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Neelie Kroes

Vice President of the European Commission

Commissioner for the Digital Agenda

Figures and graphics available in PDF and WORD PROCESSED
Radio spectrum – why Europe needs effective co-ordination

Spectrum Summit, European Parliament

Brussels, 23 March 2010

Ladies and gentlemen,

I would first of all like to thank you for participating in this important event. You have been willing to share your views and make constructive contributions on the very complex and challenging questions which we face in the spectrum field

We have heard a lot of clear statements and discussion about the importance of spectrum use. For society, for business, for cultural pluralism and for economic development.

That discussion will continue this morning. But I would like to add my views on what an effective co-ordination of spectrum policy can achieve, and what the Radio Spectrum Policy Programme can contribute to achieving this.

It is not easy to detect a clear consensus on the exact way forward on spectrum policy. But I have the impression that we all agree, firstly, that efficient spectrum management is a key element in tackling key social and economic challenges and, furthermore, that Europe has an important role to play in achieving that.

The challenges we face are huge and we cannot shy away from them – we have to adopt a clear and strong policy line to take full advantage of current and future technological developments, in order to make the best use of spectrum for the benefit of European citizens and business.

Let me share some further thoughts on my approach, including principles I want to apply from this point forward

Where we are

We are not talking about coffee money – our decisions will affect €250 billion of activity annually.

Spectrum is a scarce resource – but it is limited not only by physical capacity, but also by inefficient management of the needs of a rapidly changing set of markets for electronic communications services and other applications.

At the heart of these inefficiencies is fragmentation. Fragmentation is death when it comes to spectrum management. It kills innovation, it stops the development of cross-border services and a true Single Market, and it creates an entitlement mentality amongst those lucky enough to have or to obtain spectrum access.

So I remind you that 'no change' is not one of our options. Competition for spectrum and the benefits of competition for consumers are facts that cannot be wished away.

Of course, we are all aware that not all spectrum problems could be solved or need to be tackled at European level.

Europe has to intervene where it can bring real added value – be it to allow the proper functioning of the Single Market or to achieve other Treaty objectives both within the EU and in relations with third counties. It is equally important to stress that the intensity of European intervention should be proportionate to the issues at stake: it should vary in different situations, going from harmonisation measures in certain cases to simple coordination or technical support in others.

But it is clear that Europe has an important role to play in that field, as neither spectrum nor the services and devices that rely on it stop at national borders.

First principles

We should assume nothing beyond the need to maximise the social, economic and environmental value that spectrum can be used to generate. My first principle is that spectrum is a public good, not an entitlement or private play-thing. My second principle is that flexibility aids efficiency.

As you may have guessed, I am determined to inject economic and social sensibilities into this debate. Spectrum management is shaped by the laws of physics, but I will not allow technical and legal arguments to have more influence than they deserve.

As part of a core belief in the European level playing field, I am keen to avoid newer and better technologies being at a disadvantage simply because they came later. We have adopted technological and service neutrality as the relevant principle in our revised telecoms rules. This means that we have to end the practice of forcing new technologies to share tiny slices of spectrum. This is not sustainable, especially when other parts of the spectrum are being used inefficiently.

The digital dividend

At the same time, we should not throw out the baby with the bath water! There are valuable services which need particular attention. Terrestrial broadcasting is a good example. It has a special role in our democracy that cannot be overlooked and it would be nonsense to question that role.

We need however to reflect on the best way to deliver high quality and pluralist broadcasting to citizens given the increasing number of platforms. The terrestrial antenna on the roof used to be the only one. Now we have satellite, cable and IPTV on broadband networks and even on mobile devices. Young people start watching TV via a range of platforms including PCs. We cannot avoid debating how traditional high power broadcasting should co-exist with new platforms.

I am not looking to limit in any way the role of broadcasters or to reduce their capacity to transmit or to further develop their services. However, I am definitely concerned that the wrong incentives could delay investments by broadcasters.

Broadcasters have two advantages currently 1) relatively generous spectrum allocations and 2) an unprecedented increase - estimated to be between 400 to 700% - in what they can do with allocated spectrum thanks to the current digitalisation of TV. In my view this may encourage broadcasters to use spectrum without proper regard for its full social and economic cost, rather than to innovate, or rationalise, or make use of a mix of platforms. We might manage on that basis today, but that is not a solution for tomorrow.

The reallocation of a part of the digital dividend to wireless broadband should also be seen as an opportunity for broadcasters, as - in this context of media convergence - the development of wireless broadband may offer them additional chances to provide new services and to reach viewers via new platforms. And in any event it should not be forgotten that Commission studies dating back to 2004 and again in 2009 point to billions in consumer added value if we pursue such ideas.

Therefore, as already promised by the Commission, I am shortly going to propose that the Commission adopt a technical harmonisation measure on the 800 MHz band – one part of the digital dividend frequencies. This will set the technical conditions to apply in any Member State that, following the Commission's guidance, decides to move away from using this sub-band for broadcasting, and will ensure a harmonised approach to the introduction of wireless broadband there.

This will help solving the technical problems which may arise in that context. However, we cannot avoid a serious policy discussion to consider whether it would be appropriate to mandate at EU level the opening up of the 800 MHz band by a fixed future date, while foreseeing a sufficiently long transitory period and possible derogations in duly justified cases.

The need for flexibility

If we don't introduce more flexibility into the system we will not allow the development of markets for new electronic communications services, and it's clear that we cannot afford this.

Furthermore, it is only possible to deliver 100% broadband coverage through effective use of wireless networks (terrestrial and satellite) and they will require fair access to spectrum.

Whatever we settle on, it should be a regime that safeguards competition and encourages innovation. We do not want a regime that encourages monopolist or cartel behaviour, nor one that slows down innovation, or favours a particular technology.

Supporting competition and innovation

Having paid a large sum for access to spectrum does not imply an exemption from competition principles. That is a notion too easily adopted by an incumbent (in any market) or wannabe incumbent and it seems to have informed the massive bids for 3G spectrum at the start of the last decade.

I am not naïve – change may have an unsettling effect on some industries that are less prepared or less used to regular innovation. But, frankly, that is life.

I feel I have a duty to help you adjust to a changing world, but I can't and won't shield you from those wider forces. When the world changes you have to change with it. New business models, new technologies, new competition, you name it.

In the future we may therefore have to be tougher in setting criteria for allocating new spectrum – so to ensure effective competition and be certain of the value an allocation will generate.

It should also be clear that those who do hold spectrum rights – and those sectors or services for whom specific parts of the spectrum have been reserved – will have to use it fully and efficiently.

If the potential of a spectrum allocation is not being exploited to its maximum, if the application is not the most efficient way of delivering social, cultural or economic benefits, then it should go to another application or service instead.

We should not therefore be afraid, in duly justified case, to reallocate spectrum which is not fully or not efficiently used or which becomes available following technological developments. An efficient use of spectrum may also require that spectrum rights in many bands become tradeable across Europe.

Harmonisation and building European markets

If we policy makers do not encourage the provision of communications services on a cross-border basis, they may never take root.

Why should communications companies not be able to aggregate spectrum, not only in quantity but also geographically and under common conditions, in a way that best matches their business models? There is no reason why in certain cases spectrum should not be offered on a European basis, and our approach on Mobile Satellite Services provides a good example in that respect. Making spectrum available at the right level could make it more attractive; could result in better services for users; and could deliver more revenues for governments.

I take heart from the fact that some of the spectrum used for national security and public protection is being reassessed voluntarily. If agreement can be found on such sensitive terrain, then surely it is worth exploring whether in certain cases a co-ordinated approach (agreed among all Institutions at EU level) could lead not only to more efficient use of spectrum overall but, more importantly, to the provision of new innovative public services.

Global spectrum rights and usage

The EU is also failing to use its weight in international negotiations to gain fair and good outcomes for citizens and companies operating here. We have shown that we can take decisive steps to modernise spectrum use within the Union, but we must address the slow pace of change in institutions such as the ITU.

The way in which international negotiations are conducted has to be in line with the respective EU and national competences. In areas covered by EU rules there has to be a common EU position and proper coordination. There are several areas where this will be essential in the negotiations that will take place in the ITU in 2012.

Thanks and next steps after today

To conclude, I would like to thank you all for the contributions you have already made to this very interesting discussion and for the contributions to come today.

I promise to pick up on the input from this event and from the Radio Spectrum Policy Group, as well as from all the contributions that will be submitted in the framework of the ongoing public consultation.

On this basis, I will come back with a proposal for an ambitious policy programme to be considered by the European Parliament and the EU's Council of Ministers.

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