Brussels, 20 July 2010
State aid: Commission approves state aid for high speed internet in Estonia
The European Commission has authorised under the EU State aid rules Estonia's plans to support the establishment of a country wide high speed broadband infrastructure, the EstWin project. The project aims at linking rural areas with the existing optical fibre network and give them access to high speed internet services. The Commission found the project to be in line with the state aid rules, because it could not have been induced through market forces alone and the infrastructure will be available to all operators under the same conditions.
"I welcome Estonia's high speed internet strategy." said Joaquín Almunia, Commission Vice President in charge of Competition Policy. "It supports the aim of the EU Digital Agenda to deliver sustainable economic and social benefits from a Digital Single Market, without unduly distorting competition."
The EstWin project to establish an Estonia-wide high speed internet infrastructure is part of the Estonian Information Society Strategy 2013. The Commission assessed this project on the basis of the EU Guidelines on state aid for broadband networks of 2009 (see IP/09/1332 and MEMO/09/396).
In line with the broadband guidelines, non-profit organisations may apply for support to construct and manage regional optical fibre networks in areas currently not served by it, under the condition that they offer all interested telecommunication operators the possibility to use this infrastructure on equal terms.
The project is expected to enable up to 98% of Estonia's households, businesses and institutions to connect to a high speed internet network with a data transfer rate of at least 100 Mbit/s, also in areas where private investment would not lead to such coverage in the near future. Operators often do not have sufficient commercial incentives to upgrade the existing networks, as in particular in less densely populated areas they would not expect to get an adequate return on their investment. Without state aid it would therefore not be possible to achieve such a wide availability of very high speed internet.
Estonia expects that the EstWin Project will help to eliminate the digital division between urban and rural regions, increase social cohesion and contribute to economic growth. The availability of the necessary broadband infrastructure will be a key factor for the local communities in attracting businesses, distance working, providing health care services and improving education and public services.
The "Digital Agenda for Europe" is one of the flagship initiatives of the Commission's Europe 2020 strategy of 3 March 2010. It aims at delivering sustainable economic and social benefits from a Digital Single Market, with broadband access for all by 2013 and the promotion of ultra fast access. To achieve this aim Member States are expected to "draw up operational high speed internet strategies, and target public funding, including structural funds, on areas not fully served by private investments.
The Commission's new broadband guidelines, adopted in September 2009 (see IP/09/1332 and MEMO/09/396) explain in detail, how Member States can use EU state aid rules to support broadband networks to achieve this aim. Since their adoption, the Commission has dealt with a large number of broadband cases (see also MEMO/10/31).
The non-confidential version of the decision will be made available under the case number N 196/2010 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.