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European Commission

Neelie Kroes

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

Balancing investment and competition in European broadband market

ECTA Regulatory conference/Brussels

27 November 2012

Welcome.

Right at the centre of our digital agenda for Europe are our broadband targets: fast broadband coverage for all, with half of Europeans taking up ultra-fast subscriptions.

That's not a coincidence. It's because without this, none of the rest of internet innovation can happen in the same way – fast cloud access, eHealth, smart cities, you name it.

And it's because all of those innovations can boost our economy, generate jobs, and revitalise our public services. All things we really need right now.

That's an investment in our economic future. One that other parts of the world, from the USA to China, are taking very seriously.

If we don't do likewise, we're letting ourselves down badly. And we're letting the next generation down, too: a generation well placed to find new innovations using new technology, but a generation facing 50% unemployment.

For the most part that is an investment that you, the private sector, is best placed to make: but only if you have the right framework.

The regulatory framework is a powerful tool: it should be an enabler, not an obstacle, to investment. And an important way to steer investment decisions, and help you make your business case. It can, indeed it must, send the signals to enhance growth prospects for the sector.

On 12 July I set out such a framework. One to deliver a level playing field for competition. A framework that gives the right "buy or build" signals. To offer the stability and consistency needed for long-term investment. And all that without unnecessary intervention, without unduly constraining flexibility.

The 12 July package will secure truly equivalent access by alternative operators to incumbent networks. Because that is probably the most important guarantee of sustainable competition.

A true level playing field then allows us to focus on targeting regulation efficiently; and allowing for flexibility where that would encourage investment.

I am not talking about regulatory holidays. This is about giving investing operators the chance to experiment with prices of NGA products — but only as long as strong competitive safeguards are in place. In the face of uncertain demand, such flexibility is essential.

On the issue of copper prices, in particular, I know there is a vigorous debate; often quite polarised. Your members arguing for decreasing copper prices and others for the opposite.

However, the clearest message I got from investors and potential investors was the need for predictable and stable rules. And that's what we are doing. The proposed method should not lead to an increase of the average copper price; but equally, it will not artificially force copper prices down. It is about consistency and stability. This framework will last until at least 2020, giving you the long term perspective you need.

Overall, this is a balanced package for competition and investment. Incumbent and alternative operators find bits that they like and bits that they don't. That's natural. But this is because we have struck the balance. It is not a package where you can pick and choose your favourite bits: that wouldn't help investment, nor market certainty.

I'm pleased that July's announcement is already directly resulting in new investment. I know because I see many operators, including alternative operators, have announced it. And it was also recently confirmed to me by the EIB's President: he reports a 20-25% increase in investment in the sector since July. So we're already seeing the effect of the announcement.

And now we need to build on that momentum. For my part I want to give you the certainty that you need to invest. You have my assurance that we will implement swiftly and consistently. And we are working very closely with national authorities in that regard.

In fact, just last week I was able to discuss this with the heads of all 27 national regulators. There was, of course, a high level of interest, and many questions. But we agreed, absolutely agreed, on our shared commitment to promoting broadband connectivity. On the need to boost NGA investment so Europe can grow and prosper long term. And that this should proceed with the essential components of transparency, predictability and stability — while protecting and building on the competitive gains of the last ten years.

Alongside that, of course, we are continuing to push other measures that will help your business case. With ideas to boost demand in our digital single market. And with proposals on how to make roll-out easier and cheaper with lower civil engineering costs.

For instance, by stimulating sharing and co-deployment of passive infrastructures across utilities, increasing mapping transparency, making permits easier, and connecting new constructions with NGA. Studies confirm that such a European approach could cut costs by 30%, and reduce administrative burdens. The proposal is already best practice among member states, and they will retain substantial flexibility to integrate it with their current system.

Plus, of course, there is the Connecting Europe Facility, which could boost confidence, and unlock significant investment: including from alternative investors. I am grateful for ECTA's support on that; I hope that member states see this imperative too.

And alongside all that, we need to make enough spectrum available quickly. Because spectrum is becoming ever more relevant for our broadband targets, and is essential oxygen for wireless communications.

So now it's over to you. Now you know the framework that will apply until at least 2020.You have, or should soon have, the other measures to help.

Now we need action, and investment. By 2020, we could enjoy the many benefits of being a connected, competitive continent. Our people, our economy, and our public services will enjoy those benefits. And so will those who had the courage to invest in a digital future.

Thank you.


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