Documents considered by the Committee on 23 November 2016 Contents

10Digital Single Market: Promoting Wi-Fi in local communities

Committee’s assessment

Politically important

Committee’s decision

Cleared from scrutiny; drawn to the attention of the Business, Energy and Industrial Strategy Committee and the Culture, Media and Sport Committee

Document details

Proposal for a Regulation on the promotion of Internet connectivity in local communities

Legal base

Article 172 TFEU; ordinary legislative procedure; QMV

Department

Culture, Media and Sport

Document Numbers

(38078), 12259/16, COM(16) 589

Summary and Committee’s conclusions

10.1As part of its wider Digital Single Market Strategy, the Commission has proposed a wide-ranging Connectivity (Telecoms) Package aimed at improving internet connectivity in the EU.

10.2One of the legislative proposals of this package proposes direct funding support for local public authorities to install wireless access points and provide free high-speed Wi-Fi in public premises or spaces (‘WiFi4EU Regulation’). It aims to increase connectivity in areas where commercial communications providers are unwilling to invest. Potential beneficiaries include council offices, libraries, hospitals, museums, parks and squares. The Connecting Europe Facility budget has been increased by €50 million (£42 million) to fund the scheme from the Multiannual Financial Framework, and will be implemented and monitored at EU-level.

10.3To avoid displacing or duplicating commercial offers and undermining competition, the Commission states that the physical range of the Wi-Fi access will be limited to the public premise or area, and individual grants will fall below the £51,000 limit provided for in the Financial Regulation.

10.4The Minister of State for Digital and Culture (Matthew Hancock) supports EU-wide action that enables “local community participation in the Digital Single Market without prejudice to commercial offers”. He states: “the Government believes that the proposal is sufficiently targeted and specific to effectively fill specific gaps in digital coverage without adversely affecting the market or putting unnecessary administrative or cost burdens on central or local government”.

10.5As the Government is supportive of the WiFi4EU Regulation and considers that its limited scope means that it will not interfere with commercial offerings, we clear the proposal. We draw it to the attention of the Business, Energy and Industrial Strategy Committee in view of its predecessor Committee’s previous inquiry on the Digital Economy and to the Culture, Media and Sport Committee in view of its previous inquiry on UK Connectivity.

Full details of the documents

Proposal for a Regulation amending Regulations (EU) No. 1316/2013 and (EU) No. 283/2014 as regards the promotion of internet connectivity in local communities: (38078), 12259/16, COM(16) 589.

Background

10.6In its Digital Single Market Strategy of May 2015, the Commission announced its intention to review all existing telecoms legislation with a view to proposing reforms that facilitate investment in the infrastructure and connectivity necessary to ‘exploit innovations such as Cloud computing, Big Data tools or the Internet of Things’.

The Minister’s Explanatory Memorandum of 10 October 2016

10.7The Minister considers that the proposal does not raise any subsidiarity concerns:

“The Government believes that the proposal is justified in accordance with the principle of subsidiarity as set out in Article 5 of the EC Treaty. The proposal is part of a wider strategy to provide the entire EU area with high quality wireless connectivity, and develop participation in the digital economy by all local communities in the EU. The Government believes that the proposal is sufficiently targeted and specific to effectively fill specific gaps in digital coverage without adversely affecting the market or putting unnecessary administrative or cost burdens on central or local government.

“Current initiatives related to free local wireless connectivity are fragmented and there is no overarching strategy within the UK or the EU that includes providing free local wireless access points in every public premise or outside space. Implementing the proposal at EU level will deliver cost and administrative efficiencies associated with economies of scale. The proposal is designed to add further European value by ensuring that the infrastructure deployed also enable free public access to trans-European interoperable services such as the safer Internet service infrastructures and interoperable cross-border e-health services.

“Limiting the provision of connectivity to public premises and outside public spaces should mean a proportionate to the objective of enabling local community participation in the Digital Single Market without prejudice to commercial offers. The proposal involves a simple online application tool with support from a network of domestic Broadband Competence Offices to ensure that administrative burdens are minimised.”

10.8The policy implications of the proposed Directive are analysed as follows:

“As the proposal will be funded by and administered at EU level, there will be no direct burdens on central or local government. The government in principle supports the aims of this proposal. It offers direct support to a wide variety of local public bodies enabling them the opportunity to offer free high-speed Wi-Fi access to the public. This has the potential to support UK applications for smart, data-driven services for cities and communities, including by increasing the reach of access to those services. While the objectives of the proposal is to encourage participation in the digital economy by local communities, equally important is the need to meet the growing expectation from sections of the public that free Wi-Fi in public premises should be available as standard.

“No formal assessment has been made of the scale of the need for the proposal by public bodies in the UK, but as the proposal is demand-led this does not amount to an objection. BDUK’s SuperConnected Cities scheme has funded Wi-Fi access in over 1,000 public locations in 50 cities, along with Wi-Fi on a few city transport systems. The scheme has also triggered Wi-Fi concession projects in several cities. There may be, however, scope for extending connectivity of this kind further and the model proposed by the EC may be a suitable one.

“On the basis that the proposal limits Wi-Fi connectivity to public premises and spaces, there should be no adverse impact on competition. It is agreed that there may be commercial benefits for Internet Service Providers as local communities will be free to access paid services through free Wi-Fi access.”

10.9The Minister notes widespread support for the proposal amongst stakeholders:

“This proposal has arisen out of analysis of stakeholder feedback to the EC’s Communication setting out a European vision of Internet connectivity for citizens and business in the Digital Single Market and the legislative proposal reviewing the framework for electronic communications. The overall conclusion reached by the EC was that while removing regulatory barriers and identifying ways to incentivise investment, public funding support can still have an important role to play in achieving Europe’s long-term connectivity objectives.”

“Stakeholder feedback to the Commission showed that many public authorities and private respondents supported the deployment of Wi-Fi networks in public premises while also asking for an appropriate regulatory environment for issues such as access provider liability. CPs stressed that any public support should be technologically neutral, while emphasising that rollout could be facilitated by various forms of public-private partnerships.”

10.10The financial implications are set out as follows:

“The proposal will be fully financed through the Multiannual Financial Framework 2014–2020 with a total budget of €120 million (£102 million). This comprises €70 million (£47 million) reallocated within the programmed amounts for the telecommunications-strand of the Connecting Europe Facility over 2017–2020 and €50 million (£42 million) will be funded by making use of the Unallocated Margin. The proposal will operate on a demand-led, first-come, first-served basis and any future funding is subject to review.”

Previous Committee Reports

None.





28 November 2016