EU speech on "Strategies to boost broadband in Europe"

Telecoms Commissioner Likkanen gave Dermot Ahern and his buddies a talking to in Italy today:
"SPEECH/03/385

Mr Erkki Liikanen

Member of the European Commission, responsible for Enterprise and the Information Society

"Strategies to boost the Broadband in Europe"

Informal Telecoms Council

Viterbo, 4 September 2003

Introduction

Ministers, Ladies and Gentlemen,

First of all, I want to congratulate the Presidency on the choice of the topic and the timing of this informal Telecoms Council. The new regulatory framework is in place since end of July.

We have now drawn important conclusions from both the eHealth conference in May in Brussels, and from the eGovernment conference in July in Como; and both were ground-breaking events; and we held 2 workshops on broadband.

Member States now have a good basis for preparing their broadband strategies by the end of this year.

This morning I want to focus on how I see these national strategies within our overall Information Society policy.

But let me first say how pleased I am to address this enlarged meeting. I have come to appreciate the way the new Member States are moving forward in the use of ICT's, enhancing their performances, increasing the efficiency of their administrations, and modernising their economies.

Our policy for the information society, has 3 pillars:

through a predictable legal environment, we give certainty to investors, we can increase competition, consumers' choice, and stimulate innovation.

through the Research programme for Information Society Technologies, we invest in long-term competitiveness. The 1st call for proposals has just been concluded.

and through eEurope, we promote the use of ICT to accelerate productivity growth and strengthen inclusion.

Why?

This is not about technology for technology's sake. But because higher productivity means higher real income, more competitive companies, and more resources for public services.

But, as we saw in the Como conference, to yield real productivity gains, the process must be accompanied by organisational change and investment in skills. And this process is slower than technology investment. Firms can take a long time to adopt them, changing organisational arrangements, implementing effective business processes. And it is even more true for public administrations.

For any reform of organisation, commitment at the highest level is vital, whether we talk about government or business.

How?

By implementing eEurope.

With eEurope 2002 we increased connectivity, and we made a lot of progress.

With eEurope 2005 the aim is to move Europe to high-speed Internet, In eEurope we concentrate on both the supply- and the demand-side.

On the supply-side this means:

firstly, focusing on broadband availability. Again not for technology's sake, but because the efficiency of ICT and the Internet is radically improved by broadband technologies. The functionalities offered by broadband will change the way companies operate. The possibilities offered by broadband will change how public administrations function and interact with citizens. Widespread broadband is a fundamental condition to attain higher productivity.

secondly, when we move to broadband, we move to an 'always-on' world. We become more vulnerable. The security of networks is therefore a top priority.

The demand-side approach is about stimulating the use of broadband by developing services, applications and content:

firstly, we concentrate on eGovernment, eHealth, and eLearning. We have chosen these 3 areas, because here government can make a difference, and together they account probably for almost 40 % of national budgets.

secondly, by aiming at the development of innovative content.

We have some very recent, still preliminary, data on broadband which this afternoon we will make available on a bilateral basis to delegations. One figure to mention here is that in just one year broadband connections in the EU almost doubled: from 9 million in July 2002, to 17.5 Million in July 2003. This means growth of almost 100 %. And we have four countries with a higher penetration rate than the USA.

National broadband strategies

At the Spring Summit in March this year the commitment to act for broadband was taken. Concretely it means, that:

national strategies need to be in place by end 2003; and

a substantial increase in broadband connections must be achieved by 2005.

The Commission will report to the 2004 Spring Summit on the progress.

Where should these national strategies start from?

We need a clear map. That is what we did in the 60ies, in those countries with vast and scarcely-populated areas, to ensure that electricity would become available everywhere.

The first step is to analyse in detail in what part of the territory broadband is available, to identify under-served areas.

Then, an assessment needs to be made on how the different technologies can be used to achieve full coverage. You need the different technologies or a mix of them for different areas.

This assessment should be accompanied by a reflection on the effective degree of competition. Effective competition is key to deployment and take up.

Finally, this allows to analyse where market forces can guarantee the availability of broadband and where public intervention is required.

Let me now expand on some of the guiding principles that are key for a successful strategy:

Competition - between operators and between platforms:

The national strategies should be in line with the new regulatory framework. In particular we have to increase competition and respect technological neutrality:

* Increasing competition is crucial to safeguard the strong innovative character of this market.

* Technological neutrality is also key because, it allows provision of new services and leads to competition between different access methods, known as facilities-based competition. In the mid to long-term this is the best way to lower prices, increased choice of services, and further innovation. It is a prerequisite for widespread broadband availability.

Public intervention only when needed and in respect of competition and technological neutrality:

Unfortunately, we do not have a competitive marketplace everywhere. In many rural and remote areas, geographical isolation and low density of population can make the upgrade of existing infrastructure to broadband capability unprofitable, at least in the short to medium term. It is in these areas that governments may step in.

Any planned intervention should conform to the principle of technological neutrality. Any ex ante choice of a given technology should be avoided. Technological choice must result from local and geographical needs.

There is no single technology able to ensure a complete coverage of the whole of the EU. Only through an approach based on multiple and interoperable platforms will we be able to achieve full geographical coverage. DTV with an appropriate return channel; wireless - both 3G & Fixed Wireless Access - ; Wi-Fi; satellite; Fibre-To-the-Home, even powerline, together with those that are today the strongest: ADSL and cable. Different technologies should compete and complete each other.

Substituability and complementarity of technologies have important implications. Substituability implies that, when the market sustains more than one provider, competition in infrastructure, services and content will be key to lower prices, higher quality, innovation, and choice. Complementarity implies that, in less populated areas, exploitation of different characteristics of technologies will facilitate coverage.

In the afternoon I shall talk about funding the infrastructure in under-served areas.

But let us keep in mind that infrastructure alone is not enough. We need demand. People want content, applications and services; they are not interested about the technology.

Policies that enhance demand

The private sector is ultimately responsible for the development of applications that stimulate demand. However, governments play an important role also in driving broadband use especially in the areas of eGovernment, eHealth and eLearning.

Finally, eEurope 2005 requires all public administrations, including hospitals and schools, to be connected to broadband. Pooling demand in this sense is known as demand aggregation.

Conclusions

I have tried to summarise the key elements that should be considered in the national strategies.

Of course, creativity in policy making is always desirable, as long as rules from the regulatory framework and competition law are respected.

Thank you for your attention. "

Its a handy summary to quote back at people