5 Broadband development in Europe
(31969)
13874/10
COM(10) 472
| Commission Communication: European Broadband: investing in digitally driven growth
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Legal base |
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Document originated | 20 September 2010
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Deposited in Parliament | 28 September 2010
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Department | Business, Innovation and Skills
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Basis of consideration | EM of 14 October 2010
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Previous Committee Report | None; but see (31638) 9981/10: HC 428-i (2010-11), chapter 28 (8 September 2010) and (31645)10245/10: HC 428-i (2010-11), chapter 29 (8 September 2010)
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To be discussed in Council | 2 December 2010 Telecoms Council
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Committee's assessment | Politically important
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Committee's decision | Not cleared; further information requested
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Background
5.1 An earlier Commission Communication of 19 May 2010, which
the Committee considered on 8 September, set out the Commission's
Digital Agenda for Europe the first of seven flagship
initiatives under the "Europe 2020" strategy.[39]
The "Europe 2020" strategy, which was launched by the
Commission in March 2010, is a ten year strategy for smart, sustainable
and inclusive growth, designed to prepare the EU for the challenges
that it will face over the next 10 years. It was endorsed by the
25-26 March 2010 European Council.
5.2 In unveiling its Digital Agenda for Europe,[40]
the Commission said that implementing its ambitious agenda would
contribute significantly to the EU's economic growth and spread
the benefits of the digital era to all sections of society. The
Commission noted that half of European productivity growth over
the past 15 years was already driven by information and communications
technologies and this trend was likely to accelerate. At that
time, Commission Vice-President for the Digital Agenda Neelie
Kroes said:
"We must put the interests of Europe's citizens
and businesses at the forefront of the digital revolution and
so maximise the potential of Information and Communications Technologies
(ICTs) to advance job creation, sustainability and social inclusion.
The ambitious strategy set out today shows clearly where we need
to focus our efforts in the years to come. To fully realise the
potential of Europe's digital future we need the full commitment
of Member States, the ICT sector and other vital economic players."
5.3 The Digital Agenda focuses on seven priority
areas, and foresees some 100 follow-up actions, of which 31 would
be legislative. The seven areas are:
creating
a digital Single Market;
greater inter-operability;
boosting internet trust and security;
much faster internet access;
more investment in research and development;
enhancing digital literacy skills and
inclusion; and
applying information and communications
technologies to address challenges facing society like climate
change and the ageing population.
5.4 At her press conference to introduce the Communication,
the Commissioner said that progress towards achieving the Communication's
objectives would be measured against a number of specific targets,
for example:
- by 2013, broadband coverage
for all EU citizens and, by 2020, fast broadband coverage at 30
Megabits per second for all EU citizens, with at least half European
households subscribing to broadband access at 100 Megabits per
second;[41]
- by 2015, 50% of the EU population should be shopping
online, with 20% of the population using cross-border online services;
- by 2015, regular internet use increased from
60% to 75%, and in the case of disadvantaged people from 41% to
60%;
- by 2015, halve the proportion of people who have
never used the internet (from 30% to 15%);
- by 2015, 50% of EU citizens should be using online
public services, with more than half of them returning filled
in forms via the internet;
- by 2020, doubling EU Member States' total annual
public spending on ICT Research and Development to 11 billion.
5.5 In his Explanatory Memorandum of 22 June 2010,
the Minister for Culture, Communications and Creative Industries
Department for Business, Innovation and Skills/Department for
Culture, Media and Sport (Ed Vaizey) welcomed what he described
as a comprehensive Communication and the forward looking strategy
it outlined, professed himself to be particularly pleased about
its focus on how to derive economic benefit from the use of ICT,
which he maintained was something the Government had pressed the
Commission on during its formation, and agreed that the priority
for the new EDA should be a focus on initiatives that derive maximum
leverage from ICT for economic growth and productivity. He also
supported actions that sought to resolve both access to, and increased
take-up of, the internet by EU citizens and businesses.
5.6 The Minister was, however, concerned that the
large number of proposed actions could cause a lack of focus and
dissipate effort, and thought that the Commission should have
applied a more rigorous regime of prioritisation, which he believed
would have ended up with a simpler, more achievable set of actions.
At the Telecommunications Council, he had therefore suggested
that the Commission, in conjunction with Member States, should
set out a route map for major items for example, and regularly
report progress to the Council, so as to ensure effective implementation
of this agenda.
5.7 The Minister was not in a position at this stage
to comment on all the proposals outlined in this Communication,
reflecting both that work was still being taken forward on policy
development but a lack of details in some of the proposals from
the Commission.
5.8 Among those upon which he commented, however,
were three Broadband targets, which he said were broadly in line
with the Government's policy:
- by 2013, basic broadband for
all Europeans, which he described as clearly consistent with the
UK Universal Service Commitment to provide access to a 2 MBps
service for all by 2012;
- by 2020, all Europeans to have access to speeds
of greater than 30MBps, which he said implied some involvement
of fibre in the access network and was at a "level of ambition"
consistent with the Coalition Agreement and subsequent policy
statements; and
- also by 2020, 50% or more of European households
to subscribe to internet connections above 100 MBps, which he
described as the most ambitious of the targets, and where he noted
that the average level of the implicit Fibre To The Home connection
(FTTH)[42] in Europe
according to the Communication was 1% (compared with 2% in the
USA, 12% in Japan and 15% in South Korea), which he said meant
that, in addition to removing investment barriers to allow coverage
to grow, would require demand-side action.
5.9 The Communication suggested taking measures including
possible legal measures to facilitate broadband investment, which
the Minister said were precisely the ones being considered by
the Government for example, passive infrastructure sharing,
co-ordination of civil engineering works and Member States fully
using EU Structural and Rural Development Funds.
5.10 Turning to the Financial Implications,
the Minister said that, although the Communication as such did
not have any, the Commission proposed to leverage more private
investment by doubling annual public spending on ICT research
and development from 5.5 billion to 11billion (£4.6
billion-£9 billion) by 2020. The Minister noted that, while
the Government saw R&D as a driver for growth, EU budget decisions
must be seen in the context of fiscal consolidation and good financial
management, with any increase being through reprioritisation away
from areas with low EU value added funding to be made; that negotiations
on the framework for the 2014-2020 EU budget would begin in early
2011, with agreement expected in 2012; and that the Commission
cannot enter into financial commitments for this period until
the negotiations have been concluded: the UK, along with other
Member States, would therefore seek to ensure that discussions
on policy areas in advance of those negotiations could not prejudice
the outcome of the negotiations.
5.11 The Minister concluded by describing the Council
Conclusions adopted at the 31 May Telecoms Council were as a set
of bland endorsements at a very high level that did not sign the
UK up to any particular part of the Digital Agenda, before the
negotiations on each of the proposals that form the EDA had taken
place,[43] and noting
that the Commission would now begin to publish the various proposals
according to the timetable.
Our assessment
5.12 We noted that: the Commissioner had also said
at her press conference: "The digital world affects us all
there is no choice about that. But we can take the decision
to use these changes to boost European growth, jobs and the well-being
of our citizens. That is the decision the Commission is taking
today, and we call on all those with a stake in this digital future
for Europe to join us in moving forward"; and that the extent
of this challenge was plainly set out in an associated Communication,
on the development thus far of EU communications markets, which
we also considered on 8 September, and which demonstrated just
how far the EU was from a single market in this area.[44]
5.13 We also cleared the document and look forwarded
to considering the upcoming Broadband and other proposals as they
were put forward.[45]
The Commission Communication
5.14 This Communication is part of the Commission's
"Broadband Package" for the roll-out of broadband and
fast- and ultra-fast networks in the EU. The other constituent
parts, which we consider elsewhere in this Report, are:
- a Commission Recommendation
on Regulated Access to Next Generation Access (NGA) Networks;[46]
- the proposal for a Decision of the European Parliament
and of the Council establishing a Radio Spectrum Policy Programme
(RSPP).
5.15 This Communication sets out a framework for
helping Member States meet the European Digital Agenda's broadband
targets for the EU. Its objective is to further assist the actions
of national and local authorities in achieving the optimal conditions
for the rollout of broadband across the EU. As foreseen in the
earlier Communication, the key targets are:
- by 2013 Basic broadband coverage
for all EU citizens;
- by 2020 All Europeans should have access to broadband
speeds of above 30 Mbps; and
- by 2020 50% or more of European households should
have broadband subscriptions above 100Mbps.
5.16 The Commission proposes the following Member
State actions on order to achieve the broadband targets:
- by 2011, in cooperation with
the European Investment Bank, issue guidance for local and regional
authorities on the use of EU funds for broadband projects;
- by 2011, adopt investment guidelines for local
and regional authorities to maximise use of EU funds for broadband
projects; and
- by end-2013, increase funding of high-speed broadband
through EU instruments such as the European Regional Development
Fund (ERDF) and the European Agricultural Fund for Rural Development.
5.17 The Commission also calls upon Member States
to:
- implement the Next Generation
Access (NGA) Recommendation and anticipate key aspects of the
European Radio Spectrum Policy Programme (RSPP);
- set national broadband targets and adopt operational
plans that are in line with the European broadband target, which
the Commission intends to review the in 2011; and
- take national actions to reduce broadband investment
costs.
5.18 The Communication begins by setting the background
against which this strategy is set. It notes that world demand
for high speed broadband is fast-growing, driven by the increased
downloading of video from the Internet and the use of more graphically
advanced websites. Along with download speeds being important
in this context, equal consideration needs to be given to the
need for higher upload speeds and lower latency.[47]
Due to this, the Commission believes that high speed broadband
will play a key role in economic recovery and as a platform to
allow innovative new services and applications flourish throughout
the EU. It is this belief that has driven the Commission to set
out the targets and actions contained in the Communication. Several
examples cited of existing and developing services that require
such high speed connections include:
- "smart"electrical
grids (which can cut consumer spending on energy and allow for
more effective network management);
- real-time "cloud based" computing services[48]
(which can be used by small businesses to lower costs); and
- data intensive e-health applications (allowing
health-care professionals to use remote techniques and share information
more readily).
The Communication notes that, in the view of the
Organisation for Economic Cooperation and Development (OECD),
the cost of savings in the transport, health, electricity and
education sectors alone would justify the construction of a national
FTTH network.
5.19 After considering issues relating to the technology
and market developments associated with current broadband delivery
fixed copper or cable networks, wireless networks, e.g.
Third Generation (3G) and fixed wireless access (Wifi or Wimax)
the Commission notes that the Next Generation Access Recommendation
and transposition of the new Telecommunications Framework[49]
should provide regulatory certainty and so promote investment
and competition over such networks. The Commission calculates
that upgrading current networks to meet the target of 30Mbps for
all by 2020 will cost 38 billion to 58 billion (£32.7
billion to £50.0 billion), and between 181 billion
and 268 billion (£156.0 billion to £230.9 billion)
in order to meet the third target of 50% of households subscribing
to 100Mbps by 2020.
5.20 The Commission then examines the various elements
considered necessary for success of the strategy. EU broadband
policy should foster investment in new networks and enhance infrastructure
competition. The Commission accordingly intends to work in cooperation
with Member States to produce effective national broadband plans,
especially as very few Member States have strategies for super-
and ultra-fast broadband. Member States' plans should incentivise
and supplement private sector action by ensuring that the revised
Telecommunications Framework is properly implemented in order
to provide regulatory certainty in order to encourage further
investment and include policies that assist private investment
in broadband (e.g. rules that allow sharing of infrastructure
and targeted financing measures that reduce risk and promote new
open infrastructures). Member States' plan should also include
clear guidance on the use of EU broadband funds and European Investment
Bank instruments in eligible Member States. Updated digital competitiveness
reports and a new "digital agenda scoreboard"' with
detailed performance indicators will enable Member States to monitor
and compare broadband plans.
5.21 The Commission then examines a variety of ways
to minimise investment costs, including:
- making the installation of
new passive infrastructures and "in-building" wiring
a requirement for planning authorisations;
- coordinating civil works so that new networks
can be installed at the same time as repairs or new duct installation;
- simplifying regulations and procedures to enable
further roll-out of wireless infrastructures;
- ways in which national and local authorities
could support broadband deployment through direct public investment
that would take into account State Aid rules;
- cooperation with the Body of European Regulators
for Electronic Communications (BEREC) to ensure they include measures
to increase the rollout of broadband as a priority in its 2011
work programme;
- supporting the construction of broadband infrastructures
and Internet take-up through both EU Rural Development and Structural
Funds;
- promoting Wireless Broadband, by making radio
spectrum more widely available;
- developing broadband finance instruments, in
conjunction with the EIB.
5.22 In his Explanatory Memorandum of 14 October
2010, the Minister for Culture, Communications and Creative Industries
(Ed Vaizey) fully supports the Commission's analysis of the role
which broadband will play a key role in economic recovery and
is supportive of the overall objectives of the Communication.
He continues as follows:
"The Government's objective is to have the best
superfast broadband network in Europe by 2015. To achieve this
task the Government is encouraging and supporting investment in
rural and difficult to reach areas at the same time as market
players are investing in more densely populated areas. The Government's
policy is broadly consistent with the EU's targets and is likely
to meet to meet them ahead of most other Member States."
5.23 With regard to calls on Member States to set
out national broadband plans, the Minister says:
"The Government has articulated a vision and
will set out in a strategy document, the interventions planned
to achieve the Government's vision. This should take the UK a
long way towards achieving the specific EU targets. The Government
plans to publish the strategy document before the end of 2010."
5.24 The Minister also supports the EU's recommendation
that Member States should take actions that promote investment
in broadband networks and reduce investment costs:
"The specific suggestion that Member States
should take action to promote infrastructure sharing is consistent
with the approach that the Government has been pursuing. Ofcom
has been consulting on access to BT's 'ducts and poles' in the
context of its review of wholesale local access."
5.25 The Minister then says that the Government has
sought views on the capacity for infrastructure sharing with other
utilities in a discussion document published in July 2010 and
is consulting on the implementation of the EU Framework Directive[50]
which would assist with the goal of collecting data on the
location of passive infrastructure. The Minister says that the
Government is also looking actively at some of the other interventions
suggested in the Communication including the re-use of public
sector networks and assets.
5.26 The Minister also welcomes the commitments the
Commission has made in the Communication in respect of European
funding, noting that, in developing its approach, the Government
wishes to make use of all available sources of funding to support
private sector investment in broadband networks.
5.27 The Minister says that:
¾ neither
a consultation nor impact assessment is required as the Communication
does not contain any legislative proposals, but
¾ the
Government will undertake any necessary consultations and an impact
assessment to determine the costs and benefits to business and
other stakeholders if legislation is required to take forward
any elements of this Communication.
5.28 With respect to the Financial Implications,
the Minister notes that the proposed financing instruments to
complement existing resources for financing of broadband infrastructure
would require dedicated resources and that the Commission says
that these dedicated resources could be provided by an EU contribution:
"It is the UK Government's position that any
proposals for additional funding from the EU Budget should respect
the current Financial Framework ceilings and offer good value
for money, particularly in the current economic climate. The Government
cannot support proposals calling for funding post-2013 as this
could prejudice the 2014-2020 Financial Perspective negotiations.
These decisions should not be made in isolation of wider EU issues."
5.29 The Minister concludes by noting that the Communication
will be the subject of Council Conclusions at the December Telecoms
Council.
Conclusion
5.30 We are reporting this Communication to the
House because of the importance of its subject matter.
5.31 Though it raises no legal or political issues,
we note and endorse what the Minister has to say about the financial
aspects. We would therefore like him to write to us before the
Telecoms Council meeting with as much information as possible
about the Conclusions that he expects to be adopted, and to say
in particular if he is confident that they will include the necessary
caveats that he sets out above.
5.32 Until then, we shall retain the Communication
under scrutiny.
39 See http://ec.europa.eu/eu2020/pdf/COMPLET%20EN%20BARROSO%20%20%20007%20-%20Europe%202020%20-%20EN%20version.pdf
for details. Back
40
See http://ec.europa.eu/information_society/digital-agenda/index_en.htm
for full background. Back
41
A megabyte per second (MB/s or MBps) is a unit of data transfer rate. Back
42
Fibre to the Home: a network where the final connection to the
subscriber's premises is made of optical fibre. This technology
is currently replacing copper-based networks. Back
43
The conclusions are available at http://www.eu2010.es/export/sites/presidencia/comun/descargas/may31_pressreleaseEN.pdf. Back
44
See headnote: (31645)10245/10: HC 428-i (2010-11), chapter 29
(8 September 2010). Back
45
See headnote: (31638) 9981/10: HC 428-i (2010-11), chapter 28
(8 September 2010). Back
46
In common parlance, the NGA Recommendation. Back
47
The time taken for data to get from one designated point to another. Back
48
Cloud based computing is the use of software, platforms or infrastructure
offered by web based service providers to perform tasks on the
Internet often performed in-house. A Cloud can be either publicly
owned as is the case with Google web tools such as Gmail and Google
Docs or it can be privately owned and operated generally by a
company. There are presently three types of Cloud based services:
Infrastructure-as-a-Service (e.g. Amazon Web Services and SliceHost,
which provide virtual server instances based on technologies provided
by the Vmware and Xen etc); Platform-as-a-service in the cloud
( a set of software and product development tools hosted on the
provider's infrastructure, e.g., GoogleApps); and Software-as-a-service
cloud model (which leverages the vendor hardware infrastructure
and their software product to provide a complete service to and
end user such as Hotmail and Gmail). Other examples of cloud based
services and technologies include: Storage - Amazon S3, Ubuntu
One, Microsoft SkyDrive; Mapping - Google maps, Yahoo Maps, MapQuest;
Telephony Services (VOIP) - Skype, Razortel; Business Tools -
SugarCRM, Salesforce, Mail, Spam Filters; and Hosting Providers
- Slicehost, OpSource, Rackspace. For further information, see
http://randomitblog.blogspot.com/2009/10/what-is-cloud-based-computing.html. Back
49
Member States must have transposed the new provisions of the Telecoms
Framework by May 2011. Back
50
The Framework directive is one of five directives that form the
regulatory framework for the electronic communications sector
in Europe. It is referred to in this document as the Telecoms
Framework. Back
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