TELECOMMUNICATIONS : GENERAL COURT CONFIRMS LEGALITY OF FRENCH BROADBAND AID.

The EU General Court has dismissed the case brought by several telecommunications operators challenging the legality of French aid for very high speed broadband in the Hauts-de-Seine Department, an administrative area near Paris(1). It confirmed a European Commission decision of 2009 and clarified its case law on economic services of general interest. Paris planned, in 2008, to grant 59 million in compensation for the public service costs of establishing and operating a very high speed broadband network to compensate for the heterogeneous nature of this department in economic, sociological and infrastructure terms. This task and the subsidies were to be assigned to a group of undertakings, Sequalum SAS, chosen under a competitive tendering procedure. The operation was notified to the Commission, which declared it compatible after concluding a 15-month preliminary investigation.

Colt Telecommunications France, Orange (ex-France Telecom), Iliad and Free, which operate in this department, found the duration of the investigation extremely long and indicative of serious difficulties. The General Court rejected this procedural argument because the duration of the two-month preliminary inquiry must be calculated from the date of receipt by the Commission of the complete notification by the member state. In this case, noted the court, since the EU executive requested additional information, the notification was complete only once the last information was received, ie 10 August 2009. The two-month deadline, which began to run from that date, was met because the contested decision was handed down on 30 September 2009.

COMPATIBILITY

The applicants also maintained that the subsidies are incompatible with EU law. The court dismissed their arguments because the four criteria defined by the Court of Justice in the Altmark case are met (see box). First, the THD 92 project pursues an objective of general interest and was established on account of a market failure, meaning it can be classified as a service of general economic interest (SGEI).

It went on to explain that the member states have wide discretion in determining what they consider to be an SGEI, as long as its obligations satisfy certain minimum criteria, such...