Ken Ducatel (DG Info Society): Local Broadband Policies in Europe - Public Action to Boost Growth and Stimulate Services

Local Broadband Projects: The role of public policy in stimulating digital growth

Ken Ducatel

Head of Unit “ Lisbon Strategy and i2010”

DG Information Society and Media

iBRUSSELS:

Urbanity And Technology,

Close Encounters Of A Certain Kind

30 April 2008

VUB, Brussels

Broadband and Economic Recovery: some key messages

Access to an affordable high speed broadband infrastructure fundamental element for individuals, enterprises and governments at all level

Broadband is key to maintaining social contacts, cultural and political participation, finding jobs, learning skills, accessing information, accessing markets and cutting costs.

ICT accounts for half the EU productivity growth : (broadband development could create 1 million jobs in Europe to 2015 and extra growth of €850bn)

Broadband and Economic Recovery

Europe needs to restructure its economy now

to be strong in the high-speed and low-carbon post-crisis economy.

Europe world leader in broadband take-up:

December 2008 penetration rate 23% Denmark, The Netherlands, Sweden and Finland among world leaders

But:

Large gaps between Member states and between regions:

Income, PC ownership, digital literacy, education, demographics, personal attitudes, cultural differences

Europe is falling behind on high speed broadband

P2P, Social Networks, IPTV, etc

Coverage of rural areas not complete

Average EU Member State coverage 93%. 30% of rural population no high speed internet

EU Broadband Penetration Rate January 2009 Korea January 2008 43,1 EU US and Canada Japan and 50 100 99,2 81,6 81,6 Broadband lines per region (million)

Least expensive Broadband offer for 1Mb access line 0 10 20 30 40 50 60 70 80 CY SK LT BG BE PL ES PT RO DK LU MT DE LV UK EE SI FI HU NL IE Total cost per month in €/PPP, VAT included January 07 Price of broadband offers in the EU vary considerably from a country to another: (taking into account PPP - purchase power parity)

Broadband penetration gap more and less developed M.S. From 8.5% in 2003 to 18.7% in 2005 and 28 points in 2008 Penetration gap widens : from 3.4 % points in 2003 to 20% points in 2008 8.5% 13.5% 19.2% 25.2% 31.9% 35.6% 7.6% 4.4% 1.4% 0.5% 0.1% 0.0% 3.4 20.0 16.3 12.8 8.6 5.9 0% 5% 10% 15% 20% 25% 30% 35% 40% 2003 2004 2005 2006 2007 2008 BB penetration level MAX MIN EU AVERAGE Diference in % points

Correlation broadband price/penetration EU 27 Inverse correlation prices/penetration ( higher broadband penetration lower prices) Other factors beyond price affect penetration (coverage, quality of service, income, education, PC penetration, etc. 0% 5% 10% 15% 20% 25% 30% 35% 40% 0 5 10 15 20 25 30 35 40 45 50 Least expensive price for a 1-2 Mbs monthly broadband access (€/PPP), April 2007 Broadband penetration, July 2007 EL: Out of scale. Data on prices for AT, CZ, IT, FR and SE not available DK SK BG PL RO LT HU LV MT PT SI IE ES EE DE UK BE LU FI NL

Broadband and Economic Recovery: EU actions

June 2008, Council calls on Member States to define ambitious targets for broadband penetration at the national level, to:

reach an EU average broadband penetration of 30%

and national penetration level of at least 15% by 2010

November 2008, the Commission proposes the Economic Recovery plan:

€ 5 bn for trans-European energy interconnections and broadband infrastructure projects

Commission, Member States and stakeholders to develop a broadband strategy

f ocus on under-served and high cost areas where the market does not deliver.

The aim:

reach 100% coverage of high speed internet by 2010.

upgrade existing infrastructure

promote competitive investments in fibre networks

endorse the Commission's proposals to free up spectrum for wireless broadband.

20 March 2009, European Leaders approve €1.02bn for Broadband and Innovative CAP Measures in Rural Areas and calls for EU strategy for Broadband .

The challenges ahead for an EU BB strategy

Move to a high speed internet

Open access and internet neutrality

Seamless access between fixed and mobile

Reaching 100% broadband

Urban rural gap is gradually being overcome: the 1 extra Billion Euro will contribute to this effort.

Take-up coverage gap

Next steps

Greater regulatory certainty for (potential) investors in BB

Agreement on telecom package

NGA Recommendation

State Aid Guidelines

Overall strategy by end of 2009

Exchanges of good practice B3 Project

Only thematic network on broadband in “Regions for Economic Change”

Regions leaning from each other: self-help

Demand aggregation: Yorkshire UK December 2008

State aid: (Catalo ñ a, 12-13 March 2009)

Synergies

with Broadband Platform: www.broadband-europe.eu on to-do list for broadband projects:

Help to non-partners (workshops, events and maintaining contacts for exchanging information and experience.

Conference in Turin (2-3 April) joint conference with the EC

Focus on B3 results

Information day for rural development authorities on €1 billion for BB

The role of the European Broadband Portal

http://www.broadband-europe.eu /

Portal aims:

to contribute to the opening and transparency of the broadband market in Europe

To act as a virtual meeting point between ICT suppliers and local and regional public authorities.

one-stop-shop information platform on broadband: facilitating the exchange of ideas, experiences and good practices. Includes the publication of calls for tender for publicly financed broadband projects from all over Europe.

Commission Support to B3 Regions