EC investigates Numéricâble state-aid

The European Commission has opened an in-depth investigation to verify whether the transfer of public cable infrastructure between 2003 and 2006 by several French municipalities to the French Telecom operator Numéricâble was in line with EU state aid rules. As Numéricâble received the infrastructure for free, the transfers gave the company a huge economic advantage over its competitors and therefore constitute state aid. At this stage, the Commission says it doubts that such aid could be found compatible with EU rules and that the opening of an in-depth investigation gives interested third parties an opportunity to submit observations on the measure under assessment. It does not prejudge the outcome of the investigation.

A transfer of State property to a private company without appropriate compensation constitutes an economic advantage that competitors of that company do not have and therefore involves state aid in the meaning of the EU rules (Article 107 of the Treaty on the Functioning of the European Union (TFEU). The transfer of cable networks and ducts from an estimated number of 33 French municipalities to Numéricâble for free creates such an advantage and therefore involves state aid.

The Commission therefore said it needs to assess whether such aid can be found compatible with common EU rules that allow state support for certain objectives of common interest provided such support does not unduly distort competition in the internal market. At this stage, the Commission says it has doubts that such aid could be found compatible. The transfers do not constitute a Service of General Economic Interest (SGEI) because France has entrusted no public service obligation to Numéricâble. Furthermore, these transfers do not appear to further any objective of common interest in a proportional manner, while they have a high potential of distorting competition with other operators in the same area.

The Commission will now investigate further whether all municipalities have transferred cable infrastructure on the same terms. The Commission also stated it needs more information to establish the economic value of the networks and the ducts concerned.

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