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Brussels, 30th April 2008

State aid: Commission approves £3.4 million public funding for broadband in Scotland

The European Commission has authorised under the EC Treaty state aid rules £3.4 million (€4.32 million) of public funding for a broadband measure in remote and rural areas of Scotland. The measure is the final step to bring affordable broadband services to all Scottish citizens. The Commission concluded that the aid is well-targeted to achieve this objective and contains adequate safeguards to ensure that Scottish citizens will enjoy the benefits of a competitive broadband market.

Competition Commissioner Neelie Kroes commented: “I am pleased to endorse public funding that will allow residential and business users in Scotland, who still do not have access to affordable broadband services, to reap the full benefits of the knowledge-based economy.”

In 2004, the Commission approved a UK state aid measure that increased broadband coverage to 99% of Scottish households (see IP/04/1371). The objective of this second measure is to extend the coverage to the remaining 1% of households in Scotland that still do not have affordable broadband services.

The project is fully in line with the Commission’s policy to promote widespread and affordable broadband services to all European citizens and complies with the EU state aid rules that allow aid to facilitate the development of certain economic activities or areas where such aid does not unduly affect trading conditions between Member States (Article 87(3) (c) of the EC Treaty).

At the end of its investigation, the Commission concluded that the public funding is necessary to provide affordable broadband services to the population of Scotland in the targeted areas. At the same time, the measure contains several safeguards to ensure that the aid amount is kept to a minimum and that telecommunication operators will have non-discriminatory access to the wholesale services.

The non-confidential version of the decision will be made available under the case number N 14/2008 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.

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