Tue. Jan 31st, 2023

Brussels, 17 October 2022

The European Commission has approved, under EU State aid rules, a €500 million Spanish scheme made available through the Recovery and Resilience Facility (‘RRF’) to support the deployment of broadband backhaul infrastructure in rural areas. The measure is part of Spain’s strategy to address the needs of citizens and business in the context of the digitalisation of the country. The scheme also contributes to the EU’s strategic objectives relating to the digital transition.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said:

This €500 million Spanish scheme, funded via the Recovery and Resilience Facility, will support the deployment of broadband backhaul networks that will foster the development of performant mobile services in Spain. This will help consumers and business in rural areas access high quality mobile services, contributing to the economic growth of Spain and to the EU’s strategic objectives relating to the digital transition”.

The Spanish measure

The scheme, which will run until 31 December 2025, will be funded via the RRF, following the Commission’s positive assessment of the Spanish Recovery and Resilience Plan (‘RRP’) and its adoption by the Council. The Spanish RRP includes important investment projects in the electronic communications sector, including the deployment of performant mobile networks. The scheme approved today concerns the roll out of broadband backhaul networks.

Under the scheme, the aid will take the form of direct grants to electronic communication providers and infrastructure companies. Beneficiaries will be selected on the basis of an open, competitive, transparent and non-discriminatory selection procedure. The amount of aid per beneficiary will not exceed 90% of eligible costs. The measure will finance the deployment of fibre-based broadband backhaul networks to connect certain base stations situated in municipalities of less than 10,000 inhabitants and which, by 31 December 2025, will not have a performant one in the absence of public support.

The scheme aims to ensure a wide availability of high-performing mobile networks, capable of delivering high-quality and reliable electronic communication access services to end-users, satisfying their current and evolving needs.

The Commission’s assessment

The Commission assessed the scheme under EU State aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the European Union, which allows State aid to facilitate the development of certain economic activities or of certain economic areas.

The Commission found that:

  • The measure is necessary and proportionate to address market failures, namely the absence of current or planned performant backhaul connections in the target areas, which are typically located in remote and sparsely populated parts of Spain. The existence of a market failure has been assessed through a mapping of currently available and planned broadband infrastructure, as well as through a public consultation carried out by the Spanish authorities.
  • The measure has an incentive effect, since it facilitates the roll out of high-performing backhaul networks that private operators are not willing to deploy due to high deployment costs. The scheme will improve the availability of performant and innovative mobile services in the target areas to the benefit of consumers, businesses and the public sector. In addition, it will contribute to correcting social or regional inequalities in particular in rural areas.
  • The scheme has sufficient safeguards to ensure that undue distortions of competition are limited and that the aid does not adversely affect trading conditions contrary to the common interest. In particular, all beneficiaries of the scheme will be selected by means of an open, competitive, transparent and non-discriminatory selection procedure. Spain will also encourage the reuse of existing infrastructure. Finally, the measure ensures fair, open and non-discriminatory wholesale access to the supported networks.

On this basis, the Commission approved the Spanish scheme under EU State aid rules.

Background

All investments and reforms entailing State aid included in the national recovery plans presented in the context of the RRF must be notified to the Commission for prior approval, unless covered by one of the State aid block-exemption rules.

The Commission assesses measures entailing State aid contained in the national recovery plans presented in the context of the RRF as a matter of priority and has provided guidance and support to Member States in the preparatory phases of the national plans, to facilitate the rapid deployment of the RRF. At the same time, the Commission makes sure in its decision that the applicable State aid rules are complied with, in order to preserve the level playing field in the Single Market and ensure that the RRF funds are used in a way that minimises competition distortions and do not crowd out private investment.

Broadband connectivity is of strategic importance for European growth and innovation in all sectors of the economy and for social and territorial cohesion. The measure notified by Spain also contributes to the EU’s strategic objectives set out in the Gigabit Communication, the Communication on Shaping Europe’s digital future, the Digital Compass’ Communication, and the Commission’s proposal for a decision establishing the 2030 Policy Program ‘Path to the Digital Decade’.

The scheme approved today is the third measure approved by the Commission that is part of the Spanish RRP relating to important investment projects in the electronic communications sector. On 14 June 2021, the Commission approved an extension of a Spanish scheme to support access to high-speed broadband services in underserved areas (SA.62696). On 15 December 2021, the Commission approved a scheme to support deployment of passive infrastructure for mobile networks (SA.64394).

For More Information

The non-confidential version of the decision will be made available under the case number SA.103451 in the State aid register on the Commission’s competition website once any confidentiality issues have been resolved. The latest State aid decisions published in the Official Journal and on the internet are listed in the Competition Weekly e-News.

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