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Brussels, 12 August 2010

State aid: Commission approves broadband scheme in Catalonia, Xarxa Oberta

The European Commission has approved under EU state aid rules the rollout of a public open network (Xarxa Oberta) in the Spanish region of Catalonia. The network will serve the connectivity needs of the regional administrative centres in the region and will be open at wholesale level to electronic communications operators seeking access to it. After a detailed examination, the Commission found the scheme to be in line with its Broadband Guidelines (see IP/09/1332 and MEMO/09/396). The measure will contribute significantly to achieving the objectives of the Digital Agenda (see Communication A Digital Agenda for Europe and will enhance the possibilities for infrastructure based competition in Catalonia without unduly distorting competition.

Commission Vice President in charge of competition policy Joaquín Almunia commented: “Reaching the targets of the Digital Agenda is very important, but how we reach them is important as well. The state aid rules ensure that state-funded broadband infrastructures are deployed in the most pro-competitive way. Xarxa Oberta will bring very high speed broadband to Catalonia at pro-competitive conditions and citizens and businesses in the region will benefit from state of the art infrastructure".

The Commission found that the Spanish measure is fully in line with the Broadband Guidelines measure because any distortive effects of the aid on competition are more than compensated by the advantages that the network will bring to citizens and businesses.

The project concerns the rollout of a publicly owned broadband next generation access (NGA) network to connect all regional public administration sites. The new network will allow the public administration, including those bodies situated in the most remote areas, to live up to the growing expectations of its citizens as regards the provision of advanced e-government, education and health care services.

Moreover, to meet current and future private demand for very high capacity broadband and to foster the competitive provision of broadband services, private electronic communication operators will be able to obtain fair and non discriminatory access to the spare capacity of the Xarxa Oberta wholesale infrastructure (backhaul) across the entire region, with the exclusion of the four provincial capitals (Barcelona, Tarragona, Lleida, Girona), which may be attractive for private investments.

The provision of wholesale backhaul services to private operators falls within the scope of EU state aid rules and has to be assessed and authorised by the Commission.

Under the supervision of the National Regulatory Authority, CMT, access to the backhaul part of the public infrastructure will be open, fair and non discriminatory for all existing and future operators who wish to connect their NGA last mile infrastructures. This will generate higher broadband coverage, better quality and lively competition to the benefit of citizens and businesses in the region. In those areas still affected by the digital divide, where there are no adequate or affordable first generation broadband services, also basic broadband last mile infrastructures will be allowed to use Xarxa Oberta as a backhaul.

As a result, Xarxa Oberta becomes a major step towards achieving in Catalonia the goals of the Digital Agenda to provide 30Mbps access for all and 100Mbps for at least half of the households by 2020, without unduly jeopardising existing private investments.

The application of the Commission's Broadband Guidelines ensures that public funding will only be used where no private operator would invest on market terms and will only be handed out after a public tender. Open, non-discriminatory wholesale access will allow several broadband service providers to offer competitive services on the new networks.

The non-confidential version of the decision will be made available under the case number N 407/2009 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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