Annexes to COM(2006)129 - Bridging the Broadband Gap - Main contents
Please note
This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2006)129 - Bridging the Broadband Gap. |
|---|---|
| document | COM(2006)129  |
| date | March 20, 2006 |
4.2. Rationale of public intervention
Action at all government levels can help to increase coverage in under-served areas. Nevertheless, the assessment of market failures is a difficult task, particularly when there is uncertainty over the pace of broadband deployment. The benefits from government intervention must therefore be clear and substantial, compensating for the risks of undesirable consequences. One risk is that, by picking particular technologies or defining particular services, some government programmes may inhibit technological development. Another risk is that government intervention may distort competition and affect commercial incentives to invest. Finally, given the current gap between coverage and take-up, people may simply not be willing to use the technology.
All these risks should be assessed when designing broadband initiatives involving demand stimulation and aggregation, grant and loan programmes, municipal initiatives and competition, etc. The analysis requires policy makers to review reliable broadband data on an ongoing and timely basis. Availability of mapping of infrastructure is particularly relevant.
Local governments are well placed to collect local information and aggregate local demand for broadband services. They know the local topography and may determine the optimal technology mix. They may facilitate the development of local services or launch pilot projects to explore new technologies. They may support the rollout of future-proof high-capacity infrastructure that is open to competitive service providers on non-discriminatory basis.
In conclusion, local/regional authorities are best placed to plan a broadband project that takes into account local needs and technological requirements. National broadband strategies need to be strengthened to involve and reflect local needs. As projects are scattered, local and regional authorities will also largely benefit from an increased exchange of best practices.
4.3. Available Instruments
Devising and implementing effective policy instruments to correct market failures or complement the action of market forces is a complex task. However, various instruments are already available at the EU level:
(i) Implementation of the regulatory framework for electronic communications : Broadband is developing most rapidly in liberalised markets. Enhancing competition is therefore the best way to stimulate the market to develop. In addition, given the importance of wireless solutions for rural areas, a more coordinated EU Radio Spectrum Policy could result in increased harmonisation and stimulate broadband developments.
Action 1 : Member States shall fully implement the regulatory framework for electronic communications, to enhance open access and facilitate competitive entry in rural areas. In the area of spectrum, the Commission is working with Member States to harmonise the technical conditions of use in the EU for broadband wireless access applications, with the aim to consolidate the single market and stimulate entry of innovative technologies.
(ii) Public funding: With the increasing level of public support for broadband initiatives, there is growing evidence that public intervention may accelerate broadband deployment in the less profitable areas, while ensuring, by means of open access requirements, that competition is preserved in the future.
Action 2: Public intervention in the forms of loans and grants, often as public-private partnerships, should be further developed in under-served areas. Fiscal incentives for subscribers should be explored by Member States, in compliance with competition rules and technological neutrality.
(iii) State aids and competition policy: public intervention may distort competition, and state-aid law provides an important set of rules to safeguard it. When the granting of state aid is envisaged, the project must be notified to the European Commission. The Commission will then assess its compatibility with the Treaty rules. There have already been a number of decisions regarding publicly funded broadband projects in rural and remote areas in which the Commission did not raise objections. A summary of those decisions can be found in Chapter 3 and Annex 3 of the Digital Divide Forum report. Deployment of open access infrastructure, defined according to technological neutrality and managed by an independent entity, appears to be the solution most conducive to effective competition.
Action 3: The Commission will further explain and disseminate its practice in order to provide guidance on state-aid rules applicable to broadband projects..
(iv) EU funding: Structural Funds and Rural Development Fund : At the EU level, Structural Funds and the Rural Development Fund contribute to the development of regional and rural areas that are lagging behind. Within the renewed Lisbon process, the Commission has proposed that the programmes supported by Structural Funds target investment in knowledge. Especially in remote and rural areas and in new Member States, Structural Funds aim at ensuring availability of ICT infrastructure where the market fails to provide it at an affordable cost and to an adequate level to support the required services. Above all, Structural Funds should aim at the spread of the Information Society through the balanced support of demand and supply of ICT products and services as well as through improved human capital. The balance of investment should reflect the existing gap between broadband penetration and coverage in the area.
Guidelines on the use of Structural Funds for electronic communications were published in 2003[15]. The new Rural Development Fund will also focus on forward-looking investment in human capital and innovation, including the take-up of ICTs in rural areas[16]. Rural development programmes can play an important role in ensuring that appropriate small-scale local infrastructure is put in place to connect major investments to local strategies for diversification and development of agricultural and food-sector potential. Only then will the intended multiplier effects be fully realised in terms of jobs and growth.
Action 4 : The Commission will organise a conference in the first half of 2007 to bring together the ICT and rural constituencies. The aim will be to better understand rural users’ requirements and create awareness of the potential of ICTs for rural development. In particular, it will focus on how rural communities and businesses can build on the opportunities created by improved ICT infrastructure and broadband access, and on the synergies between the Structural Funds and the Rural Development Fund.
(v) Demand aggregation and procurement : Uncertainty of demand affects expected returns on investment and inhibits commercial investment. Local authorities are well placed to organise a registration system and assess the local demand which can eventually be brought to the market. When collective demand within a community is not sufficient, municipalities may consolidate aggregation across several communities.
Action 5 : The Commission will launch a web site that will stimulate the exchange of best practices and facilitate demand aggregation. It will act as a central information platform, publishing calls for tender and providing a one-stop shop for best practice exchanges. The web site may become this way a virtual meeting point between suppliers and local governments. In particular, the web site could permit very sparsely-populated areas to coordinate demands for broadband, establishing a critical mass for technological solutions, such as satellite, that provide large coverage.
(vi) Fostering the creation of modern public services: All Member States support the development of on-line public services. In turn, development of innovative services stimulates user demand which facilitates infrastructure deployment. Development of modern online public services is a powerful instrument to drive broadband demand.
Action 6: Active policies at Member State and regional level to provide connectivity for public administrations, schools and health centres will create a critical mass of users, whilst stimulating demand by demonstrating benefits of broadband-enabled services. The Commission will take into account of the stimulation effect of e-government services in disadvantaged regions in preparing its Action Plan for e-government in 2006.
5. CONCLUSIONS
Widespread broadband access is a key condition for the development of modern economies and is an important aspect of the Lisbon agenda.. The European Union must step up its efforts to encourage take-up of broadband services and stimulate further deployment, in particular in the less developed areas of the Union.
This Communication invites all levels of government in the European Union to be more active in using the available instruments and technologies.
Member States are invited to update their existing National Broadband Strategies to provide additional guidance to all stakeholders. Their documents may well define targets in terms of coverage as well as take-up, on the basis of an active partnership with regional authorities, and exploiting synergies between alternative sources of funding (national, Structural Funds, Rural Development Fund). National broadband strategies should also set clear targets for the connectivity of schools, public administrations and health centres.
The Commission will monitor and organise discussions around these strategies within the i2010 High Level Group.
The Commission will continue monitoring the broadband digital divide by:
a) Analysing all the aspects of the "broadband divide" in the i 2010 annual progress reports and in the context of the e-Inclusion initiative planned for 2008;
b) Monitoring broadband developments in the new Member States and reporting on them in 2006.
[1] "Time to Move Up A Gear" The European Commission's 2006 Annual Progress Report on Growth and Jobs: http://europa.eu.int/growthandjobs/annual-report_en.htm
[2] COM(2005) 229
[3] Available at http://europa.eu.int/information_society/eeurope/i2010/digital_divide/index_en.htm
[4] M. O’Mahony and B. Van Ark, “EU productivity and competitiveness: An industry perspective”, http://www.ggdc.net/pub/EU_productivity_and_competitiveness.pdf.
[5] “Connecting Europe at High Speed: National Broadband Strategies”, COM(2004) 369.
[6] Comparable data on coverage in the new Member States are not yet available.
[7] DSL coverage denotes the percentage of population depending on switches equipped for DSL. The definition of DSL coverage includes individuals and businesses located too far away from the switches to be reached, overestimating effective coverage.
[8] In more general terms, at least 4.7 million would-be users are expected to be excluded by commercial broadband rollout in 2013. Cfr Annex 1, footnote 17.
[9] A detailed description of their characteristics can be found in Chapter 2 of the Digital Divide Forum Report.
[10] The Commission presented a new strategy for an optimal use of radio spectrum in Europe on 29.09.2005. See COM(2005) 400, COM(2005)411 and COM(2005) 461.
[11] COM(2003) 65, COM(2003) 673, COM(2004) 61, COM(2004) 369, COM(2004) 380.
[12] COM(2002) 263
[13] Available at http://europa.eu.int/comm/regional_policy/sources/docoffic/working/sf2000_en.htm.
[14] COM(2003) 673.
[15] Cfr footnote 13.
[16] The Commission presented a set of Community Strategic Guidelines for 2007-2013 (COM(2005) 299 and COM(2005) 304) targeting the next generation of cohesion policy and rural development programmes more on growth and jobs.