EXPLANATORY STATEMENT

The one thing we can truly know for certain about the future development of broadband and Internet is that we do not know how it will develop the next ten coming years, just that it will develop at least as much as it has in the past decade. Ten years ago no one could have foreseen the radical development of Internet and Broadband that we have witnessed, just as no one could have understood the magnitude of the development that has transformed economies and global markets and turned traditional hierarchies up side down in a world where the individual is in the centre, be it regarding knowledge, information, media or science, as well as communication, trade and markets. The world today is a different one than that of yesterday.

Media and information is acting in a world where no real boundaries exist, where knowledge and opinions cannot be stopped or controlled. Knowledge, facts, products and services are available regardless of distance, making the physical dimension less important and the connections even more so. The new information and communication technologies have created services, products and markets of their own but have also fundamentally transformed traditional markets into global arenas allowing different services to converge. The societies that have been in the lead of this development have increased productivity dramatically at the same time as their citizens have been able to express opinions, demands and influence in a way that cannot make them inferior to anyone in this new era of knowledge and information.

To be in the lead of this development will be crucial for Europe becoming the most competitive knowledge economy in the world, making use of the skills, demands, intellects, knowledge, experience, creativity, fantasy and visions of every individual citizen.

Europe can only become leading and stay that way if it allows for creativity, competition and new ideas in these areas. And it is obvious that the development and deployment of broadband is significantly slower where there is less competition, where incumbents decide on the pace and development of services (see figures in Annex). A European policy for Broadband must support and enhance the opportunities of competition and innovations, making it absolutely normal for Europe’s citizens to be connected and having the opportunity to choose between services and products.

The task of the Union is not to finance the deployment of Broadband. That is the task of the market being the speed of market driven development already high nowadays (see figures in Annex). The policies of the Union and the funding must not distort the market, nor protect or support incumbents or specific technologies. Rather the opposite is true, as the Union must provide for a creative and innovative environment that is the cornerstone for the development of technology which will develop in the future in ways and by means we cannot foresee at this point, simply pave the ground for.

While acknowledging the need for public intervention to accelerate coverage of under-served areas, it should respect better regulation principles and competition law. Public intervention may complement private investment but should never pre-empt private sector initiatives thereby distorting competition. The guidelines on criteria and modalities of use of structural funds for electronic communications published by the Commission in 2003 illustrate how to strike a balance between public support, regional development and competition requirements.

European Union policies must support a more rapid pace of innovation in this area, making Europe the most dynamic part of the world. Funding from the European Union must be based on the requirements of a level playing field, open for new entrants and all competitors as the most efficient way to achieve success. It must not aim to do what the market can do but contribute to the investments that otherwise could not be done and to the innovations that will keep Europe in the lead.

It is of a common European interest to have everyone connected to Broadband. The value that the net has for each of its users depends on the amount of other people connected. That gives way for the amount of service, knowledge and alternatives that can be provided for. When everyone in the EU has the opportunity to have access to Broadband, the internal market will be characterized by immediate communications, cross border integration as well as opportunities for everyone, regardless of wherever he or she might live.

The internal market in combination with Broadband accessible for all its citizens provides a base of 500 million people accessing and making use of services such as e-learning, e-health, e-governance and e-trade. It is the convergence and distribution of services and knowledge that can make the goal of making Europe a leading knowledge economy in the world a reality. That is an opportunity that must not be distorted by funding and policies that rather tend to support over-aged structures instead of innovations, advancement and development.

DRAFT REPORT
on Building a European Policy on Broadband

Committee on Industry, Research and Energy
Rapporteur: Gunnar Hökmark

The European Parliament,

– having regard to the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions entitled ‘Bridging the Broadband Gap’ (COM(2006)0129),

– having regard to the Digital Divide Forum Report of 15 July 2005 on broadband access and public support in under-served areas,

– having regard to the Communication from the Commission to the Spring European Council ‘Implementing the Renewed Lisbon Strategy for Growth and Jobs’ (COM(2006)0816) and its accompanying Annex,

– having regard to the Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions entitled ’Connecting Europe at high speed: recent developments in the sector of electronic communications’ (COM(2004)0061),

– having regard to the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions on the Review of the EU regulatory framework for electronic communications networks and services (COM(2006)0334),

– having regard to Directive 2002/21/EC of the European Parliament and of the Council of 7 March 2002 on a common regulatory framework for electronic communications networks and services (Framework Directive) ,

– having regard to the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions entitled ‘i2010 – A European Information Society for growth and employment’ (COM(2005)0229),

– having regard to the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions entitled ‘i2010 – First Annual Report on the European Information Society’ (COM(2006)0215),

– having regard to Decision No 854/2005/EC of the European Parliament and of the Council of 11 May 2005 establishing a multi annual Community Programme on promoting safer use of the Internet and new online technologies,

– having regard to the Commission Staff Working Paper entitled ‘Guidelines on Criteria and Modalities of Implementation of Structural Funds in Support of Electronics Communications’ (SEC(2003)0895),

– having regard to the Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions entitled ‘A market-based approach to spectrum management in the European Union’ (COM(2005)0400),

– having regard to the judgment of the Court of First Instance of 30 January 2007 in Case T-340/03 France Télécom v Commission dismissing in its entirety the appeal by France Télécom SA in respect of the Commission’s 2003 decision concerning predatory pricing in ADSL based Internet access services for the general public,

– having regard to the Communication from the Commission to the Council and the European Parliament entitled ‘A forward-looking radio spectrum policy for the European Union: Second annual report’ (COM(2005)0411),

– having regard to its resolutions of 14 March 2006 on a European Information Society for growth and employment , of 1 December 2005 on European electronic communications regulation and markets 2004 , and of 23 June 2005 on the information society ,

– having regard to Rule 45 of its Rules of Procedure,

– having regard to the report of the Committee on Industry, Research and Energy and the opinions of the Committee on Employment and Social Affairs, the Committee on the Internal Market and Consumer Protection, the Committee on Culture and Education and the Committee on Legal Affairs (A6 0000/2007),

A. whereas the development of Internet and broadband have transformed the global economy, integrated regions and countries with each other, created a dynamic paradigm where individual citizens wherever they live have opportunities never seen before regarding information, communication, influence, participation, consumption, professional life and enterprising,

B. whereas the value of Internet and broadband increases exponentially with every new user, something which is essential if Europe is to become a leading knowledge-based society,

C. whereas in its judgment in Case T-340/03 dismissing the appeal by France Télécom SA against the Commission’s 2003 decision concerning predatory pricing in ADSL based Internet access services, the Court of First Instance held that the fast-growing nature of the broadband sector did not preclude the application of competition rules,

D. whereas the number of broadband lines has almost doubled and the number of broadband subscribers has almost quadrupled in the past three years; whereas these developments have been market driven and are enhanced by competition, thereby proving the importance of not distorting the market,

E. whereas Member States experiencing higher competition in the broadband market show a higher degree of broadband coverage,

1. Stresses the opportunities that an internal market with nearly 500 million people connected to broadband would bring about, creating a globally unique critical mass of users exposing all regions to new opportunities and giving each user increased value and Europe the capacity to be a world leading knowledge-based economy;

2. States that a core set of European e-services can serve to further integration and strengthen cohesion as well as create a single European electronic market via the use of broadband, and calls for this area to be made a special priority for the use of structural and rural funds;

3. Calls for every school and educational centre in the Union to be connected to broadband, with a view to a future where “no European child left is off line”;

4. Takes the view that the key to closing the broadband gap is innovative technology and points to the fact that new technology has allowed disadvantaged regions to leapfrog many phases of development;

5. Emphasises that new technology is by nature more far-reaching and inclusive, thereby making more advanced services possible;

6. Asserts that the rapid deployment of broadband is crucial for the development of European productivity and for the emergence of new and small enterprises that can be leaders in different sectors, for example health care, manufacturing and financial services;

7. Emphasises that the role of the EU is to create a supportive environment for the development of innovation and for the introduction of new technologies by providing a regulatory framework that invites competition and by the use of relevant funds to support the necessary infrastructure,

8. Encourages the Commission to closely examine whether the regulatory framework is fully implemented and whether the rules on state aid are applied whenever structural and rural funds are to be used for broadband investments and to ensure that EU funding will not support market incumbents or monopolies;

9. Emphasises that national and EU public funding should be competitively neutral and contribute to commercially sustainable investments; stresses that such contracts should be awarded by competitive tendering rather than automatically awarded to an incumbent on the market;

10. Stresses that infrastructure should be provided on an equal access basis, with an ownership structure that favours no particular service providers;

11. Highlights the key role played by the market in the expansion and development of innovative services; stresses however that it is imperative that regulators and governments simultaneously give priority to promoting competition, applying remedies to address abuses of dominant positions and reducing barriers to entry, so that the market is able to deliver innovation;

12. Emphasises the need for technological neutrality combined with the avoidance of fragmentation, something which will challenge European regulators to open up new solutions and yet create stable preconditions at the same time;

13. Points out that developing the competitive advantages of rural areas depends on innovative new uses of information and communication technologies;

14. Calls on the EU and Member States to deliver on the 2003 Barcelona European Council objective of ensuring that European citizens are offered relevant public broadband services;

15. Emphasises that digital literacy is an indispensable basis for the exploitation of the opportunities broadband offers and points to the responsibility in this regard of public education;
16. Stresses the importance of open, interoperable standards at a technical, legal and semantic level so as to enable economies of scale, ensure non-discriminatory open access to the information society and promote the fast deployment of technologies;

17. Believes that the promotion by public authorities in cooperation with business of broadband-enhanced applications and services can contribute to the efficient delivery of government services and, at the same time, provide incentives for the procurement of broadband access, which will help to stimulate supply;

18. Considers that new technology offers interesting and cheaper solutions for rural areas, as wireless links, mobile and satellite communications may deliver broadband to areas traditionally excluded by fixed-line networks; notes that these new high speed applications are driving demand for radio spectrum;

19. Urges the Commission to actively seek substantial synergies between its own sectoral programmes, e.g. the Seventh Framework Programme for research and development and the Competitiveness and Innovation programme, including also better coordination with international programmes and the funding provided through the structural and rural development funds for the development of broadband;

20. Takes the view that, in addition to market forces, Member States and in particular their regions and municipalities, could set incentives to stimulate the broadband market in disadvantaged regions; emphasises the role that structural and rural development funds should play in supporting regions strengthening the demand side of the information society;

21. Urges the Commission to provide adequate information and statistics and to assess the impact of structural and rural funding on broadband deployment in assisted regions;

22. Insists, furthermore, that public support to broadband infrastructure must adhere to the principle of ‘technology neutrality’, neither favouring a priori any particular technology, nor limiting the technology choice of the regions, while preventing at the same time fragmentation of the technical infrastructure;

23. Considers that public intervention in the forms of loans and grants, often implemented through public-private partnerships, could be further developed in under-served areas;

24. Instructs its President to forward this resolution to the Council and the Commission.


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