the network will be operated on a wholesale basis so as to ensure more competition at retail level. Finally, all possible wholesale access products will be offered to third party operators, including dark fibre, which is one of the most pro-competitive wholesale access products.
The project is also fully in line with the requirements of the new draft Broadband Guidelines (published on 1 June for public consultation, see IP/12/550), in particular by offering significant enhanced technological characteristics as compared to existing networks (for instance symmetric speeds). There is expected demand for such qualitative improvements from numerous local SMEs active in the "creative industry". Moreover, the subsidised network will be operated as a wholesale only network.
The project is part of the UK's "ultra-fast broadband city" initiatives, under which £100 million was allocated to support the roll out of such infrastructures in large UK cities. These projects support the third objective of the EU Digital Agenda and the Europe 2020 initiative for growth (see IP/10/581 and MEMO/10/199), namely to achieve 50% internet penetration on 100 Mbps networks.
- Read Press Release (External Website)