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State Aid

State aid: Financing of broadband network in the municipality of Skeiða- and Gnúpverjahreppur approved



The EFTA Surveillance Authority has found that a project to construct a Next Generation Access (NGA) broadband network in the municipality of Skeiða- and Gnúpverjahreppur, in the south of Iceland, is compatible with the state aid provisions of the EEA Agreement.

After having assessed the project, the Authority concluded that it will contribute towards offsetting a geographic and commercial disadvantage in this rural area which would not otherwise be addressed via market-based solutions in the near future. The measure is also aimed at promoting the competitive supply of innovative and high-quality NGA broadband services across the Municipality.

When state resources are used to finance such projects, it is important to ensure thriving competition on the subsidised networks, so that citizens and local businesses can benefit from continuously improving broadband services at competitive prices. Ms Oda Helen Sletnes, President of the EFTA Surveillance Authority, said.

In 2012, the Municipality Council of Skeiða- and Gnúpverjahreppur decided to finance the construction of an NGA fibre broadband network. The construction part of the project was tendered out. The municipality further set up a company to operate the network. All interested operators can have wholesale access to the network on equal terms. 

The Authority began looking into this matter following a complaint. The assessment has shown that the design of the project and the possibilities for effective wholesale access ensure that any distortion of competition caused by the state intervention is kept to the minimum possible.


Today's decision will be published in the register of state aid decisions on the Authority's website, normally within a month.


For further information, please contact:

Mr. Andreas Kjeldsberg Pihl
Press & Information Officer
tel. (+32)(0)2 286 18 66
mob. (+32)(0)492 900 187


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