EC Authorises State Aid To Increase Broadband Penetration In Ireland

by Ulrika Lomas, for LawAndTax-News.com, Brussels

13 March 2006

The European Commission announced on Thursday that it has authorised, under EC Treaty state aid rules, a programme to boost broadband availability in Ireland.

Ireland is lagging behind most EU-15 Member States in terms of broadband penetration. Of the older EU members, broadband take-up in Ireland ranks second lowest, just before Greece. In late 2005, only 5.3% of the population had broadband connections.

The Irish Government has revealed plans to create open-access Metropolitan Area Networks (“MANs”) in over 120 Irish towns at a cost of EUR170m, with support from EU structural funds.

The management and exploitation of the networks, which will remain in public ownership, will be tendered out to a wholesale operator. This wholesale operator will then offer its services to telecommunications companies, who will provide high-speed electronic communications services to end users.

This funding is for Phases II and III of the MANs programme. Phase I has already been completed, with networks built in 26 towns.

The Commission concluded that the aid was not likely to distort competition within the EU significantly, as the Irish authorities have implemented a number of safeguards to ensure that this is the case. These measures include the fact that the wholesale operator will be selected through an open tender, and a revenue distribution mechanism will keep the aid amounts to a minimum.

Competition Commissioner Neelie Kroes commented:

“I am pleased to endorse this expansion of the Irish Metropolitan Area Network programme. The open networks will enable all operators to offer high-speed broadband services to businesses and citizens in the towns concerned. The project will boost competition in the area and is fully in line with the Commission’s policy to promote broadband in areas which would otherwise miss out.”

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