Here are the authors’ recommendations:

It is recommended that the EU consider each item [that is the subject of the consultation] (electronic identification, electronic authentication and electronic signatures) separately.

Each Member State of the EU has implemented the Directive on electronic signatures in a different way, taking into account their legal and cultural norms. The way the Directive has been implemented has not caused e-commerce to fail. No evidence has been put forward to suggest that e-commerce between Member States is not effective because of the way electronic signatures are implemented in different Member States. It is recommended that in relation to Directive 1999/93/EC of the European Parliament and of the Council of 13 December 1999 on a Community framework for electronic signatures, OJ L 13, 19.01.2000, p.12, the EU either:

• repeal the Directive, or
• alter the Directive to be a Regulation, or
• repeal those parts of the Directive dealing with the technical details relating to advanced electronic signatures and qualified electronic signatures.

For more information, please see the complete article.

However, there is a substantial gap between Europe and other developed economies, such as South Korea and Japan, in terms of the pervasiveness of next generation broadband access. A renewed effort and commitment is required to bridge the divide, but most importantly, to also stimulate economic growth through broadband infrastructures and services.

There are clear challenges to face – deployment costs, demand uncertainty, and regulatory inefficiencies – but the difficult time that Europe is currently facing requires an exceptional effort in order to drive growth. This effort calls for a more synergic collaboration between the private sector and the public sector in order to accelerate the penetration of next generation broadband access, and transform the urban and rural areas of Europe into a single, unified smart continent.

Next generation broadband- Europe

24 April 2012

Creating a smart Europe through next generation broadband access will alleviate economic pressures and make the EU globally competitive, argues Frost & Sullivan’s Saverio Romeo

Throughout 2011, the debate on information and communication technologies (ICTs) policy was particularly lively. Professionals, experts, academics and policymakers have seen ICT as a necessary tool to mitigate the impact of challenging economic conditions. The argument was that ICT can enable economic growth, better provision of public services, and an improved quality of life for citizens.

From this perspective, we have seen increasing attention given to concepts such as smart transportation, smart healthcare and smart cities. These concepts revolve around the aim of making the environments in which we live and work more intelligent. Among them, the notion of the ‘smart city’ was extremely popular during 2011. This was partly driven by numerous analyst forecasts that suggested that the majority of the world’s population will live in cities or large urban conglomerates.

These ‘megacities’ require intelligent infrastructure and services – and therefore will become smart because they are always connected, sensed and analysed in order to optimise services, improve operational performance and enable innovation, which in turn enables economic growth and job creation.¹

A driver of ‘smartness’ and economic growth
Next generation broadband access is the backbone of the envisaged ‘smart’ world. As a result, the attention on deployment of next generation broadband access in Europe continues to be very high. This is clearly highlighted by the political initiatives introduced by various European public sector organisations at different levels of public administration – all of which aim to transform Europe into the fastest connected region in the world.

This political vision is also strongly supported by the argument that next generation broadband access has a clear economic impact, and the academic and business literature that sustains this argument is vast.² For example, Koutroumpis shows that for each 1% increase in broadband penetration, GDP increases by 0.025%.³ On behalf of the government’s broadband council, the Swedish research centre for electronics and communications, Acreo, recently ran research on the socioeconomic impact of Fibre to the Home (FTTH) investment in Sweden. The study demonstrates that the investment will generate economic gain in less than three and a half years. Marco Forzati, Senior Researcher at Acreo, emphasised the positive results, saying: “The actual return is expected to be greater than calculated in the study when indirect and induced economic effects are likely to increase over time also due to effects not currently quantifiable”.⁴

Next generation broadband access in Europe
Sweden represents an advanced case in terms of broadband penetration and, particularly, next generation broadband access in Europe. At the end of June 2011, fixed broadband penetration in Sweden was 31.9%, 28% of fixed broadband subscriptions were based on fibre optics with fibre optic network coverage reaching 10%, and mobile broadband penetration was 93.6%. Combining all of this data, Sweden is the leading EU state regarding the adoption of broadband connections.

In terms of the deployment of next generation broadband access through FTTH, Europe shows a clear lag in comparison to other economies. For example, Japan is the most advanced country in terms of next generation broadband access deployment – with 61% of connections through fibre optics, while FTTH network coverage reaches 86.5%. South Korea follows with 57% of FTTH connections out of total broadband connections and 67% coverage. The top adopter of FTTH in the EU, meanwhile, is the Slovak Republic, with such connections accounting for 30% of overall broadband and coverage reaching 20%.

Key economies in the EU are therefore considerably behind Japan and other leading countries – for example, in Germany only 0.52% of broadband connections are FTTH; in France only 0.71% are; and in Italy only 2% are. Japan and South Korea also lead in the adoption of mobile and wireless broadband with a penetration of 80% and 99.3%, respectively.

However, in this case the gap is less sharp than the one illustrated in that for fibre optics. In the EU, the Scandinavian region performs extremely well, as in the example of Sweden. However, key European economies are far from the astonishing Asian numbers: 44.4% in the UK, 42.4% in Italy, 38.2% in France and 29.2% in Germany.⁵

Good intentions and serious challenges
‘Smart Europe’ is far from a reality. Certainly the Digital Agenda, which has been highly emphasised by EU Commissioner Neelie Kroes, has increased the political attention on the issue. This has, in turn, driven the design of several initiatives and infrastructure roll-out projects all over the EU – for example, Scotland’s Digital Future, Information Society 2010-2013, the National Strategy for the Broadband Access in the Slovak Republic, the Lombardy Region Plan for Regional Broadband, Somerset e-Strategy, and Superfast Cornwall.

Despite the vast spectrum of initiatives, the road towards a ‘smart Europe’ is overshadowed by some challenges, particularly those that revolve around the question of how next generation access deployment will be funded. Market players struggle to justify the business case for the infrastructure deployment, as the costs are high. The large majority of costs – from 65% to 75% out of the total cost of deployment – are related to civil work. In the UK, civil works for nationwide fibre optic network deployment is anticipated to cost between €20-30bn. These high deployment costs are not counterbalanced by business models that enable clear returns. It is difficult to predict demand for products and services that either do not exist or are embryonic. Therefore, designing successful revenue models is a real challenge for telecoms providers. In addition, regulations can affect operators’ ability to generate revenues. For example, regulations on advertising, interconnection tariffs and wholesale agreements can all have an impact on revenues from next generation broadband access. ⁶

Among all of these issues, stimulating investment is probably the most important one to face. The economic recession has added uncertainty to the availability of funds for next generation broadband access. In the current socioeconomic context, the resurgence of private-public partnerships can be a valuable route to drive next generation infrastructure deployments. They can also avoid a divided ‘smart Europe’. In highly urbanised areas, these challenges can be more easily faced due to higher levels of certainty regarding demand; while in peripheral and rural areas, they are exacerbated by a lack of high demand. As a result, telecoms providers are already postponing their coverage strategy for rural areas.

A ‘smart Europe’ at two speeds should be avoided as it will exacerbate the economic divides that already exist within the continent. Next-generation broadband access and ‘smart Europe’ should be opportunities for stimulating growth in geographic areas that are already struggling from a socioeconomic perspective. Exploring alternatives (ie satellite, WiMAX, PLC) to fibre optics should be considered.

The road towards ‘smart Europe’
An intelligent and innovative Europe cannot be built without its backbone: next generation broadband access. European policymakers at all levels – regions, states and the EU as a whole – are conscious of this. This awareness has been transformed in various political initiatives, from the EU Digital Agenda to regional initiatives.

However, there is a substantial gap between Europe and other developed economies, such as South Korea and Japan, in terms of the pervasiveness of next generation broadband access. A renewed effort and commitment is required to bridge the divide, but most importantly, to also stimulate economic growth through broadband infrastructures and services.

There are clear challenges to face – deployment costs, demand uncertainty, and regulatory inefficiencies – but the difficult time that Europe is currently facing requires an exceptional effort in order to drive growth. This effort calls for a more synergic collaboration between the private sector and the public sector in order to accelerate the penetration of next generation broadband access, and transform the urban and rural areas of Europe into a single, unified smart continent.

¹Frost & Sullivan Research (2010), Megatrends 2020
²J Alleman, P Rappoport (2007), The Future of Communications in Next Generation Networks: The Unsustainability of Access Competition. International Telecommunications Union (ITU); M Cave, L Prosperetti, and C Doyle, (2006), Where are we going? Technologies, markets and long-range public policy issues in European communications. Information Economics & Policy, 18(3), 242-255; P Koutroumpis, (2009), The Economic Impact of Broadband on Growth: A Simultaneous Approach. Telecommunications Policy, 33, 471-485. L Waverman, (2007), Benefiting from Convergence: Access, mobility and ubiquity. A discussion paper for the Canada Roundtable on the Future of the Internet Economy, Ottawa
³Page 447 in P Koutroumpis, (2009), The Economic Impact of Broadband on Growth: A Simultaneous Approach, Telecommunications Policy, 33, 471-485
⁴Acreo and Bredbandsforum (2011), Pre-study on the effect of FTTH Investment in Sweden, http://acreo.se/en/News/News-Archive/2011-05—/Fiber—-a-good-investment-for-society
⁵Data based on Frost & Sullivan Broadband Research and OECD Broadband Portal
⁶T Ragoobar, J Whalley, D Harle (2011), Public and private intervention for next-generation access deployment: possibilities for three European countries. Telecommunications Policy, 35, 827-841

• Do we need industrial policy to achieve Digital Agenda targets?  Will the market deliver the Commission’s broadband targets on its own or should policy-makers be more pro-active?  Should we favour fibre-to-the-home or be technology neutral?  Should pricing be used to incentivise investment in NGA? Should policy-makers favour “infrastructure competition” or a “one-network” approach?  Delft University of Technology presents new research and other high-level stakeholders from industry and regulators debate the pros and cons of different approaches.
• Access pricing and non-discrimination: How could proposed new rules from the European Commission on access pricing and non-discrimination affect ultra-fast broadband deployment
• Could entrants win the fibre race?: Under what circumstances can new entrants get ahead and is the business case sustainable?
• Infrastructure competition and technologies: where are the limits? Presentations on the future capabilities of fixed and mobile technologies and case studies on fibre and cable roll-out. Is infrastructure duplication a realistic and desirable objective?
• Enabling fibre roll-out: financing and demand – exchange of views with equity and bond investors and infrastructure funds on factors influencing investment decisions. Are the interests of investors and consumers in conflict or can they be made to coincide?
• Ownership, separation and equivalence: an assessment of outcomes achieved through different models ranging from functional separation in the UK, to “independent” utility fibre investors, to Government as the network owner to co-investment by multiple telcos. 

“we’ve continually lengthened copyright terms from 14-28 years as set out by the Statue of Anne in 1710 to “lifetime plus 70 years” today.“: http://blogs.telegraph.co.uk/technology/adrianhon/100007156/infinite-copyright-a-modest-proposal/

“The Patient Protection and Affordable Care Act, which President Obama signed on March 23, 2010 now authorize the Food and Drug Administration to approve generic versions of biologic drugs and grant biologics manufacturers 12 years of exclusive use before generics can be developed.“: http://www.news-medical.net/health/Drug-Patents-and-Generics.aspx

It can’t be morally right to have patents lasting 12 before copying (ie, sharing more cheaply) is legal, while a piece of music or book are locked-down for lifetime plus 70 years, yet through our laws, this is the reality.

This is the crux of what is wrong with current IPR/copyright law today and why DRM, copyright, etc, needs to be rolled back to a more suitable and moral level, such as was the case in 1710 when we evidentially were a more civil society.

What is fundamentally morally right, should be legal, not illegal.

We need people like Natalia Kurop @NataliaKurop1, Michel Barnier @michelbarnier, Marc van der Ham @Marcvanderham, European Parliament @Europarl_EN, European Commission @EU_Commission, László Andor @LaszloAndorEU, Martin Schulz @MartinSchulz, John Clancy @EUJohnClancy, Ryan Heath @ECspokesRyan, William Hague @WilliamJHague, Digital Agenda @DigitalAgendaEU, Neelie Kroes @NeelieKroesEU, Viviane Reding @VivianeRedingEU, and David Martin MEP @davidmartinmep to recognise this, and act in the best interests of society

There seems to be a big hope in the EU that citizens will buy goods online from other countries and the EU are even measuring it – 9%, which is 25% up on 2008 – but why? Isn’t it enough that citizens are buying the best goods at the best price without adding delivery miles?

The Commission is also announced as publishing a strategy on stimulating ‘cloud computing’ in 2012, although this seems to be more about innovation and the single market than ‘green’ or anything else, which since we have enough problems with introducing ‘cloud’ into English government, without considering cross-border ‘clouds’.

One good piece of news is that the Commission is reviewing the State Aid Guidelines on Broadband Deployment, which have caused some grief in England – I’m sure if these were made clearer it would help everyone! Similarly the proposal for Rural Development for 2014 – 2020 allows for access to ICT and very high-speed broadband in rural areas, which if made simpler would benefit areas like the one I work in.

Strangely there is also a demand that public sector websites are fully accessible by 2015 and that proposals around this should be released by the EU in the next six months, and that in the six months after there is planned to be a single instrument on the topics of eSignatures, eIdentity and eAuthentication, which may be amusing given the UK’s lack of anything substantial for government along with hardcore resistance to it doing anything.

• keeping people healthy and active for longer has a positive impact on productivity and competitiveness
• innovation can help make the healthcare sector more sustainable and find new cures for health conditions
• the healthcare sector has an important role to play in improving skills and creating jobs as it employs 1 in 10 of the most qualified workers in the EU
• with a projected 45% increase in the number of people aged 65 and over in the next 20 years, financing rising healthcare costs and access to a dignified and independent life for the aging population will be central to the political debate.

The Digital Agenda for Europe focuses on developing and using digital applications. Under the banner ICTs for social challenges, the Agenda includes plans to improve the quality of care, reduce medical costs and foster independent living among people who are sick and disabled.

Four key actions relate to health:

• Action 75: Give Europeans secure online access to their medical health data and achieve widespread telemedicine deployment
• Action 76: Propose a recommendation to define a minimum common set of data
• Action 77: Foster EU-wide standards, interoperability testing and certification of eHealth
• Action 78: Reinforce the Ambient Assisted Living Joint Programme

State Aid and Broadband GL Submission Click on Link to read full submission

Specific Comments on DG COMP Questionnaire

The following partial responses draw on the general comments above. 

Question 1.3 The development of the ‘free’ business model and the ‘utility’ model should be considered within the Guidelines.

Question 2.2 The Guidelines should consider the possibility of the application of the utility model to these long lasting and long technology life cycle components of B+NGAB. The resultant lowering of prices would clearly serve the objectives of the Commission and the EU regarding affordable and widespread generalised access to B+NGAB.

Question 3.3 The plans should be backed by significant performance guarantee bonds payable to the local authorities when the plans are unfulfilled.

Question 4.1  Competition in B+NGAB being limited to geographically limited areas [for example two thirds of the UK population live in around 10% of the land mass] does to function in a manner similar to ‘traditional’ markets. There are no incentives to address the entire market. New entrants only need to undercut incumbents in the most attractive markets. Far greater incentives or more active public intervention is required outside these limited areas.

 Question 5.1 There are always difficulties with incumbents and the difficulties rise with the degree and intensity of vertical integration of incumbents.

 Question 5.2 Access to all technological possibilities is required 

Question 5.3 At least 7 years. More realistically an obligation for the entire technology life cycle of the component of B+NGAB.

 Question 5.4 Multiple fibre infrastructures are highly unlikely to materialise in white areas and are improbable in grey areas without state aid. Effective open access to fibre priced on the utility [or even free model] will provide for competition in the provision of service, applications and content.

 Question 5.6 A requirement that the recipient applies a utility [or free] business and pricing model to network infrastructure.

 Question 6.1 NRAs could assist authorities in ensuring the business and pricing model of the response to 5.6.

 Question 8.1 Separation would ease the application of a utility [or free] business and pricing model to network infrastructure. It would also provide opportunities for investors seeking such risks, returns and appropriate asset backing.

 Question 8.2 Public ownership and social enterprises using utility or free models should be allowed for in the Guidelines in white areas where there is a clear market failure. There is also a case for similar arrangements in grey areas, in particular where the incumbent does not transparently price the network infrastructure component of B+NGAB according to its technology life cycle.

 Specific comment on existing Guidelines

Art 51 (g) This exercise does not take into account the technology life cycle of the network infrastructure component of B+NGAB, obliging bidders to replicate the business models of incumbents rather than applying valid alternative models.

You and your Region have the opportunity to influence the Community Guidelines for the application of State aid rules in relation to rapid deployment of broadband networks!

Do you believe the rules should be changed to provide the State Aid and Public Sector financial support needed and guarantee the superspeed infrastructure required across Europe over the next 9 years ?

HOT ISSUES – discuss your views here – gather support – submit your responses to DG COMP.

• Should incumbents be forced to collaborate with the competition?
• Should new suppliers of dark fibre be taxed for every metre installed?
• Should governments and LA’s who fund next generation networks with public money retain ownership or at least a “golden share”.
• Should the 7 Year Rule be dropped?
• Should “White Areas” be defined as < 20Mpbs simultaneous download and upload [Germany]
• Should there be a National Broadband Fund for community intiatives? [USA]

All responses must be with DG COMPETITION before the closing date: 31st August 2011.

* “all stakeholders to submit their views on the basis of the questionnaire. Please in particular mention individual paragraphs in the draft if you wish to make specific comments.”

Questionnaire bg cs da de el en es et fi fr hu it lt lv mt nl pl pt ro sk sl sv (Rich Text Format)

We have provided some examples in each of the discussions to kick things off but bear in mind the context of this consultation is limited to the role that public authorities of EU funds can have in the funding of broadband and high speed infrastructure.

We do not wish to describe these models in any “greater” detail as this would add significant complexity and result in the definition of multiple “alternatives”.

We do seek to capture your comments, suggestions, alternatives, issues, ideas and insights – that are generally attributable to a source (in order to give “context” to the opinion)

You can add your comments here and / or join the discussions over on EBPII

Background

The Digital Agenda for Europe has set up ambitious targets on the deployment and use of high speed broadband infrastructure and services. It is obvious that these are ambitious objectives which will require a substantial amount of investment and efforts both from private and public domains. Although amounts are difficult to calculate, in the broadband communication the Commission gave a rough estimate of the investment required, based on recent studies.

The estimate indicates that between € 38bn and € 58bn would be needed to achieve the 30 Mbps coverage for all by 2020 (using a mix of VDSL and next generation wireless) and between € 181bn and € 268bn to provide sufficient coverage so that 50% of households are on 100 Mbps services[1].

The size of the investment represents a real challenge. This is because the benefits for society as a whole appear to be much greater than the private incentives to invest in faster networks. 

Private investment is currently targeting mainly urban areas. However, there are vast parts of Europe which are rural, remote or sparsely populated. To satisfy the needs of these communities, new models of investment in high speed networks are arising particularly at local and regional level.  This is particularly relevant within the context of rural and regional development as the availability of open, competitive, affordable and good quality broadband networks is a key element for the long term sustainability and competitiveness of less advanced regions and rural areas.

The sentence above captures the essence of the dilemma that surrounds the issues at stake in the investment in broadband and most importantly in high speed networks in areas affected by market failure.

These issues are particularly important in for public authorities in charge of areas (mostly rural, less advanced and remote) where the market does not provide these networks at a sufficient speed, to an adequate quality and at an affordable cost. When deciding about their intervention, public authorities need to make a choice among those investment models that most further the interests of the communities: households, enterprises, public entities and the territory as a whole.  Their aim is to provide their territory with access to suitable ICT infrastructure and services that would allow them to prevent de-location and depopulation (particularly the departure of young population), but to also to attract investment (foreign and national) and sustain their long term competitiveness and attractiveness with respect to their competitors across the globe.

The European Broadband Portal is hosting an on-line consultation of the blogosphere on the basis of a very preliminary description of the models of broadband investment. This consultation will take place between the 1^st  and the 31 of May and will involve a very wide range of different stakeholders and in particular public authorities involved in the management of EU funds.

NB: The context of this consultation is limited to the role that public authorities of EU funds can have in the funding of broadband and high speed infrastructure in areas where these infrastructure are not provided by market players at a sufficient speed, quality of service or at an affordable price to sustain services that are crucial to achieve the aims of regional and rural development.

How many of us have never been shocked or at least a little worried about the extra costs incurring our business, leisure or other necessary trips abroad? It can be especially irritating when one travels to locations which are in a lot of cases are difficult to even be conceived as “abroad”, such as Copenhagen, Denmark, which you reach in half an hour by a train from Malmö, Sweden. The EU today in many senses can be felt like one big country, without border check-points in twenty-five states and with Euros in your wallet which can be used in sixteen member-states. No wonder that often, crossing the border, we won’t remember to watch the balance on our mobile phones unless warned by a text message from a thoughtful mobile service provider. However, with recent developments, it seems that this aspect of EU citizens’ lives has drawn close attention of one of the EU bodies.

The European Commission Directorate General on Internal Market and Services keeps implementing its agenda of making the Single Market even more united. Initially introduced in 2007, the so-called “Digital Single Market” (a part of a broader program of “Digital Agenda for Europe”) covers numerous communication issues that EU citizens have to deal with, including internet, e-trade and e-invoicing, online content security and intellectual rights protection, and even “enhancing digital literacy and skills” [1].

A good news for mobile service customers is the Commission’s decision to lower the already set in 2007 and reconsidered in 2009 price ceilings on roaming services. Thus, starting  in July 2010, EU-travelers will pay a maximum of 39 cents for an outgoing call and 15 cents for an incoming one. The tariffs are due to be lowered even more in 2011 [2]. Sending a message has cost mobile phone users 11 cents since 2009, and this amount is going to stay fixed.

As traveling within the “free movement zone” has increased, so have the amounts on the bills the customers who downloaded data abroad receive. Thus, in 2009, a German traveler who used his mobile roaming to download a movie in France faced a bill of 46,000€ [3]. The Commission’s solution to the problem was setting a €50 limit on data-roaming for travelers inside the EU. Starting from July 1^st, 2010, the companies will have to send customers a warning upon their reaching a 80% of their data-roaming limit.

While consumers are certainly satisfied with such a policy turn, mobile service providers are not the ones who are going to enjoy new financial gains once the directive comes into force. However, the eventual goal of the Commission is to make the market favorable to both consumers and providers, and it is expected [4] that lower prices will induce travelers to use roaming more freely.

Whether the experiment proves to be successful will become evident after a considerable amount of time. The Commission’s goal is to achieve “a zero difference between roaming and national tariffs …by 2015” [5].

1. http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52010DC0245(01):EN:NOT
2. http://ec.europa.eu/information_society/activities/roaming/regulation/archives/current_rules/index_en.htm
3. http://news.techworld.com/mobile-wireless/3213972/eu-sets-limits-on-mobile-data-roaming-costs/
4. http://business-review.ro/links/eu-sets-lower-roaming-tariffs-and-encourages-more-competition/8156/
5. http://ec.europa.eu/information_society/newsroom/cf/fiche-dae.cfm?action_id=259&pillar_id=43&action=Action%20101%3A%20Roaming

Alisa Nikitina

There’s nothing obviously new in the plans but it does give a sense that we haven’t got as far as the Lisbon Treaty or the Bangermann report had planned and the resultant frustration in Brussels is driving requirements now.

However I find the actual statistics somewhat dubious. According to them the UK has 100% access to DSL broadband and are top in Europe. Although measures are being taken to improve this, I’m not aware that we actually have 100%! In fact it then goes on to state that coverage is 99.6% in rural areas, which I still suspect is an exaggeration…

It also states that 100% of “basic government services” are available online. These must be more of the Cap-Gemini or Accenture statistics that I, and others, find so frustrating! In fact the rest of the figures leave me in serious doubt as to what they actually mean.

I know we have to start somewhere with benchmarks, but a reality check would be helpful.

However, and in addition, I have reservations over any further development of the EU Services Directive given the recent farce with ELMS by BIS or whatever the Whitehall department may be called in future. This is another of those initiatives that would have been wonderful in the year 2003 but is now imposed upon existing technical solutions at great cost and effort. I suspect Whitehall have no idea of the grief they caused!

 [click on this link to contribute]

The objective of this consultation is to gather information from stakeholders on the revised Broadband Guidelines, which lay down how the Commission will apply the EU state aid rules in relation to public support granted for broadband network infrastructure deployment.
To the extent possible, please in particular mention individual paragraphs in our draft if you wish to make specific comments. We would appreciate obtaining documents in an electronic format that will enable the reader to copy & paste text.