Brussels, 20/07/2006 (Agence Europe) - The European Commission has decided to prohibit public funding for the planned construction of a fibre access network in the Dutch town of Appingedam. The project concerns an area already served by broadband networks, and the Commission considered that the aid was not necessary to remedy either a market failure or unaffordable prices for broadband services. The Dutch broadband market is one of the most advanced in Europe in terms of service coverage, innovation and competition. In Appingedam, various broadband offers are already provided by two existing networks (KPN and cable), at prices similar to those of other regions in the Netherlands. The Commission considered, then, that the planned aid would distort competition and harm private investment to an extent which would outweigh the positive effects of the project. The investigation revealed, among other things, that the terms of the investment envisaged by the municipality did not correspond to market conditions. This is the first time that the Commission has declared a subsidy for a broadband network incompatible with state aid rules. As the construction of the network has not yet started, no aid will have to be recovered.