State aid: Commission approves €3.8 billion Italian scheme under Recovery and Resilience Facility to support deployment of Gigabit networks

(Source: European Commission)

The European Commission has approved, under EU State aid rules, a €3.8 billion Italian scheme made available through the Recovery and Resilience Facility (RRF) to deploy high-performing gigabit networks in areas of the country where there is no current or planned network able to provide at least 300 megabits per second (Mbps) download speed. The measure is part of a comprehensive strategy that Italy has put in place to address the needs of citizens and businesses in the context of the digitalisation of the country. It will also contribute to the EU’s strategic objectives relating to the digital transition.

Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “This €3.8 billion Italian scheme will support the deployment of high performing networks in currently underserved areas in Italy. It will enable consumers and business to access high-quality Internet-based services, contributing to the economic growth of the country, while ensuring that competition is not unduly distorted.”

The scheme will be entirely funded via the Recovery and Resilience Facility (RRF), following the Commission’s positive assessment of the Italian recovery and resilience plan and its adoption by the Council. The Italian Recovery and Resilience Plan includes important investment projects in the electronic communications sector, among which the deployment of performant fixed and mobile networks. The scheme approved today concerns the fixed networks.

The scheme will run until 30 June 2026 and support will take the form of direct grants. The measure will finance the deployment of networks offering speeds of 1 gigabits per second (Gbps) download and 200 megabits per second (Mbps) upload in areas in Italy where there is no current or planned network able to provide at least 300 Mbps download speed.

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

Italy notified the support measure for assessment by the Commission under State aid rules. The Commission found that the measure amounts to State aid in favour of electronic communications services providers, and therefore assessed it under 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 to address market failures resulting from the absence of current or planned broadband networks that would adequately address end-users’ needs. The existence of a market failure has been assessed through the mapping of currently available and planned infrastructure, as well as through a public consultation. The measure also has an incentive effect, since it facilitates the deployment and operation of fixed high-performing networks in areas in which private operators are not willing to invest due to high deployment costs, which are not balanced by forecasted revenues. Finally, sufficient safeguards to avoid any undue distortion of competition are in place. In particular, the measure ensures the respect of the principle of technological neutrality by not favouring any technology over the others. Furthermore, Italy will identify the beneficiaries by means of an open, transparent and non-discriminatory competitive selection procedure and will encourage the reuse of existing infrastructure. The measure fosters competition by ensuring wholesale access to the supported networks.

On this basis, the Commission concluded that the scheme is in line with EU State aid rules.

Background

All investments and reforms entailing State aid included in national resilience and 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 which are part of 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 also contributes to the EU’s strategic objectives set out in the Gigabit Communicationthe Communication on Shaping Europe’s digital futurethe Digital Compass’ Communication, and the Commission’s proposal for a decision establishing the 2030 Policy Programme ‘Path to the Digital Decade’.

For More Information

The non-confidential version of the decision will be made available under the case number SA.63170 in the State Aid Register on the Commission’s competition website once any confidentiality issues have been resolved. New publications of State aid decisions on the internet and in the Official Journal are listed in the Competition Weekly e-News.

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