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Brussels, 22nd February 2007

State aid: Commission endorses proposed public funding for North Yorkshire broadband network NYNET

The European Commission has approved under EC Treaty state aid rules a UK initiative to create an advanced broadband network in North Yorkshire. The Commission concluded that the aid was unlikely to cause undue distortion of competition within the EU and was therefore compatible with European state aid rules.

Competition Commissioner Neelie Kroes commented: “This advanced network for the public sector can be used by all commercial operators. It will help the economic development of North Yorkshire by allowing citizens, businesses and government bodies to reap the full benefits of advanced broadband connectivity. The project is fully in line with the Commission’s policy to promote broadband in under-served areas”.

The EU's state aid rules (Article 87(3)(c) of the EC Treaty) allow subsidies for the development of certain economic activities or of certain economic areas provided there is no negative effect on competition overall. The proposed network, which is likely to be co-financed by the European Regional Development Fund, complies with Community priorities in this field as outlined in the i2010 initiative (see IP/05/643) and is in line with the Commission efforts to bridge the digital divide (see IP/06/340 and MEMO/06/237).

North Yorkshire's geography and local economy discourage commercial operators from providing advanced broadband services in many rural parts of the region. As a result, only a minority of citizens and businesses located in certain towns currently have access to advanced broadband services.

Recognising the importance of an advanced broadband infrastructure and the need to provide cost effective broadband connectivity for remote and rural areas of the region, the authorities of North Yorkshire have aggregated public-sector demand and will provide the necessary financial support for the construction and operation of the network. This is done by means of an open tender.

The local authorities have retained the right to use the network for public sector needs for a period of 10 years. At the same time, wholesale access to the network will be granted to operators and internet service providers on an open and non-discriminatory basis. These operators will add their own investments to supply advanced broadband services to citizens and SMEs.

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