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SPEECH/11/689

Neelie Kroes

Vice-President of the European Commission responsible for the Digital Agenda

Connecting Europe Facility – broadband and digital infrastructure services

Press briefing

Warsaw, Poland 19th October 2011

The Connecting Europe Facility proposal would unlock 50 billion euros for network infrastructure—to strengthen our transport, energy and digital networks.

Within that, 9.2 billion euros would be set aside for broadband and digital service infrastructure. This would be a completely new digital infrastructure investment programme, to build the Trans-European Networks of the future. Helping get every European Digital, boost our innovation economy, and invest in jobs for the future.

In this time of crisis, we must focus our efforts on sectors which can drive growth. Information and Communications technology has this potential. Benefiting innovation through new products, new services, and new business models. Benefiting businesses, big and small, through improved productivity and flexible working. And benefiting citizens, giving them new ways not just to shop or socialise, but to learn, receive healthcare, or interact with their governments.

The world's future is digital. Already, in places like Japan, 12% of citizens, consumers and companies have access to ultra fast internet via fibre networks. In Korea, the figure is 15%. Europe must have the infrastructure essential to compete on the global stage.

But here in Europe, we face several problems in deploying broadband, with insufficient investment, problems in accessing capital, and a weak business case for roll-out in less populated areas. This is potentially a serious barrier to growth. So, first, at least 7 billion of the proposed 9.2 billion euros would be made available for investment in high speed broadband infrastructure.

Over just ten years, the right broadband development could give Europe over one trillion euros in additional economic activity, and create millions of jobs. An increase in broadband penetration of 10 percentage points would increase Europe's annual GDP growth by between 0.9 and 1.5 %.

The Facility would stimulate innovation by using innovation, with funding for broadband infrastructure largely in the form of equity, debt, or guarantees.

We would competitively engage new players — like non-telecoms utility companies, or construction firms. Where projects were profitable, public funds could be recuperated and reinvested. And, by giving projects credibility and lowering risk profiles, we could leverage other private and public money. Indeed each euro invested in broadband by such innovative financing could leverage gross private investment of between 6 and 15 euros. In concrete terms, this means that the Facility could leverage a total of between 50 and 100 billion euros.

Under the Digital Agenda, our target by 2020 is to get coverage for every European to fast broadband of over 30 megabits per second; and to get 50% of households subscribing to ultra-fast speeds over 100 megabits per second. This proposal constitutes a substantial proportion of the investment needed to hit those targets.

The remaining part of the proposed 9.2 billion euros would be invested in the joined-up infrastructure needed for pan-European digital public services. Funding, primarily through grants, would be provided to projects which help to build the digital single market. Such projects would make it easier to provide cross-border online public services: whether setting up a business, authenticating identity, delivering government or health services, accessing cultural heritage, setting up an intelligent energy network, or responding to cyber-threats across borders. By ensuring systems can talk to each other, and avoiding fragmentation, we can best serve the needs of an increasingly mobile population.

Overall, these initiatives would fill in the missing links in our transport, energy and broadband networks. They would show that, even in the gloom of an economic crisis, we can still invest in a bright future. And they would be a concrete achievement to tie our continent together, providing smart, sustainable growth in the years to come.

The Commission has put these proposed measures on the table. I call upon the European Parliament and the EU's Council of Ministers to approve them as a matter of urgency.


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