EU Grants Estonia State Aid to Push Broadband Access

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The European Commission continues to push for widespread broadband connectivity, approving state aid Tuesday for high-speed Internet in Estonia.

Estonia plans to set up a country-wide high-speed broadband infrastructure called the EstWin project. The project aims to link remote rural areas into the main fiber-optic network for high-speed Internet access. The Commission allowed the allocation of state aid because the project would not have occurred due to market forces alone.

The project is in line with the objective of the E.U. Digital Agenda to deliver a digital single market with broadband access for all by 2013. To this end, the Commission has opened the door to state aid for many rural areas across Europe. Nonprofit organizations can apply for support to construct and manage regional fiber-optic networks, under the condition that they offer the same terms and conditions to all telecommunication operators using the infrastructure.

Over the past six years, the Commission has adopted more than 40 decisions on state aid provisions to broadband infrastructure.

A German case approved at the end of last year allowed municipalities to invest in and own specific ducts to encourage broadband deployment in underserved areas. These ducts will be made available to broadband network operators free of charge, thus constituting state aid. However, this was deemed permissible as the multifiber ducts will allow several broadband operators to deploy their networks, thus encouraging competition.

In Ireland a plan to provide affordable basic broadband coverage was fast-tracked and the Commission approved state aid for a project within one month of the notification date. Meanwhile in Cyprus, a nationwide broadband project has divided the country into "white areas" (currently underserved by broadband) and "black areas" (currently provided for). Authorities decided that no single operator can win tenders to operate in all white areas thereby fostering competition and encouraging multiple operators to benefit from state aid.

This level of interference in normal market forces highlights the E.U. authorities' commitment to getting high-speed Internet to all European citizens. In less densely populated areas, operators often have little commercial incentive to upgrade existing networks as they would not see a return on investment.

The aim of the Commission is to foster a wide and rapid rollout of broadband networks and to eliminate the digital divide between urban and rural regions. In many rural regions of the E.U., broadband availability is key for local communities to attract businesses, and for distance-working, providing health-care services and improving education and public services.

In Estonia the EstWin project is expected to enable up to 98 percent of Estonia's households, businesses and institutions to connect to a high-speed Internet network with a data transfer rate of at least 100M bps (bits per second).

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