Decisions on public funding in the broadband sector Ketill Einarsson 21 May 2014 Please note that any views or opinions expressed in this presentation are strictly personal and do not necessarily reflect the official position of the EFTA Surveillance Authority
What makes the Authority react? • Own initative • Complaints • Notifications • Co-operation with the European Commission
Procedural rules and Best Practice • Pre-notifications (2 months) • Notifications (2 months) • Complaints (12 months) • Transparency, predictability and efficiency
Statistics – Broadband cases European Commission • 130 Decisions (since 2003) • Mostly notifications EFTA Surveillance Authority • 5 Cases (3 Decisions) • 3 Notifications, 2 Complaints
Broadband cases
The Tromsø case – 2011 • NGA (FTTH/FTTB) network • Rural areas (white NGA) • Market consultation • Mapping and coverage analysis • Open tender • 94 million NOK (11 million € )
Procedure (Tromsø case) March 2011 – Pre-notification 19 April 2011 – Notification 6 June 2011 – Formal request for information 17 June 2011 – Reply from Norway 13 July 2011 – The Authority adopts a decision
Compatibility (Tromsø case) White NGA Area – no plans by private operators Well-defined objective of common interest Proportionality Strict wholesale access obligations Wholesale pricing requirements = Balancing test fulfilled
Conclusion (Tromsø case) “Projects of financial support by the EFTA States to roll-out high speed broadband networks based on the newest technology, if carefully designed, in particular by making use of a public tender procedure, can benefit from the Authority's approval under the state aid rules,” - Ms Oda Sletnes, President of the Authority
Broadband in rural areas of Iceland - 2013 • “ Háhraðanettengingar til allra landsmanna ” • Administered by the Telecommunications Fund • 1 118 White buildings identified • Later additional 670 buildings • Tender by the State Trading Centre
Procedure (Rural areas of Iceland) • February 2011 – Complaint received • October 2011 – An interested party submits additional information • 2011-2013 – The Authority gathers information from the Icelandic authorities • 10 July 2013 – Formal investigation opened (Decision 302/13/COL)
Compatibility assessment (Rural areas of Iceland) (Preliminary views in Decision 302/13/COL) • Well-defined objective of common interest • Aid was the appropriate instrument • Adequate mapping and coverage analysis However: • Questions concerning the expansion of the project • Wholesale access requirements unclear
Preliminary conclusion (Rural areas of Iceland) • “[…] the Authority’s preliminary conclusion is that it cannot exclude that the lack of a clear and effective wholesale access obligation with clearly defined pricing principles gave the network operator a disproportionate advantage that may cause distortions of competition.” = Necessary to open a formal investigation
Skeiða- og Gnúpverjahreppur – 2013 • Complaint – Ábótinn ehf. • Small municipality (172 homes) • Co-financing by the Municipality and Landsvirkjun • Network operated by a ”SPV” Fjarskiptafélag Skeiða- og Gnúpverjahrepps
Procedure (Skeiða- og Gnúpverjahreppur) • 28 November 2012 – Complaint received • Two information requests • 13 November 2013 – Positive Decision adopted • Decision 444/13/COL
Assessment (Skeiða- og Gnúpverjahreppur) • White NGA area • Objective of common interest • Tender procedure • Technologically neutral • Passive, neutral and open
Conclusion (Skeiða- og Gnúpverjahreppur) “ When state resources are used to finance such projects, it is important to ensure thriving competition on the subsidised networks , so that citizens and local businesses can benefit from continuously improving broadband services at competitive prices ,” - Ms Oda Sletnes, President of the Authority
Míla v EFTA Surveillance Authority • Lease of NATO optical fibres • Tender procedure – Vodafone successful • Míla complained • In November 2012 ESA found that there was no aid involved – market price was paid
Findings of the EFTA Court (Míla) • Judgment 27 January 2014 • “[Price] was accorded a relative weight of just 15%. Moreover, […], the remaining selection criteria appear to reflect public policy or regulatory considerations. They do not appear to be criteria that a similarly situated private operator would consider relevant when tendering out a lease.” • The Authority’s decision was annulled
Other cases • Two notifications received this year • Iceland – Regional projects • Norway – Nationwide scheme • Increased awareness
Main insights Consulting with the Authority at an early stage A proper mapping analysis and market consultation An open and transparent tender procedure Clear wholesale access and pricing obligations Regional projects v nationwide schemes New General Block Exemption Regulation
www.eftasurv.int
Recommend
More recommend
