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European Commission

Neelie Kroes

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

Building a connected continent

II Italian Digital Agenda Annual Forum at Confindustria /Rome

21 October 2013

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Today we all worry about the economy. Every citizen and every politician.

We face a severe economic crisis; one with devastating effects, particularly on young people.

Fixing this isn't just an academic debate. It's about helping those without jobs, those without certainty, those without hope.

In fact there's much we can do by looking at the future. Thinking about it, preparing for it and investing in it. Investing in tomorrow's growth.

Without doubt, that growth lies online. The web is a vibrant forum for innovation and growth. And a significant boost to performance and productivity.

From socialising to learning the latest news; from logistics to financial transactions; from transport to tourism; big data to cloud computing— today there are few activities untouched or unimproved by digital tools.

The Internet creates 5 jobs for every two lost. 10 percentage points more broadband boosts growth by 1 to 1.5%. And soon 90% of jobs will require digital skills.

That is why Italy needs to start taking connectivity seriously. Yet as it stands, just 14% of Italian homes have coverage by fast, "next generation" broadband networks. That figure, about a quarter of the EU average, puts Italy in last place among the EU. Meanwhile 37% of Italian adults have never used the Internet.

That is a big let-down to the Italian people. But there's a huge opportunity if the country can catch up.

The ICT sector includes some of the biggest companies in the world: yet of those global giants, none are from Europe. Not any more.

The fact is we have lots of top talent and lots of great ideas. But too often, ideas that start in Europe don't stay in Europe. Like Glancee – an Italian startup, last year bought up by Facebook, and packed off to Silicon Valley.

To fix this problem, we need the right supporting ecosystem. Especially broadband: the 21st century infrastructure that underpins connectivity.

Those networks can only be provided by a strong, healthy telecoms sector.

Yet, today, providers cannot easily work as integrated single market operations. They are reduced to rent-seeking in protected national markets, blocking new ideas, and relying on outdated unsustainable revenues.

Rather, we need a sector that looks forward to face the future. A sector that offers plentiful fast broadband and innovative services. A sector that invests and innovates for tomorrow.

All together a single market in telecommunications could be worth 110 billion euros a year. And world-class digital infrastructure could boost productivity growth by 5%.

It's time to bring down the barriers within our single market. Then we can start to see growth in this sector stimulate growth in the entire economy.

Making it easier for operators to work across borders. With more consistent access to fixed networks. Better rules on spectrum, so more Europeans get fast wireless broadband. New rules on WiFi, giving more chances to connect.

Fairer prices – like for calling and texting across Europe: because removing artificial borders is exactly what the EU is here to do. An end to blocking and throttling online services. Allowing new specialised online services, only if they don't slow down the internet for everyone else.

Better consumer rights, like to ensure you get the internet speed and quality you pay for, so you can switch providers without hassle or high costs.

That is our proposal for a Connected Continent.

Much of the response to it – positive and negative – has focused on our proposal to bring about the end of roaming in Europe. Telcos in particular are lobbying fiercely for those rip-offs to stay. So let me clarify a few points.

First, our proposal is not based on mandated price caps. Rather it encourages new, pan-European deals onto the market. If any market player is fighting against a voluntary, market-based mechanism, you have to ask yourself. Why do they fear that competition?

Second, they claim that roaming rip-offs help investment. I don't see that. They have not led to significant investment in recent years; I cannot believe they ever would. Why would you invest in the new networks that support innovative services, if you can make fast money from roaming? In fact, investors want to see business plans that are sustainable and forward-looking.

And that is my third point. Roaming isn't sustainable. No business model based on irritating your customers could be. Even market analysts agree it's on its way out. So let's not look backwards to yesterday's cash cows. But forward to tomorrow's opportunities.

Tomorrow's opportunities are based on data. Innovative, tailored services from a competitive, dynamic market. A market that doesn’t face borders and barriers, but that benefits from the single market boost. For every company trying to do business between multiple sites. Every business user taking their phone abroad. Every citizen wanting seamless connections to the open internet.

They all enjoy the single market: they all need the networks and framework to match their ambitions.

That's what our proposals are about. Ensuring the networks that underpin a vibrant digital single market and a competitive economy.

I am glad Italy is taking this so seriously, placing, digitalisation at the heart of the political agenda. With a new digital agency for Italy. And a great Digital Champion, Francesco Caio, who as you have just heard is pushing this issue hard.

This is an opportunity for Italy to turn the corner, strengthen existing talents, and find new ones.

The EU is putting the tools at your disposal. Over the last seven years, Italy has already programmed €1.6 billion to ICT projects from the EU's Structural Funds. But, as it stands, there isn't enough capacity to plan and implement ICT and broadband projects. That is a major obstacle for Italy to address. Resolve those issues, strengthen that planning, and you can take full advantage of new EU structural and investment funds, for which ICT is a priority area. And you will be removing a major barrier to innovation, productivity and growth. That's an opportunity you can't miss.

We are supporting through legislation, too. We have put forward proposals on eIdentification, to cut the cost of broadband rollout, to ensure secure and resilient networks and systems, and open data, as well as an ambitious cloud computing strategy.

Plus we are supporting digital skills for the future. And I am glad again that Italy is taking this seriously too, through better infrastructure in schools, shared learning resources, and more use of ICT in teaching. And with several Italian pledges to our Grand Coalition for Digital Skills.

EU leaders later this week will discuss our proposals on a telecommunications single market .

I am delighted Italy is recognising the importance of this area, the size of the opportunity on offer. And that they are supporting our proposals for a Connected Continent.

The most progressive, creative and dynamic in Europe can see this opportunity too, and they are calling for change. They recognise that to sail out of the crisis into secure growth, we need to invest in the future. I hope the EU's leaders join with Prime Minister Letta, and see that too.

Thank you.


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