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EC To Regulate State Aid For Next-Gen Broadband

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Stimulus packages to build high-speed broadband must not fall foul of state aid rules, warned European commissioner Neelie Kroes

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Governments whose economic stimulus packages inlcude using public funded next-generation broadband plans must take care not to break European state aid rules, according to guidelines published this week.

In a statement released this week, the EC said it wanted to provide clear guidance for member states on how best to fund the roll-out of high speed broadband without compromising private sector network operators such as the UK’s BT.

The UK government, for instance, will have to ensure that Alastair Darling’s plan to use left-over digital TV money to pay for universal broadband is within the rules.

“My objective is to provide a clear and predictable framework for the application of EU state aid rules in this strategic sector,” said EC competition commissioner Neelie Kroes. “This is all the more important in the present economic circumstances as investments in this important infrastructure may both help economic recovery in the short term and allow long term benefits for European competitiveness.”

The EC has invited individual states and stakeholders to comment on the draft rules that should apply to state funding of next generation access networks. “The deployment of such networks represents a major technological shift in the broadband market that requires significant investments from electronic communication operators and the Commission aims to encourage and support the rapid and timely roll-out of such networks,” the commission stated.

The EC claims that Europe is among the top broadband regions of the world; more than 100 million residents have broadband access and leading countries’ penetration is in the order of 40 percent. The European Council has earmarked €1.02 billion for investment in broadband in Europe.

Investing in new digital infrastructure such as broadband and smart grid technology could help generate up to 700,000 new jobs in the UK according to the London School of Economics.

Despite recent dire financial performance, BT say it is preparing itself to benefit from an eventual recovery and was even planning to bring ahead work and investment in fibre-infrastructure.