EU ‘quizzing BT’ over state aid allegation

By:
Alan Burkitt-Gray
Published on:

Newspaper reports complaint to European Commission over alleged illegal UK government aid to BT

The European Commission is questioning the UK government about state aid to BT, which the Commission believes may breach rules on state aid.

The Daily Telegraph says it has seen a letter from the Commission to the UK government asking it “to defend its tax treatment of BT’s telecoms infrastructure against claims it unfairly favours the former state monopoly over rivals”.

Capacity has not seen the letter, which relates to a complaint from an unknown source, and neither BT nor the Commission are commenting.

An unnamed government spokesman told the Telegraph: “We have been informed by the EU Commission of a complaint concerning the granting of alleged state aid in the telecoms sector related to business rates.”

Business rates are a form of tax applied in the UK to premises and other business assets, including telecoms infrastructure. After a revaluation, owners of copper infrastructure – primarily BT – are facing a steep increase, though new fibre will be exempted for a five-year period under legislation now being considered by the UK Parliament. Fibre belonging to BT, Virgin Media and other operators will be covered by the new law.

“The Commission have previously ruled that state aid is not present in the business rates system for telecom companies,” the government official told the Telegraph. “Given the complainant has presented no new evidence, we are confident the Commission will conclude that this latest complaint is also unfounded.”

In 2011 the European Commission and then the European Court of Justice rejected a previous complaint, filed by Vtesse, now part of Interoute.