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1Bn Gov BB Investment May Be Illegal
By: MarkJ - 05 August, 2003 (1:17 PM)

The hi-speed campaign group, Broadband4Britain, claims that the government's new 1billion broadband investment programme could break EU competition law and constitute illegal state aid:

Andy Williams, campaign manager of Broadband4Britain, said in a statement: "Since this is the only market intervention that we can expect from central government in the next three years, we would like to ensure that the money is spent effectively, and that the investment has real and sustainable long-term benefits. Having spoken to many stakeholders, we have real fears that those benefits aren't going to materialise."

Key concerns are that if demand is locked into one network operator it will reduce competition in the market in rural areas, and that using public money to create this infrastructure could then breach EU competition rules.

Michael Ryan, head of the European Telecomms Practice and partner at international law firm Arnold Porter, said in a statement: "In certain cases, an agreement under which the government gives a supplier exclusivity in order to promote the deployment of broadband services could constitute illegal state aid and violate EU procurement laws."

The Silicon item reports that the Broadband Stakeholder Group has backed the claims and asked for the Department of Trade and Industry (DTI) to discuss the issues.

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