Brussels, 21 March 2006
[Figures and graphics available in PDF and WORD PROCESSED ]
The Commission considers wide broadband coverage in Europe as crucial for fostering growth and jobs in Europe. This is why EU telecoms legislation, structural and rural policy instruments need to be mobilised in full respect of state aid rules in a joint drive to bring high-speed “broadband” internet access to all Europeans, in particular to the EU’s less-developed areas. This is the conclusion of “Bridging the Broadband Gap”, a European Commission Communication presented today jointly by the European Commissioners for Information Society and Media, Competition, Regional Policy and Agriculture and Rural Development.
“Broadband internet connections are a prerequisite for e-business, growth and jobs throughout the economy. Competition and open markets are certainly the best drivers of broadband in the EU”, said Viviane Reding, Commissioner for Information Society and Media. “However, broadband connections must not be limited to the big cities. If the EU and its 25 Member States make a clever use of all policy instruments, broadband for all Europeans is certainly not out of reach by 2010. But the time to act is now.”
Competition Commissioner Neelie Kroes underlined the importance of EU state aid rules in this respect: “Deployment of broadband may be hampered by market failures in rural and remote areas. In such cases, well-targeted state aid may therefore be appropriate, e.g. in the form of public private partnerships to support the construction of open networks. But we have to make sure that state aid does not crowd out private initiative, nor distort competition to an extent contrary to the common interest.”
“Where there are genuine market failures, the EU Structural Funds play a vital role in stimulating investments in broadband infrastructure and services, boosting competitiveness and innovation and enabling all regions of Europe to participate fully in the knowledge economy", added Commissioner Danuta Hübner, Commissioner responsible for Regional Policy.
Mariann Fischer Boel, Commissioner for Agriculture and Rural Development, stressed: “Thanks to our new Rural Development policy, money is now being increasingly focused on creating new business opportunities in the countryside. There is a particularly strong concentration on broadband and information and communication technologies, where we already finance projects under our LEADER initiative – from the north of Scotland to the south of Spain. We now want to put them into the mainstream of our Rural Development programmes. The Rural Development fund is worth €70 billion between 2007-2013, with national funding on top. I urge Member States to tap the potential of broadband in their national Rural Development strategies.”
Rapid progress in broadband take-up across Europe in the past three years can largely be ascribed to a combination of competing infrastructures and effective telecoms regulation. The broadband penetration rate at the end of 2005 is estimated at 13% of population or about 25% of households, reaching almost 60 million lines throughout the EU. Despite fast growth, broadband has yet to reach some of the EU’s less-developed areas because of low and uncertain returns on investment. In 2005, broadband was available to about 60% of businesses and households in the remote and rural areas of the EU15, and to more than 90% in the urban areas, but the gap is greater in the new Member States. Broadband speeds are often lower in the countryside too, which makes it difficult to carry the large volumes of data needed for e-business, e-government, e-health and multimedia content applications. Rural broadband speeds average less than 512 kbps, whereas urban ones are rising and now often exceed 1 MBps, permitting the use of rich services.
EU telecoms rules are opening up regional and local markets to the most cost-efficient broadband suppliers. However, outside the metropolitan centres of the EU, weak demand, due to population scarcity and distance, means lower returns on investment and can discourage commercial suppliers. Public/private partnerships are therefore needed to roll out the broadband technology mix that best reflects local needs and makes its benefits affordable. The EU’s structural and rural development funds can help local authorities to build local services around broadband connections, while state aid policy ensures that public support from national funds does not distort competition. The Commission has already approved a number of broadband projects over the past year, finding in several cases that aid was compatible with state aid rules (UK, Spain, Austria, Ireland) or that there was no state aid involved (two decisions in France).
To accelerate the roll-out of advanced broadband communications in Europe, the Commission today proposes two main strands of action:
See also MEMO/06/132