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European Commission

Neelie Kroes

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

A Telecoms Single Market: Building a Connected Continent

Exchange of views on forthcoming legislative initiatives in the area of Digital Agenda: 'Ensuring Connectivity for the Digital Economy' at ITRE Committee Meeting in the European Parliament / Brussels

9 July 2013

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Thank you for inviting me to speak. Today I want to present you with my detailed ideas on building a connected continent.

The world is going digital. This is a growing global market: we must take advantage. But our telecoms sector and ICT ecosystem, once the envy of the world, are not competing. Our citizens and businesses face barriers and unfair charges. This is supposed to be a global network: but it faces border checkpoints, even within our single market.

The rest of the world is racing ahead. America, Japan, Korea have 88% of the world's 4G subscriptions; the EU has just 6. Meanwhile, only 2% of European homes have superfast broadband.

Those problems need solutions. And I intend a package to do that; due first thing in September.

It will bring down borders, stimulate investment, make it easier to operate and communicate across the EU. Building on our existing framework. Boosting our connected continent in three key ways.

First: for truly European networks, it must be easier to communicate across borders. Without operators facing a tangle of different, incompatible rules. If you're allowed to operate anywhere in Europe – authorised within an EU framework — then you should be able to operate everywhere in the EU. And I don't just mean "possible": but straightforward in practice. Like a single authorisation system with supervision by the home member state.

And more chance for the Commission to ensure consistent remedies. Less red tape, less cost, less hassle: that's what a single market means. That's the boost they already have in sectors from banking to broadcasting: now, for telecoms too.

Second, those operators need "inputs" – the networks to run on. Again, as it stands, that's too hard, especially across borders. We need more consistent ways to access fixed networks – like standardising ways to access networks, so-called "virtual bitstream" products. And with interconnection services that guarantee quality. Plus for wireless we need better spectrum rules. Spectrum bands need more consistent licence conditions – like how long licences last, block sizes, fee structures and so on. All those things will make it easier to run a network over multiple countries - and easier to enjoy high quality services over them.

Third, our citizens need to enjoy fair rights and a fair deal – across the Union.

Including the right to net neutrality.

Blocking or throttling services isn't just unfair and annoying for users – it's a death sentence for innovators too. So I will guarantee net neutrality. With more transparency, so you know what's in your contract. Making it easier to switch providers. Allowing the new premium services which so many new services rely on – from cloud computing to eHealth. And I will end anticompetitive blocking and throttling, for every citizen, on every network, on every device. Internet growth depends on openness and innovation: I will provide an absolute safeguard.

A fair deal includes fairer prices. European calls shouldn't count as a costly "international call"; not within a true single market. You shouldn't face a sudden price hike, just to call across an internal border, so any difference in price must be objectively justified by additional costs.

And of course, in a true single market, there are no artificial roaming charges. It's irritating, it's unfair, it belongs to the past. Often, the only remaining reminder of our internal borders is the phone in your pocket: that has to change. Millions of Europeans enjoy great, transparent packages on their mobile subscription; they expect to pay once and have everything included. Not just when they're at home: but when they travel too. They should be able to take their mobile minutes, messages and megabytes with them, wherever they travel in Europe.

I know you raise the issue of roaming in the draft report from Mr Rohde. But let me remind you of one thing: it's not by banning roaming charges that we create a single market. Quite the opposite: it is by creating a single market that we will end roaming surcharges. A market where companies face the same competitive pressure to push down roaming prices as they do at home on their own network. A market where they can attract and keep customers by adding roaming to the competitive bundles they offer. A market where consumers enjoy choice and competition, not borders and barriers.

That is how I want to turn today's fragmented reality into a true competitive single market.

This fragmentation isn't about some breach of EU dogma: it has real consequences. To take just one example: spectrum. Countries are not following their obligations to assign spectrum. But even when it is assigned, each does it differently: so it's harder to bid, plan, and offer services across borders.

Harder for manufacturers to optimise their new gadgets for Europe. Harder for business to benefit from single market economies of scale.

Uncertainties and costs faced by operators are passed on to consumers: meaning higher prices, and poorer service. European manufacturers, who once led the world, today struggle to compete.

This isn't just about one sector. Nor just about phones and tablets. Not any more. Soon all sorts of devices could be connected – from your car to your health device. There's a massive opportunity for people to enjoy pan-European services that work widely: but they're still waiting.

I'm not just looking at one sector: I'm looking at the whole picture. The European telecoms sector and ICT ecosystem are keystones of our economy – and I'd like to see them stronger. A strong telecom sector that stands up for itself in a competitive market. Less reliant on regulation. But not for their sake: this is in everyone's interest.

The fact is, the whole economy is relying on digital tools and networks. Sectors from banking to logistics, automotive to audiovisual. And, beyond that: all kinds of companies are crying out for the connectivity that could transform their business: from videoconferencing to cloud computing to 3D printing. Companies of every size in every sector. They are fed up with not having them.

We cannot leave them stranded. They have European ambitions: we cannot leave them without the communications to match. In an economy relying on information and communication, we cannot sit by while the telecoms sector becomes too weak to compete, invest and innovate. We cannot continue to struggle by with poor, ageing networks.

This matters. The boost from a competitive single market in telecommunications could be 110 billion euros a year. Quality communications for business could be worth 800 billion over 15 years. Broadband could create 2 million jobs. This is investing in tomorrow's growth.

My ambition is large-scale: but my approach is pragmatic. Today our networks and regulations are largely national. A pragmatic approach is not about digging up those networks, tearing up those rulebooks, and starting again from scratch. It's about taking what we have and adapting it; unblocking the bottlenecks, bringing down the barriers. Giving operators, businesses and citizens the single market boost; better services, faster networks, fairer prices.

I know that you have just been discussing a longer term option: a more comprehensive review of the entire ecosystem, as proposed in Mrs Trautmann's report. And I can see the attraction of that. But here's my advice: let's not miss this opportunity to make a real difference to growth and employment.

Realistically, a full review would take 5 years. That is a long time to wait. And these days, lost time means lost opportunity. Think how the world has changed in the last five years – the devices you didn't have, the services that didn't exist. Think how the world will change in the next five. Then think if we can afford to wait that long, while other parts of the world race ahead.

Instead, I am putting forward an incremental but immediate approach: improving the model, to get the best out of the current framework. Taking a significant step towards a single market where technology and service convergence are part of the new reality. Where an updated regulatory framework takes account of these dynamic changes, and where we can take the time to reflect on and then implement the regulatory framework we need for the future.

But first, let's get the telecoms single market right. Let's get it working for Europe.

That's my alternative. And I am giving you, this current Parliament, an instrument: to offer more immediate benefits to our people and our economy. Fewer barriers, more choice, fairer prices, better business services, net neutrality, an end to roaming; a stronger economy creating more jobs. That’s the benefits of a connected, competitive continent. I think it's worth fighting for. So if you believe in Europe, believe in this: and join me in that fight.

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