TELECOMMUNICATIONS : INVESTIGATION INTO AMSTERDAM'SaBROADBAND NETWORK FUNDING.

The European Commission, on 21 December, announced that it had opened an in-depth investigation into the investment by the City of Amsterdam in building a glass fibre telecommunications network. This investigation will enable the Commission to determine whether the participation by the city, alongside private investors, constitutes state aid and, if so, whether such aid is compatible with the EC State Aid rules.

Together with private shareholders, Amsterdam is investing in an undertaking which will build a fibre access network connecting 37,000 households in the city. The project is a first step towards bringing fibre to the home ( FttH') all over Amsterdam (400,000 households). Retail operators can use this network to provide TV, broadband and telephony services.

The services offered via the new network will compete with existing offers by cable and telecommunications companies such as KPN and UPC. UPC and VECAI (an association of cable operators) have filed complaints with the...