IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

Yes

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
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Inception date: 20 Nov 2012 | Removal date: 30 Jun 2015
Still in force

Financial grant

According to the UK, "The primary objectives of the scheme are (1) to provide access to NGA infrastructure capable of delivering superfast broadband speeds to as many homes and businesses as possible in each local authority area in the UK; and (2) to ensure that everyone in the remaining areas in the UK has access to minimum broadband speeds of at least 2 Mbps (the universal service commitment). These objectives reflect the first two objectives set out in the DAE. As a secondary objective, where an area is unlikely to receive more than the minimum broadband speed of at least 2 Mbps, the scheme aims to enable communities within those areas to secure NGA infrastructure or NGA infrastructure upgrades capable of delivering superfast broadband speeds.[...] Funding for local broadband projects will be provided as a capital grant  [...] The UK has allocated £530m within the lifetime of the current Parliament (i.e. until 2015) to achieve the two primary objectives of the measure. A further £300m has been identified, but not yet committed, for the period up to 2017. Of the £530m, £10m will be used to match fund £10m of RDPE EAFRD funding to establish a confirmed £20m Rural Community Broadband Fund ('RCBF') [...] According to the preliminary estimation of the UK, the total value of the aid to be covered by this scheme will be approximately GBP 1.5 billion (i.e. EUR 1.8 billion). [...] The UK-wide scheme will start with the approval of the notified scheme by the European Commission and will be valid until 30 June 2015." (para. 12, 13, 22 and 26 letter from the EC to the UK, Brussels 22.11.2012)

Based on the findings of the European Commission, " [...], financial support or support 'in kind' distorts competition in so far as it strengthens the position of an undertaking compared with other undertakings. Due to the state aid granted to a competitor, existing operators might reduce capacity or potential operators might decide not to enter into a new market or a geographic area. The intervention of the state alters the existing market conditions by allowing the provision of improved broadband services by the selected electronic communication operator and, potentially, third party providers. Furthermore, the measure will alter the conditions of competition between end users who are likely to subscribe to the very high speed broadband services in the targeted areas and end users elsewhere in the UK and the EU. Therefore, the fact that an improved broadband service becomes available has the effect of distorting competition. [...] Insofar as the State intervention is liable to affect service providers from other Member States, it also has an effect on trade since the markets for electronic communications services (wholesale and the retail broadband markets) are open to competition between operators and service providers." (para. 66 and 67 letter from the EC to the UK, Brussels 22.11.2012)

In the GTA database the determination of whether a policy instrument discriminates against foreign commercial interests turns on whether it creates or alters the relative treatment of domestic firms versus foreign commercial interests. On this metric, the state aid proposed here is discriminatory because the state aid is not available to competing firms outside of the implementing jurisdiction.

AFFECTED COUNTRIES

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