The Commission has approved a Spanish scheme worth 88.3 M € to support connectivity in rural areas

The European Commission has approved, under EU State aid rules, an €88.3 million Spanish scheme made available through the Recovery and Resilience Facility (‘RRF’) to support the provision of wholesale services and retail broadband services in remote rural areas in Spain.

The measure is part of Spain’s strategy to address the needs of citizens and businesses in the context of the digitalisation of the country. The scheme also contributes to the EU’s strategic objectives relating to the digital transition.

The Spanish measure

The scheme, which will run until 31 December 2027, will be partly 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 support to remote rural areas in Spain to achieve broadband connectivity with a download speed of at least 100 Mbps.

The scheme is designed as a temporary solution to facilitate and accelerate access to performant fixed broadband services at affordable prices. The measure will support the provision of wholesale services and on that basis the provision of affordable retail broadband services at a fixed location with download speed of at least 100 Mbps and upload speed of 5 Mbps. The measure will be applied in remote, dispersed and sparsely populated rural areas where there is no coverage with such speeds at affordable prices.

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Under the scheme, the aid will take the form of direct grants to electronic communication operators. Beneficiaries will be selected on the basis of an open, competitive, transparent and non-discriminatory selection procedure. The aid will cover part of the wholesale price reducing it to a level comparable with wholesale prices in more profitable areas. The operators benefitting from lower wholesale prices will in turn provide retail services at a price no higher than a predefined maximum price per monthly subscription to the relevant retail broadband services. The measure will also finance the costs directly related to the end users’ access to that service, including the purchase of user equipment, its installation and operation up to a maximum price, independently of the technology used.

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 affordable performant broadband services in remote and sparsely populated parts of Spain. The existence of a market failure has been assessed through a mapping of available broadband infrastructures and services, as well as through a public consultation carried out by the Spanish authorities. The identification of target areas under the scheme will be annually reviewed by the Spanish authorities.

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• The measure has an incentive effect. It will support the take-up by end users of performant broadband services in areas where the prices of such broadband services are much higher than the prices charged in more populated 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, under the scheme, the beneficiaries will be selected by means of an open, competitive, transparent and non-discriminatory selection procedure. In addition, the measure ensures a fair, open and non-discriminatory access to the subsidised wholesale services.

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

More information: European Commission – Press release