Brussels, 30/05/2007 (Agence Europe) - The European Commission on Wednesday approved an initiative in the city of Prague to create a municipal wireless network for electronic communications. The initial project raised some concerns over competition, but slight changes have since been made to it. The project will only serve the public sector and will provide free public broadband access to public sector websites and non-commercial content, such as online public services. In light of the changes made to the project, the Commission has concluded that it does not constitute state aid.
A complaint made by private operators led the Commission to undertake a preliminary investigation into Prague's project to install a wireless network. The project will have an overall budget of around €12 million, spread over a period of five years. This will enable WiFi technology to be installed in around one third of the Prague area. It will consist of a local wireless network using unlicensed frequencies and will provide short-distance broadband access around so-called “hotspots”. The initial project, which envisaged commercial use of the network, could have raised some issues from the point of view of state aid, as public provision of unlimited free or subsidised internet access would risk excluding investments from private operators. During the preliminary investigation carried out by the Commission and following the opinion issued by the Czech Competition Authority (UOHS), the Czech authorities modified the project considerably. They also confirmed that they would notify the Commission for approval of any future commercial use of the network before putting them into effect. The Commission concluded that the operation in its current form does not constitute the granting of state aid because no economic advantage is granted to the selected service provider, to the public sector content providers, or to the public or businesses using the network. (ol)