The European Commission is investigating a joint venture between the province of Trento and Telecom Italia to see if EU state aid rules are being followed in the creation of a fiber optic network. Trento plans to inject the project, “Trentino NGN,” with €50 million and Telecom Italia would turn over its currently operating copper infrastructure and upon completion would become sole owner of the venture. Commissioner Almunia stated that while public money spent on improved broadband is a good investment, “public funds are not [to be] used to favour one market player,” and “alter competitive market conditions.”
Commission suspicions are based on the fact that no private investor has shown interest in the areas targeted by the new network, possible hidden advantages for Telecom Italia, and doubt that return on investment for Trento is “in line with market conditions.”
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