Speech – Building our Digital Single Market: 10 steps to deliver broadband

Neelie Kroes – Vice-President of the European Commission responsible for the Digital Agenda

CERRE (Centre on Regulation in Europe) Executive Seminar / Brussels

Brussels, 31-1-2013 — /europawire.eu/ — We are now approaching the mid-point of the digital agenda. It’s a chance to take all the knowledge and experience gathered in the last 3 years – and use it, focus it on what must be delivered. A chance to push our priorities to make the most of tomorrow’s opportunities.

Implementing that agenda could be worth 4 million jobs: we can’t turn our backs on that.

When we reviewed the digital agenda at the end of last year, it was clearer than ever to me where the priorities should lie. The overall strategy is the right one: but broadband needs to be at its heart. It’s digital oxygen: economic oxygen.

Because every day people discover the value of new digital innovations. The digital miracles that transform people’s lives, and boost businesses’ bottom line.

And that’s why 2013 will be the year of broadband. Because all those new services are built on that bedrock.

I’m in a fighting mood, and Europe can’t wait. If the last three years have shown me anything, it’s that broadband is essential to our future. That’s not something I can let go of. We must deliver that investment.

That’s not easy, and the EU can’t do it alone. Broadband may be a miracle, but there’s no magic wand.

But we can make it easier, using our Single Market. By smashing barriers, thinking big and helping companies to build their business case.

Quite simply: the more consistent the rules, the fewer the obstacles. The more consistent the environment, the wider your ambition can spread. In fact completing the telecoms single market could give us a boost of €110 billion a year.

If you’re looking to invest, you face many barriers: time-consuming planning rules; divergent network access prices and products; unavailable spectrum, or whatever. The solutions need to be just as varied. We need a strategic vision, and a programme of pragmatic actions: detailed, technical, thought-through.

But the benefits are clear. Remember that €110 billion jackpot: and let’s be in the game.

First, let’s remember where we are. At the end of 2011, 95.7% of EU households are in areas covered by “basic” broadband and 50% have coverage at 30 Megabits a second or faster.

That’s a promising start to build on. But still, that means too many Europeans going without.

In the coming months, and beyond, I plan a package of ten steps to make the European telecoms market more integrated, coherent, and efficient. Giving digital Europe its broadband boost.

First, for fixed broadband, stimulating that investment needs the right regulatory framework. Last July I set out just that: a package both flexible and balanced. With copper access, on average, staying stable – which evidence shows is the right approach. With stricter rules against discrimination, so all in the market get a level playing field. And, where the right competition safeguards are in place, there will be the flexibility to experiment with NGA prices: a must, given uncertain demand. Markets have responded positively, rules guaranteed until at least 2020 provide the stability for long-term planning and investments are already beginning to flow. We are still consulting BEREC on the detailed draft recommendation, and will soon be consulting Member States too. I look forward to their reaction and hope the final recommendation will be ready in July.

Of course, broadband is about wireless too and wireless needs spectrum. Once, Europe led the world in wireless communication: now we have fallen behind. Europe needs to regain that lead. I want it, we all want it. But our networks face enormous, exponential pressure.

So we will continue to implement the radio spectrum policy programme. Agreeing this programme was an important achievement, towards a more coherent, EU approach to spectrum. But now we have to deliver it. Like with a spectrum inventory, to improve the efficiency of spectrum uses and better satisfy future demand. Like ensuring 1200 Megahertz of spectrum for wireless broadband. Where Member States fail to authorise that spectrum, we will use our full Treaty powers. And, last autumn, we set out a way forward on the shared use of spectrum; because we need to get creative and flexible to make the best, most efficient use out of a limited resource.

And here’s a further step we’ll be taking, in line with that programme: our wireless action plan, due in early Spring.

Because the problem isn’t just identifying new frequency bands for broadband: we actually have to use them, and build the supporting infrastructure. And we need the greatest possible benefits for the whole ecosystem. That means making spectrum both available and assigned, and helping network roll-out, without excess duplication. It means enabling horizontal service platforms like cloud services and mobile apps. And it means supporting the vertical services that use wireless – like transport, energy and public services. Again: we need a European approach, an integrated one that makes your planning easier and your expansion plans possible.

Fourth, the EU budget can also support broadband roll-out. Very soon, we should know the outcome of budget negotiations, including for the “digital Connecting Europe Facility”. That could boost confidence, helping all kinds of investors make their business case – incumbents, alternatives, whoever. And connecting 45 million more households to fast broadband. So I hope that Member States see: this is an essential investment in our economic future – one that will pay back, with interest.

As well as cutting perceived project risk, though, I want to cut project costs. And much of that cost simply comes from civil engineering – the cost of mapping, of getting permits, of digging. If we cut those costs, we boost your business case – and that’s just what our proposed legislation will do. There are so many jobs, so many opportunities at stake if we become a connected continent. Let’s make sure the thing getting in the way isn’t just silly inefficiency: people digging up the road many times when they only need do it once. Complex planning rules that just make the whole project too costly. Or different rules between countries – even between regions! – that mean you lose time, and lose economies of scale.

Sixth, I know that many national and local authorities also see the benefits of investing in broadband. Last year, the Commission approved broadband state aid over €5 billion, a threefold increase. And, now we have new EU guidelines on broadband state aid. So that Member States can support broadband where markets won’t deliver.

Seventh, to boost trust in broadband services, we need informed choices. Transparency matters: consumers need to know what they’re getting.  Download speeds are a key issue for internet subscribers when choosing their contract: yet too many people reckon they aren’t getting the internet speed promised. Our forthcoming study, perhaps the first such across Europe, will show actual internet speeds, and help citizens and policymakers know the scale of this issue.

And alongside all this, I’ll be setting out guidance on net neutrality. I strongly support an Internet that is open, dynamic and innovative; with widespread access to full internet services. I am the first to say that, as it stands, there are untransparent practices and restrictions, such as blocking or throttling voice over IP on smartphones. Today we don’t have net neutrality: but we do need to use the right tools for the right job.

I am very wary of any attempt to regulate how the internet functions. Whether it’s by the EU or the ITU, whether it’s in Dublin or Dubai. So, though I am vigilant, my threshold for intervention is high.

I don’t want a country-by-country approach fragmenting the Single Market; and I don’t want today’s legal vacuum either. I want the EU to use the most effective tools at its disposal. National regulators already have the powers; I want to give them strong new guidelines. More transparency, and easier switching of providers, can give consumers genuine choices and real power. But I am also aware of the limits of switching, and my thinking has adapted accordingly: in my view, for choice to be real, every ISP should offer an accessible Internet service without application restrictions. I want the telecoms sector to evolve, so operators don’t restrict choice: but in fact have an incentive to increase it – through innovative added value services. For that very reason, we need to be very careful about the risk of closing off innovative service offerings.

Ninth, in the next six months, we will publish a new Recommendation on universal service in a digital society. Recognising that it can play a role bridging the digital divide, but that it is not a silver bullet. We should avoid undue market distortions, or mandating market players to deliver what could be costly, second-best solutions.

And finally, we will continue a host of actions to stimulate demand for broadband. For example, we are modernising copyright to make it is fit for the digital age, and fit for the Single Market: and indeed on Monday, we will open our urgent dialogue with stakeholders, to find market-based solutions by the year’s end. In March, we plan a Green Paper on Connected TV, to look at many of the possible economic, legal and technical impacts of this new technology: from competition to the Single Market, from interoperability to infrastructure. And, also in the very near future, we will unveil our European strategy for cyber-security. Because threats and vulnerabilities are rising, and they don’t respect national borders. Guaranteeing stable, secure networks will build trust and boost demand for online services.

That’s it. Our ten-point plan for broadband. No aspect alone fixes the problem. Together, they should transform the broadband picture, and transform our economy.

These measures are essential to achieving our targets. Our target of universal “basic broadband” coverage, by the end of 2013.  Of universal fast coverage by 2020. And of a continent where everyone, everywhere, can make the most of new digital opportunities.

We are in the digital age. But all those new digital ideas and innovations, products and services: they all run on the rails of broadband, fixed and wireless. And with the Single Market boost, we can make it easier to deliver.

But don’t assume that I will be complacent; don’t assume that even these ten are enough. My team in DG Connect continue to explore new ideas to make the telecoms Single Market more than just rhetoric. And 2013 will be the year when we test to the limit the ability of our current institutional machinery to deliver what is needed.

Tomorrow’s world is a connected world: no policy-maker, and no industry player, should be making plans on any other basis.

And with these ingredients, I hope that, together, we can become a connected, competitive continent. Thank you.