State aid: Commission approves €400 million of public support for very high-speed networks in Spain

This article is brought to you in association with the European Commission.

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The European Commission has approved, under EU State aid rules, €400 million of public support to deploy very high-speed broadband networks in Spain. The scheme will benefit consumers and businesses in areas with insufficient connectivity in Spain. Executive Vice-President Margrethe Vestager, in charge of competition policy said: “Spanish consumers and businesses should benefit from the full potential of digital growth, regardless of where they are located. This measure will address the digital divide between urban and rural areas in Spain. With this decision, we again endorse the use of public funds for high-speed internet services to households and businesses in areas where private investment is insufficient”. The scheme has a budget of €400 million and will run from 2020 to 2022. It aims to address connectivity deficits across Spain, and to improve and accelerate coverage with very high-speed networks, in order to achieve the internet connectivity necessary to support the European Digital Single Market. The measure will support the rollout of networks capable of providing upload and download speeds of 300 megabits per second (Mbps), upgradeable to 1 gigabit per second (Gbps), to the targeted areas. The new networks will cover areas where no high-speed network offering download speeds of at least 30 Mbps download is already present or planned in the near future. To a lesser extent, it will also cover areas where one such high-speed network is already present or planned in the near future, but where there is no network in place or planned capable of providing more than 100 Mbps download. The new networks will also provide access to improved broadband services, which will stimulate the development of a modern digital economy. The Spanish authorities have developed a comprehensive mapping of currently available infrastructure and carried out public consultations in order to determine the target areas. Further public consultations will be carried out to ensure that distortions of competition are limited to a minimum. All networks funded under the measure will offer wholesale access to all operators on an open, transparent and non-discriminatory basis, and will therefore incentivise private investments in the provision of high-speed internet services to households and businesses in the target areas. The Commission assessed the measure under EU State aid rules, in particular its 2013 Broadband Guidelines. The Commission concluded that the scheme’s positive effects on competition in the Spanish broadband market outweigh potential negative effects brought about by the public intervention. On this basis, the Commission approved the measure under EU State aid rules. The scheme will contribute to the EU strategic objectives set out in the Digital Agenda for Europe and in the Communication “Towards a European Gigabit Society“. Background The measure approved today is a prolongation of a previous Spanish scheme to support the roll out of Next Generation Access (NGA) networks in underserved areas, approved by the Commission in 2013. Broadband connectivity is of strategic importance for European growth and innovation in all sectors of the economy, as well as for social and territorial cohesion. The Digital Agenda for Europe acknowledges the socio-economic benefits of broadband and sets targets for broadband development in Europe, including that 50% or more of European households should subscribe to internet connections above 100 Mbps. The Digital Agenda for Europe was complemented in 2016 by the Gigabit Communication, which defines connectivity objectives to be achieved by 2025, where connecting all European households with very high-speed networks able to provide download speeds of at least 100 Mbps, upgradeable to 1 Gbps, should enable the widespread use of products, services and applications in the Digital Single Market. The existing 2013 Broadband Guidelines allow for such public investments where a market failure exists and where these investments bring a significant improvement (step change). This is also subject to certain other parameters to protect competition and private investment incentives. The non-confidential version of the current decision will be made available under case number SA.53925 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.