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Report on broadband before vote in plenary

on Building a European Policy in Broadband

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 entitled ‘Implementing the Renewed Lisbon Strategy for Growth and Jobs’ (COM(2006)0816),

– 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 multiannual 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 France Télécom SA 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 the Internal Market and Consumer Protection, the Committee on Regional Development 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 entrepreneurship,

B. whereas broadband will serve to strengthen integration and cohesion within the EU,

C. whereas the value of the Internet and broadband increases exponentially with every new user, something which is essential if Europe is to become a leading knowledge-based society; whereas spectrum reallocation offers the possibility of bringing poorly-covered areas into the digital society,

D. whereas the 500 million citizens that play a part in the EU’s internal market represent a globally unique critical mass, which is required for the development of new innovative services, the corollary of which is an increase in opportunities all over the Union; whereas this highlights the common European benefit to be derived from everyone having access to broadband,

E. whereas there is no apparent correlation between broadband penetration and population density,

F. whereas in its abovementioned judgment in France Télécom SA v Commission the Court of First Instance held that the fast-growing nature of the broadband sector did not preclude the application of competition rules,

G. 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,

H. whereas Member States experiencing higher competition in the broadband market as well as competition between different technologies show a higher degree of broadband coverage and penetration,

I. whereas online services such as e-government, e-health, e-learning and e-procurement can only become truly inclusive and strengthen cohesion if they are made widely available to EU citizens and to the business community by means of broadband connections,

J. whereas broadband Internet connections may contribute to a more sophisticated, inclusive health-care system using distance-diagnosis and distance healing in less developed regions,

K. whereas broadband Internet connections may contribute to a more sophisticated, inclusive education system providing distance-learning applications in regions without satisfactory school infrastructure,

L. whereas the lowest-speed broadband connections are no longer sufficient for functional use of the more demanding Internet services and video content,

M. whereas the rapid development of Internet services and content is creating a need for high-speed broadband connections,

N. whereas the extent of broadband deployment has not been the same in all Member States and regions of the EU; whereas the availability thereof in inaccessible (island, mountain, etc.) and rural areas remains limited because of the high cost of broadband networks and services; whereas the low level of demand outside EU metropolitan centres means lower investment and could discourage broadband service providers, given the lack of business opportunity,

O. whereas a substantial disparity remains in terms of broadband deployment between urban centres and remote areas, and between the old and new Member States; whereas this highlights the need for technological development, for new operators to be given better opportunities to enter the market and for clear strategies on how to increase the speed of innovation, thus making it easier for rural areas and countries lagging behind to catch up,

P. whereas in order to improve access for socially disadvantaged groups, training and support measures should be provided such as will ensure equal opportunities,

Q. whereas functional-capacity broadband access is important for all Community users irrespective of where they are physically located in geographic terms,

R. whereas the correct and timely implementation of the current framework is an essential precondition of an open, competitive and innovative market for electronic communication services; whereas the procedures for transposing and implementing the framework vary greatly among the Member States, fragmenting the single European communications market,

S. whereas every school should be connected via broadband, with a view to a future in which no European child is left off line,

T. whereas, through the digital switchover and the transition from analogue to digital, several hundred megahertz of spectrum will be released, thus opening up the possibility of reallocating spectrum and opening up a spectrum commons,

The potential of broadband
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. Agrees that the deployment of broadband networks offering reliable transmission at competitive bandwidth is crucial for business growth, societal development and the enhancement of public services;
3. Emphasises that the magnitude of broadband development cannot be foreseen or planned, but can be stimulated and supported by a creative and open environment;

4. Emphasises that a broader deployment of broadband would revitalise the internal market in general, exposing all regions to new opportunities whilst providing each user with a valuable service and providing Europe with the capacity to become a world leading knowledge-based economy;

Connecting Europe
5. Stresses that broadband deployment in rural areas is a key factor in the participation of all in the knowledge society; points out, in addition, that broadband services are equally decisive for the economic development of the regions in question and should therefore be deployed as widely as possible;

6. Calls on the Member States to promote broadband connections in every school, university and educational centre in the EU and the introduction of distance learning, , with a view to a future where no European child and no individual involved in educational programmes is left off line in Europe;

7. Notes that in bridging the digital divide, a basic structure, such as the availability of computers in households and in public institutions, must be promoted;

8. Encourages the Member States to produce broadband infrastructure mapping in order to more accurately indicate the coverage of broadband service;
The key role of innovation

9. Takes the view that the key to closing the broadband gap is innovative technology, i.e. technology which makes it possible to construct high-capacity broadband connections, and points to the fact that new technology has allowed disadvantaged regions to leapfrog many phases of development;

10. Points out that developing the competitive advantages and solving the serious problems of rural, sparsely-populated and inaccessible (island, mountain and other) areas depends on innovative new uses of information and communication technologies (ICTs);

11. Emphasises that new technology is by nature more far-reaching and inclusive, thereby making more advanced services possible; stresses also that broadband services will help regions, in particular the least-developed regions, to attract businesses, facilitate distance working, offer new medical diagnostic and care services, and achieve improved educational standards and public services;

12. Considers that new technology offers interesting and cheaper solutions for remote, inaccessible (island, mountain, etc.) and rural areas, as wireless links, mobile and satellite communications may deliver broadband to areas traditionally excluded by fixed-line networks; notes that these new technologies must be taken into account when radio spectrum is allocated;

13. Stresses that the development of innovative technologies is to be encouraged at all levels, and that a serious effort is needed to promote access to the market and to maintain fair competition therein;

14. Considers it important to mobilise ICT research and ICT partnerships between universities, local authorities and business;

15. Encourages the Commission to consider broadband and especially mobile broadband solutions as important within the working programmes of the Competitiveness and Innovation Framework Programme (CIP) and the Seventh Framework Programme for research, technology development and demonstration activities (FP7);

16. Urges the Commission to actively seek substantial synergies between its own sectoral programmes, e.g. FP7 and the CIP, including also better coordination with international programmes and the funding provided through the structural and rural development funds for the development of broadband;

17. Stresses that broadband connection, given the spectacularly rapid development of the new media, offers the only technically reliable access to media products such as Internet TV and Internet telephony, and will thus prevent people in rural areas from being cut of from society in the cities where broadband is available;

18. Recognises that some people have access only to low speed and low capacity broadband; believes that these connections should not be a proxy or substitute for newer high speed connections; insists that no geographic area or socioeconomic group should be denied investment in new, faster technology simply because they already have access to a lower quality connection;

19. Notes that new wireless platforms are well suited to ensuring broadband access in rural areas; underlines the importance of technology-neutrality in spectrum allocation; recalls that the Commission has envisaged a more active spectrum policy, and that this has also been supported by Parliament in its resolution of 14 February 2007 ‘Towards a European policy on the radio spectrum’ ;

20. Calls on the Community institutions and Member States to cooperate more closely in the management of radio spectrum with a view to facilitating the use of spectrum by a wide range of wireless and mobile technologies (terrestrial and satellite);

21. Urges the Member States to allocate sufficient spectrum to broadband technologies;

The impact of content

22. 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; emphasises also the need to improve access to ICTs for as many European citizens as possible and to improve their ICT skills;

23. Calls for consumer-oriented measures in the field of further education and the mobilisation of technical resources in the information technology sector; advocates financial and tax incentives for such measures;

24. Takes the view that investment in e-health, e-government and e-learning applications can play an important role in driving consumer demand for broadband, and thus create the critical mass necessary for large markets to emerge in these areas;

25. 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;

26. Highlights the scope for public authorities to exploit pre-commercial procurement to stimulate innovative service delivery across broadband networks; notes that they can also co-ordinate demand across communities and service providers to ensure the critical mass needed to underpin new network investments; encourages the Commission to promote awareness and use of these tools;

27. Calls on the Commission and Member States to give preference to broadband Internet solutions and technologies in the computerisation of government departments, the education sector and small and medium-size enterprises (e.g. application service providers, terminal servers);

28. 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; furthermore, emphasises the role that such development funds play in supporting regions in this regard;

29. 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;

30. Believes that it is extremely important for people to be ensured the widest possible access to high-quality content and services wherever they are using the technology of their choice and emphasises the need for access networks and for networks open to different operators;

31. Calls on the Community institutions and the Member States to promote the availability of content on line, notably by addressing its appropriate protection in a digital environment;

The dynamics of the market

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

33. Takes the view that private investment is essential for wider broadband deployment and universal coverage; stresses that private investors should be given the opportunity of refinancing their investments if the competitive dynamic is to be further stimulated and if better services and more innovation and choice are to be delivered to consumers;

34. Stresses the importance of industry-driven, 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;

35. Urges the Community institutions and Member States to work with industry and address problems (such as micro-payments, security and trust, interoperability and Digital Rights Management) that hamper the development of new business models in the field of broadband;
An encouraging and clear framework

36. 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 private investment and by the use of relevant funds to drive demand for broadband services and, where justified, to support the necessary infrastructure;

37. Notes that public authorities have an important role to play in stimulating broadband network roll-out, and that they should consider measures to encourage demand, and investment in fixed infrastructure; calls for a clear framework for infrastructure investment that should not distort markets nor be operated on unfair terms when compared to private enterprises; commends the Commission for having clarified the State aid rules as regards participation by public authorities in broadband development programmes;

38. Emphasises that the main role of Member States regarding broadband promotion is the creation of an environment in which there is legal certainty, which encourages competition and which stimulates investment and that, in order to achieve this, the EU regulatory framework for electronic communications must be effectively implemented ; reiterates the importance of ensuring competitive market conditions and the need for all Member States to transpose and implement the regulatory framework for electronic communications, and to ensure that they have effective, independent and properly resourced regulators;

Competition rules and consumer protection
39. Highlights the key role played by the market in the expansion and development of innovative services; stresses, however, that it is imperative that national regulators, competition authorities and national and local governments simultaneously give priority to promoting more vigorous competition and investment in broadband markets as well as to applying remedies to address abuses of dominant positions and cartels, and finally to reducing barriers to entry, so that the market is able to deliver innovation;

40. Notes the growing competition in the European broadband market; recalls that the sectoral regulation of the ICT industry was planned from the outset as a transitional solution for the opening of the markets, and that it must in the medium term come to be governed by the general rules of competition alone;

41. Emphasises that the forthcoming review of the regulatory framework must be aimed at ensuring open access and fair competition for all operators;

42. Takes the view that, with a view to achieving more rapid broadband deployment in rural areas, no restrictions should be imposed on the joint use of networks on a voluntary basis by infrastructure managers; stresses that such agreements between infrastructure managers are an effective means of achieving wider broadband deployment in regions lacking the necessary broadband transmission of infrastructures and where future demand would not sustain several networks;

43. Emphasises the need to construct broadband infrastructure at local community level in accordance with the public-private partnership principle and taking account of equal access;

44. Stresses that competition and effective and appropriate rules for opening up the broadband market provide the greatest stimulus for broadband deployment, meaning roll-out, speed and a variety of services;

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

46. Emphasises that the functional unbundling of access networks of market incumbents from their operating activities may have positive advantages and could ensure the equal and fair treatment of all operators;

47. Calls on the Commission, in its forthcoming green paper on universal service, to examine the availability of Internet services at reasonable and affordable rates throughout the EU to all citizens, including those on a low income, rural and high-cost areas, and whether there is a need to modify the existing universal service requirements; also expects the green paper to address consumer concerns regarding secure and safe broadband use;

Public funding where needed
48. Stresses that public funding should only be used where the roll-out of broadband infrastructure is not economically viable for private undertakings and should not serve to duplicate existing infrastructure capable of providing broadband services;

49. Emphasises that national and Community public funding should be competitively neutral and contribute to commercially sustainable investments; stresses that public procurement contracts should be awarded by open,

transparent, competitive and non-discriminatory tendering;
50. Stresses that publicly funded infrastructure should be provided on an equal access basis, and should not favour particular service providers;

51. 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;

52. States that publicly funded investments in broadband infrastructure must be possible within the framework of EU competition rules;

53. Urges the Commission to ensure that equal access to broadband networks financed with support from the structural and rural funds is given to all service providers; believes furthermore that in order to ensure compliance with the requirements, national regulatory authorities should be granted the power to impose openness requirements in regulations and be given a mandate to enforce those requirements;

54. Emphasises the importance of combining regional development with a European broadband policy, including the use of regional and rural funds, for the development of mobile broadband solutions or the setting up of necessary infrastructure;

55. Calls on the Commission to further develop and review guidelines on how to use structural and rural funds to promote broadband deployment and uptake and, in particular, to provide more precise guidance regarding the utilisation of structural funds for the deployment of broadband services where a partial supply of such services already exists;

56. Calls on the Commission to provide guidance and disseminate good practice on the observance of State aid rules regarding public financial support given to broadband projects;

57. Calls on the Commission to allow EU funds also to be used for upgrading or replacing broadband networks which do not provide connections with suitable functional capacity;

58. 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 and promote the exchange of best practices between the regions of the EU;

59. 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 is used to improve the penetration rate of ICTs throughout the EU, without favouring specific players or technological options, but only the most efficient solutions; notes further that such use of EU funds should be permitted only in under-served areas and where it is clear that there are no other sources of investment in broadband infrastructure; stresses that all decisions should be transparent and published on national and European websites linked to the competition authorities;

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

61. Insists, furthermore, that public support to broadband infrastructure must adhere to the principle of ‘technology neutrality’, not favouring a priori any particular technology, nor limiting the technological choices of the regions while at the same time preventing fragmentation of the technical infrastructure, taking into account development trends and the future needs of users and promoting the construction of higher-capacity broadband connections;

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

The one thing we truly know for certain about the future development of broadband and Internet is that we do not know how it will develop over the next ten years, only 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 has been witnessed, just as no one could have understood the magnitude of the development that has transformed economies and global markets and turned traditional hierarchies upside down in a world where the individual is at the centre, in knowledge, information, media and science, as well as in communication, trade and markets. The world today is a different one from yesterday.

Media and information circulate 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 connections ever more so. New information and communication technologies have created services, products and markets of their own but have also fundamentally transformed traditional markets into global arenas in which different services converge. Countries that have led this development have increased productivity dramatically and at the same time, their citizens have been able to express opinions and demands and exert influence in a way that gives them a global advance to anyone in this new era of knowledge and information.

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

Europe can only lead and stay in the lead 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.

The figures and tables provided in the annex provide useful hints as to what factors really matter in the deployment of broadband. OECD statistics show that broadband penetration does not directly correlate either with population density or with economic development. This supports the idea that distance and income are not the only determining factors for broadband penetration and that competition and innovation play a major role. This strong link between competition and penetration can also be observed in the Commission’s graph depicting infrastructure competition and penetration rate. The greater the offer of alternative access modes (cable, unbundled local loop, fibre) the higher the penetration rate. (DK and FI are exceptions to this pattern.) This trend is also apparent from ECTA’s (the new telecom entrants association) regulatory scorecard: countries that show a better record in implementing the broadband regulatory framework show in general higher penetration rates.

European policy for Broadband must therefore support and enhance the opportunities for competition and innovation, making it the absolute norm for Europe’s citizens to be connected and have the opportunity of choosing between services and products.

The task of the Union is not to finance the deployment of broadband. That is the task of the market. And the speed of market-driven development is already high nowadays (see figures in Annex). Union policies and funding must not distort the market, nor protect or favour incumbents or specific technologies. The opposite is true. 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, but must pave the way for.

While acknowledging the need for public intervention to increase coverage in 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 and thereby distort 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 market in the world. Funding from the European Union must be based on the requirements of a level playing field, open to 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 investment that otherwise would not be made 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 number of other people connected. This determines 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 and cross-border integration, as well as opportunities for everyone, regardless of where he or she might live.

The internal market, in combination with broadband access for all 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 turn the goal of making Europe a leading knowledge-based economy in the world into a reality. That is an opportunity that must not be distorted by funding and policies that tend to support over-aged structures instead of innovation, advancement and development.