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EU Publish Details of State Aid Decision for UK Superfast Broadband Projects

Wednesday, January 9th, 2013 (8:41 am) by Mark Jackson (Score 894)
fibre optic ultrafast broadband uk

The European Commission (EC), which officially cleared the release of state aid funding for UK superfast broadband deployment projects last November (original news), has now released the final documentation that describes the reasoning for their decision in more detail.

In the end Europe only requested several “relatively minor changes” to the related Broadband Delivery UK (BDUK) framework, such as to ensure that any new projects that were funded by the £530m scheme could meet with the EU’s minimum Digital Agenda download speed target of 30Mbps+ (Megabits per second) for all by 2020 (the UK government defines superfast broadband as 25Mbps+ and targets coverage for 90% of the country by spring 2015).

The commission also told the UK to ensure that any “future revisions” of the EU Broadband Guidelines, which were officially adopted one month later (December 2012), would also be reflected via appropriate measures in the BDUK scheme.

Europe’s Decision on UK State Aid Broadband Funding (BDUK)

On the basis of the foregoing assessment, the Commission has accordingly decided that the aid measure “National Broadband scheme for the UK – Broadband Delivery UK” is compatible with Article 107(3)(c) TFEU.

The UK is reminded that, pursuant to Article 108(3) TFEU, they are obliged to inform the Commission of any plan to extend or amend the measure. In view of the duration of the scheme, the Commission would like to draw the UK’s attention to future revisions of the Broadband Guidelines, which might require appropriate measures to the scheme necessary.

The UK has committed itself to submit an evaluation of the scheme to the Commission before 31 March 2015 and the re-notification of the scheme shall be subject to the results of that evaluation.”

The EC ultimately concluded that the “overall effect” of BDUK is “deemed to be positive” and in line with Europe’s Digital Agenda objectives. The commission claimed that the UK’s intervention (public funding) was “designed in a way that does not distort competition or adversely affect trading conditions to an extent contrary to the common interest.” Some might disagree given that BT seems to be the only viable bidder and inevitable beneficiary.

Generally speaking the final document, which was spotted in the wild by Thinkbroadband, doesn’t offer any fundamentally new information, beyond what was announced in November 2012; though it does add some technical background.

Last year’s funding approval mostly just reiterated BDUK’s original goals. Indeed we’re still waiting for the UK to setup a “national competence centre” to help advise smaller local authorities and the BDUK website has yet to fully act as a central location that publishes “all information related to projects under the scheme” (including mapping, public consultation, tenders, aid beneficiaries).

State aid SA.33671 (2012/N) – United Kingdom (PDF)
http://ec.europa.eu/competition/state_aid/cases/243212/243212_1387832_172_1.pdf

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6 Responses
  1. was “designed in a way that does not distort competition or adversely affect trading conditions to an extent contrary to the common interest.”

    What a joke. The “to an extent contrary to the common interest” really is just their way of saying that they do not give a stuff about distorting competition, favouring the dominant incumbent as long as it suits them, etc etc.

    Brussels knows best, blah, blah, blah…

    • dragoneast

      Sorry but name me one country with competition legislation that doesn’t also have a “public interest” test. It’s common sense, not stupidity.

    • So it is “public interest” to favour the incumbent operator at the expense of all others, thereby increasing their dominant market positionw whilst getting zip in return for the hundreds of millions?

      It is just a throwaway remark by Brussels in my view – and the EU afterall is hardly a shining example of governance, given for example that they have not had their budget audit signed off for umpteen years and are not accountable to the common citizen.

    • New_Londoner

      Please explain why others were unwilling to bid when given the opportunity to do so by BDUK. Its approach has faults but it can certainly show it conducted an open procurement exercise.

      (IIRC The reason offered by one company when it withdrew from the process was that it was unwilling to invest its own capital. In other words it wanted to take our tax monies without itself taking any risk in return, which is hardly a compelling offer!)

    • DTMark

      On first glance through the document, there appear to be some quite significant gaps between what that says and what BDUK have said, and are pushing for.

      One such example is that the document notes that there is more than one bidder and specifically mentions Fujitsu as a counter to BT.

      Has nobody in the UK told Brussels that Fujitsu were ruled out?

    • New_Londoner

      @DTMark
      AFAIK Fujitsu remains a bidder in the BDUK framework contract, although it has yet to win any contracts. So I don’t believe it is correct to say it has been “ruled out”.

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