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Brussels, 7th April 2005

State aid: Commission endorses public funding for broadband communications in rural and remote areas of Spain

The European Commission has authorised, under the EU state aid rules, a Spanish subsidy scheme which aims at boosting investments in broadband communications in rural and remote areas. The measure, which will be co-financed by EU funds, will improve the availability of access to high-speed communication services for citizens and businesses in underserved regions of Spain. The Commission concluded that the aid was not likely to cause undue distortion of competition within the Single Market and was therefore compatible with EC Treaty state aid rules (Article 87).

Under the “National programme for the roll-out of broadband in rural and remote areas”, the Spanish authorities have earmarked a total of €26.4m in direct grants and €111.9m in interest-free loans for the period from 2005 to 2008. Under the programme, providers of electronic communications services may submit proposals for providing broadband in specific areas where such services are currently not available.

The Commission has found that the aid granted is compatible with the EU rules on State aid (Art. 87 (3) (c) of the EC Treaty), since the subsidies are provided only to the extent necessary to enable and develop the use of broadband services in geographically disadvantaged areas of Spain. The Spanish authorities implemented a number of safeguards to ensure that the aid amounts granted are kept to a minimum and do not distort competition to an extent which is contrary to the common interest. For example, the scheme does not favour a specific technology, foresees that projects will be selected through open tenders and enables open access for third party providers.

The scheme aims at correcting the “digital divide” between communities and businesses which can get affordable access to broadband services and those who cannot. The measure is part of the Spanish National Broadband Strategy and in line with Community priorities as indicated in the eEurope 2005 Action Plan (see IP/04/626) and the recently launched i2010 initiative.

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