European Commission approves public funding of fiber network in France

The European Commission has approved public funding of a fiber optic network in the region southeast of Toulouse, France. The network will cost 2 million EUR to build.The European Commission has approved a 2 million EUR public funding of a fiber optic network in the region southeast of Toulouse, France.

The network allows access to all operators under transparent and non-discriminatory terms. It is also designed to provide a direct fiber optic connection to all participants, at speeds of at least 10 Mbps symmetrical.

Sicoval, an association of municipalities, will be providing 2 million EUR to a private consortium (Marais Contracting-Vinci-Alcatel) whose task is to build and manage the network. and offer wholesale access to telecom operators and public institutions in the region.

The Commission found that the proposed 2 million EUR funding did not violate rules against state aid because small and medium entreprises in the region had no alternative for high-speed broadband (the existing offerings were too expensive or did not meet their needs). The poor broadband conditions met the requirements of Article 87(3)(c) of the EC Treaty (aid to facilitate the development of certain economic activities) even though this is a region where some high-speed broadband services already exist.

What does this mean for other publicly funded fiber projects in Europe?

For a fiber network to qualify for public funding under EU state aid rules, it does not need to be in an area that is totally devoid of broadband infrastructure. There can be some broadband but if the prices are too high or the speeds are too slow for private companies and local government, the EU says it’s fine to use public monies to build out the network.