EU State Aid for Broadband at Record High

State aid for broadband networks reached a record high in the European Union last year, according to new figures released on Thursday.

The European Commission, the bloc's main regulatory authority, approved the use of more than €1.8 billion (US$2.4 billion) of public funds for broadband development in 2010 -- four times that allowed in 2009. This state aid was allowed in an effort to achieve ambitious digital agenda goals to ensure that all European Union citizens have high-speed Internet access by 2020.

Currently, only around 30 percent of E.U. broadband lines have speeds of at least 10Mbps and only 5 percent of lines have average speeds at or above 30Mbps. The European Commission wants to see all broadband connections at speeds of at least 30Mbps by 2020 and has a target of at least half of European households subscribing to speeds above 100Mbps.

Public funds are primarily spent in rural or remote areas where market operators are unlikely to invest on commercial terms in the near future. However, it is estimated that the injection of state aid could generate up to €3.5 billion of additional investments as they complement private investment.

Adequate and affordable broadband services are expected to create huge economic and social benefits for individuals living in remote areas, giving them access to e-health, e-government and e-learning services. Businesses are also hoped to benefit by giving them the option of recruiting previously unavailable teleworkers.

Follow Jennifer on Twitter at @BrusselsGeek or email tips and comments to jennifer_baker@idg.com.

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