Commission sets out measures to encourage development of fast and ultra-fast broadband
02 November 2010
This article was included in the November issue
of Network - the Communications
sector newsletter
New measures
The European Commission has adopted three related measures
designed to encourage the development of high speed broadband
across Europe. The measures were introduced following commitments
made in the Commission’s Digital Agenda, whose Vice President,
Neelie Kroes said: “Fast broadband is digital oxygen, essential for
Europe's prosperity and well-being. These measures will help to
ensure that Europeans get the first-class internet they expect and
deserve, so that they can access the content and services they
want.”
The measures are:
1. A Commission Recommendation on Regulated
Access to Next Generation Access (NGA) networks. This aims to
stimulate investment in high speed fibre networks by establishing
“regulatory clarity” and a consistent approach across Europe.
2. A Commission proposal for a Decision by the
European Parliament and Council to harmonise the use of the EU’s
radio spectrum.
3. A Broadband Communication designed to ensure
that the broadband targets in the Digital Agenda are met.
Background
In March 2010, the European Commission adopted Europe 2020, its
strategy for “smart, sustainable and inclusive growth”. One of
Europe 2020’s flagship initiatives is its
Digital Agenda for Europe. A priority area for action outlined
in the Digital Agenda is to increase Europeans’ access to fast and
ultra fast internet. According to the Commission, only 1% of
Europeans have a fast fibre-based internet connection, compared to,
for example, 12% of Japanese and 15% of South Koreans. The
Commission has set a target of universal broadband access by 2013;
and by 2020, all Europeans should have access to much higher
internet speeds (30 Mbps or above) with 50% or more of European
households with access to internet connections above 100 Mbps.
High speed broadband requires optical fibre networks. Although
many telecoms companies are currently building such networks, many
of these projects are moving slowly or being held up by a lack of
investment, and regulatory uncertainty.
The three measures are intended to create a clear and supportive
environment for Member States to achieve the investment necessary
to meet these ambitious targets.
Commission Recommendation
The purpose of the
Commission Recommendation is to foster the use by Member States
of harmonised principles when regulating telecoms operators, while
also safeguarding competition, in the roll-out of fibre-based high
speed broadband networks. This is intended to create greater
certainty and clarity in Member States’ national regulatory
frameworks in order to encourage investment in NGA networks.
The Recommendation includes the following principles:
- Price regulation for access to fibre networks which reflects
investment risk and facilitates attractive returns (but with no
regulatory forbearance for dominant players)
- Availability to national regulators of a range of access
remedies from which to select the appropriate combination to drive
market entry and infrastructure based-competition
- Ex ante regulation which reflects competitive differences
between individual markets and between rural and urban areas
- Support for arrangements for co-investment in NGA networks and
permission to set lower access prices to the unbundled fibre loop
in return for up-front commitments on long-term or volume
contracts.
The Recommendation will take effect from publication in the EU’s
official journal at which point national regulators will be obliged
to take it into account in everyday decision making, as well as in
international co-operation (via the Body of Regulators for
Electronic Communications). Member States are required (under the
Telecommunications Framework Directive) to ensure that their
regulators take “utmost account” of such Recommendations and
justify (in writing) any departure from them.
Commission proposal on spectrum
management
The Commission
proposal sets out a five year strategy designed, in particular,
to ensure radio spectrum is available across Europe for wireless
broadband, both to bring fast access to areas where fibre networks
are not feasible and to promote innovative services. The areas
covered by the proposal include:
- Completion by Member States of the process of issuing radio
spectrum licences to telecoms operators wishing to use
already-harmonised spectrum bands (the 900/1800 MHz, 2.5 GHz and
3.4 – 3.8 GHz bands) for wireless broadband services and opening up
of the 800 MHz band to wireless broadband
- Various measures to encourage efficient spectrum
management
- Increased coordination across the EU in relation to aspects of
spectrum policy that have an impact on the use of wireless services
and devices across borders (such as medical equipment and
entertainment devices)
- Retention of spectrum for certain policy and research uses,
such as the environment, transport and public protection.
The proposal must now be considered by the European Council and
Parliament.
Broadband Communication
The Commission estimates that between €180 and €270 billion of
investment is needed in order to meet the 2020 broadband targets.
The
Broadband Communication is the Commission’s strategy and
guidance for Member States to generate investment in high speed
networks from both the public and the private sectors and
includes:
- A request to Member States to adopt a fully operational
broadband plan, to include measures designed to achieve the
necessary funding
- A call for regional and local authorities to reduce their costs
relating to the deployment of new infrastructure, and thereby to
promote investment (with associated guidance to follow)
- An announcement of new financial instruments for investing in
broadband, to be unveiled by the Commission and the European
Investment Bank (EIB) in Spring 2011
- Promotion of investment by public authorities (in line with
State Aid rules) and better use of EU structural and rural
funds.
Further UK developments
Since the measures were announced, Ofcom (the UK’s
communications regulator and competition authority) has set out two
principal decisions designed to promote competition and investment
in super-fast broadband services across the UK. These decisions
involve: (1) opening up BT’s fibre lines to allow them to be used
for competing services; and (2) requiring BT to allow access to its
underground ducts and telegraph poles so that competitors can
provide services both in areas that they will be able to supply
before BT can and in areas where BT has no plans to supply.
Ultimately these measures are all designed to benefit European
consumers (in the broadest sense) by:
- Giving them consistent access to high speed broadband services,
regardless of where in Europe they are based
- Providing a competitive market for such services, so that
consumers will always get the best value
- Allowing consumers to take advantage of the more advanced media
applications that are only available using such services.