WRITTEN QUESTION E-2929/97 by Elly Plooij-van Gorsel (ELDR) to the Commission (17 September 1997)

Subject: European subsidy for Netherlands undertaking

It is reported that Flevonet, a Netherlands undertaking that has been offering free personal access to the Internet since 18 May 1996 in the province of Flevoland, has received a one-off European subsidy of 350 000 guilders. It has also received subsidies from private firms. The province of Flevoland has granted a loan of 50 000 guilders for the initiative.

1. From what funds did Flevonet receive the European subsidy?

2. Was this matched by the minimum 50% national counterpart financing? If not, why not?

3. Is a one-off European subsidy to an undertaking that uses it to offer free Internet subscriptions, even when that undertaking's prospects of continuing in business are uncertain, compatible with the Structural-Fund objective of promoting long-term development?

Answer given by Mrs Wulf-Mathies on behalf of the Commission (27 October 1997)

1. A subsidy of 350 000 guilders (about ECU 159 000) has been allocated to Flevonet from the European regional development fund (ERDF) in the framework of the objective 1 programme for Flevoland. The project is supported under priority 8 (research and development), measure 2 (realisation of a network of telecommunication centres).

2. The total cost of the Flevonet project is 1 443 990 guilders (about ECU 656 359). ERDF contributes 24% of the total cost. This is under the financial limits indicated for measure 8.2: 'ERDF will grant aid up to 50% of the costs to establish these facilities (investment). ERDF may also make a contribution of 25% to the operating costs of the centres for the first two years of operation'.

3. Flevonet is the digital computer network in Flevoland. It is a single network for the province, with free admission for all residents in Flevoland after fixed connection charges of 49.50 guilders (ECU 22.5). Other interested parties that want to use Flevonet (especially enterprises) have to pay in order to do so. The computer network is also mentioned in the regional technology plan developed for Flevoland. This report concludes that '.... in order to keep pace with the digital revolution it is necessary for Flevoland to lower the thresholds for entrance to computer networks and databases. A special facility has to be created for this purpose'.

Facilities were necessary for the setting-up, management and operation of the network. For this reason Flevonetwerken BV was founded. The feasibility of the project was tested by PTT Telecom and Intercain telematics consultants. Their recommendations were positive, subject to noting the possibility of a shortfall in earnings during the first years.

The Flevonet project has, after one year of operation, over 10 000 connections (0-accounts), which is twice to three times the national average. Until now 160 paying accounts have been opened, which is at the moment insufficient to cover all expenditure. The expectation is that the number of paying accounts will increase substantially in the near future.

The Commission is of the opinion that the project meets the objectives of the structural funds. An ERDF contribution was necessary for the realisation of the computer network. The feasibility of the project was tested in advance. The project contributes to the introduction and acceptance of information technologies and their application in society. The project may function as a catalyst for the development of other projects in the field of information technologies in Flevoland, such as tele-working.