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Speech at the ECTA Annual conference in Brussels the 29th of November 2011

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Speech by Gunnar Hökmark, MEP and vice chairman of the EPP-group in European Parliament, rapporteur on the First Spectrum program, at the ECTA Annual conference in Brussels the 29th of November 2011.

Ladies and gentlemen,

The simplest meteorological forecast is to say that tomorrow’s weather will be the same as todays. That has a probability of 65% I have been told, compared to a real forecast which contrary to what we might say in front of the TV is not always wrong, but has a probability of 75 %.

That’s a small difference, one might say, but the difference is still remarkable when the change is coming. And as we all know, that change is coming and it doesn’t help to say that things will be the same tomorrow as today.

Because they will not. They will not be the same. They will be different and I am not talking about the weather but of the future of information technologies.

The problem is that our understanding of ICT is based on our experiences and knowledge developed during the last 20 years. Everything we know is one way or the other based on the past. On the discussions we have had, on the surprises we have seen and on the developments that have formed us. Philosophical but nonetheless extremely relevant for all our discussions, debates and decisions today.

To be honest, we know and understand how it was, not very much about how it is, the change going on right now, and even less how it will be. Still, that is what we are to make policies for and legislate about.

The only thing we know is that it is changing and that the changes of information technologies have a profound and deep impact in our societies. In all sectors and in all aspects.

Productivity, control of information and knowledge, the role of hierarchy’s media, distribution, efficiency, citizens opportunities, science, research, trade, commerce, financing and banking, politics, revolutions, demonstrations and democracy. Being leader is essential.

As we have seen. 20 years ago Internet as we know it today didn’t exist. The web and modern web pages emerged around 1995 and 1996. It is an extremely new phenomenon if we take into account how central and crucial it has become for most part of our societies and economies.

And we know that it has developed the preconditions for information, knowledge, trade, competitiveness and revolutions. Amongst other things. It has increased productivity and created new markets, new services and new demands that forever has changed the logics of the modern world.

But we are not in the end of this development. We are in the beginning of it. In some years time we will talk about our smartphones as we today talk about black- and white TV.

This change can be illustrated in many ways

– I think there is a world market for maybe five computers.” — Thomas Watson, chairman of IBM, 1943.

Today the forecast is 50 billion devices connected to the Internet in 2020.

– Bill Gates said 1981 `640 Kilobyte of memory is all anybody with a computer would ever need”

Japan has successfully tested a fiber optic cable that pushes 14 trillion bits per second down a single strand of fiber. That is 2.660 CDs or 210 million phone calls every second.

We must secure that legislation and policies are taking benefit of all the opportunities and open for the unforeseen, not regulating the past. If Europe is to be a globally leading economy and a strong political leader this area is crucial for future achievements.

Let me repeat to you what you already know but what I think we still are not ready to take in and understand the impact of the change that literally is going on just now.

• People on Facebook. More than 800 million active users. Maybe it will be out of fashion in two years time, leaving room for still much more powerful ways of communication.

• In 2006 there were 2.7 billion searches on Google every month. Two years 2008 later the figure was 31 billion. And today I don´t know, tomorrow there will be new companies competing.

• The number of Internet devices in 1984 was 1.000. In 2020 it will be 50 billions.

• For radio it took 38 years to reach a market audience of 50 million people. TV 13 years. Internet 4 years. Ipod 3 years. Facebook 2 years.

• According to Cisco’s annual Visual Networking Index Global Mobile Traffic Data Forecast (September 2011), global mobile data traffic will increase 26 percent annually by 2015. The report estimates that two-thirds of that global traffic will be driven by consumers watching video on their smartphones and tablets. Cisco predicts that by 2015 there will be 7.1 billion phones, tablets and other mobile devices capable of connecting to the Internet.

And other parts of the world is adapting to this change, as we discuss here today.

• The US Broadband Plan on spectrum calls for 500 MHz of additional spectrum for wireless broadband by 2020 including 300 MHz below 3.7 GHz by 2015. The US has also announced that it will refarm parts of the 700 MHz band

• Japan has adopted an initative called a “New Broadband Super Highway (Hikari-no-Michi)”. As part of their spectrum strategy and in view of increasing data traffic they will free up over 300MHz bandwidth by 2015 and over 1,500MHz bandwidth by 2020.

• In China the world’s biggest telecom operator has 700 million customers making a failure launching a new service to only 5 % of its customers a success of 35 milllion.

• Australia’s regulator, the Australian Communications and Media Authority (ACMA), has that it will auction out spectrum in both the 700 MHz and 2.5 GHz bands

• A recent study has concluded that assigning the Digital Dividend spectrum in the band 700MHz to deploy mobile broadband services would contribute up to US$ 15 billion to the economy of Latin America.

I want Europe to be in the lead of this development. Not just because it is important as such. That is important enough. The reason and our challenge are bigger than so. European Union is the world’s biggest economy but not the biggest market. We are not the most competitive region in the world but we should be. We can make Europe world leaders by transforming the worlds biggest economy into the biggest and most dynamic market, with world leading products, services, capabilities, networks, digital market turning our economy into one single market covering all services.

The first radio spectrum program is a great step forward in this respect.

We have set world leading targets that will pave the way for a development that will allow the EU to take the global lead on broadband speeds, mobility, coverage and capacity

– Member States will have to make the 800 MHz frequency band available for use of wireless broadband services by 1 January 2013.

– At least 1200 MHz of spectrum should be identified for wireless data traffic by 2015, enabling the EU to be the world leader of the future development regarding Internet and broadband. In addition, the Commission should assess, no later than 1 January 2015, if there is a need to harmonize additional spectrum bands to manage the exponential growth in wireless data traffic;

– The EP succeed in imposing an inventory with a very large scope of the existing use of spectrum from 400 MHz to 6 GHz to create a flexible and coordinated European spectrum policy where inefficient use of spectrum is addressed and where the exponential growth of wireless data traffic can be met by future re-allocations.

This is good, but we need to do more

We must create one single European telecommunications market. European consumers and business suffers greatly from fragmentation of markets. If Europe is to take the global lead in this dynamic and economic growth generating industry, we must create one market instead of 27 different.

We must abolish roaming by changing the logic of 27 different markets in to one European market

What does this mean for our future management and use of spectrum?

First of all Europe’s future spectrum regime must be flexible and managed by incentive mechanisms. The aim must be to free up more spectrum for modern technologies. By doing this we will also free Europe of the need for international roaming.

As new ways of using spectrum emerge, such as mobile broadband, spectrum must be shifted from historic uses to modern use. So called incentive auctions, currently debated in the US, could be a useful model in order to incentivise current licence holders to sell their spectrum to other players. We should facilitate that such auctions can be made on European level by making licenses more valuable and giving member states as the holders of them more money.

Secondly, Copyright law should be reframed in a way that allows access to content on all wireless broadband applications across Europe. Unless we solve the copyright issue we will never see the mergence of one single European telecom market

In this context it is important that the cooperation between broadcasters and mobile operators is improved. Asking how much spectrum will be needed for broadcasting technologies is different from asking how much spectrum will be needed for TV services.

Thirdly, Europe needs a big bang auctioning of 4 g wireless services where a limited amount of operators can serve the whole EU territory. Sufficient amount of spectrum should be made available to ensure the provision of pan European services. Manufacturers can develop devices on a 500 million consumer market. More importantly, roaming can forever be put behind us

Finally, Europe must not bet its mobile future on a strategy of demand reduction. Such as strategy would hold back development, new services and new opportunities. We must also leave the national state paradigm behind us and recognise that spectrum does not know any borders.

It is as easy as this. This will help us to create new investments, new entrepreneurships, reshape the European economy, make Europe to the centre for the global development in this area and giving us leadership in the knowledge economy, research and science as well as taking us out of the crisis as winners.