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My plans for a digital Europe

By Neelie Kroes  -  13.12.2012 / 04:05 CET
Competition, regulation and investment are vital for our digital future

In its editorial last week, European Voice asked me to identify myself and what I stand for. I am delighted to have that opportunity. 

My goal is to get every European digital: improving the lives of young and old. Europe must be equipped with the right legal frameworks and broadband networks to enable huge new digital opportunities, and give us a much-needed growth boost.

A modernised copyright system is indeed one essential element, benefiting both creators and consumers. So I am delighted that over the coming year, Michel Barnier, Androulla Vassilliou and I will be working hand in hand on the most urgent issues.

But it is no good having the right rules for online films, if people cannot get the broadband speeds to upload or watch them.

Fast connections cannot be a luxury for the lucky urban few. Fast broadband for all is essential to our competitiveness. To achieve that goal, I am ready to take on vested interests and ‘business as usual'.

First, we should recall that most Europeans today enjoy some of the lowest retail broadband prices in the world. That is thanks to a decade of liberalisation and competition, a vital but incomplete project. That is why I have proposed to boost competition, by giving alternative operators truly equivalent, non-discriminatory access to incumbent networks – and frankly, incumbents do not like it.

Second, last year, we explicitly considered lowering wholesale prices for access to copper networks. The evidence – from national regulators, potential investors and independent analysts – was that this would undermine, not stimulate, broadband investment, as the copper price anchor would drag down the potential rewards from faster networks, and scare investors off these riskier investments. Instead, I support convergence within our single market, stabilising copper access prices in real terms around the current average, which is itself based on the detailed market knowledge of national regulators. Of course, we will have to look carefully at countries where regulated prices are currently lower. Those prices may reflect lower local costs, or simply the need to meet competition from other networks, such as cable or mobile. Sometimes the low price may be an illusion, if competition is frustrated by other practices which stronger anti-discrimination rules should fix.

Third, when operators are thinking of investing in new networks with uncertain demand, they need a predictable regulatory environment, and the flexibility to adapt their commercial strategies. And that is what we are delivering. But that hardly means they have carte blanche to raise retail prices: in a market that includes a price-regulated alternative as well as increasingly rapid wireless networks, consumers have options.

European Voice suggests the EU should link broadband regulation to specific investment commitments. I do not agree.

For one thing, independent national regulatory authorities have confirmed that such an approach would be unworkable, being open to ‘gaming' and abuse. And for another, in a market that is open, liberal, and competitive, the best way forward is for public authorities to secure a level playing-field, keep intervention and technological second-guessing to a minimum, and frame the right economic incentives for all: not to do private deals with one or other special interest groups.

The approach I have set out provides the right incentives. Even since plans were set out in July, the European Investment Bank is seeing significantly more investment projects proposed.

Of course, the announcement I made in July was just part of the story. We have also proposed the ‘digital Connecting Europe Facility', to cut project risk and bring in private financing for investments by all kinds of operators. I hope EU leaders can soon agree on this essential investment in our digital future. Plus, we are working on legislation to make the roll-out of broadband cheaper. And my colleague Joaquín Almunia, the commissioner for competition, will shortly announce new guidelines on broadband state aid, for areas where the market does not deliver.

All in all, we are offering a balanced package. Alternative operators lobby against certain aspects (stable, cost-based copper prices and pricing flexibility for next-generation networks); incumbents against others (the stringent new non-discrimination rules). But such interest groups are not, for me, what counts. I am not in the business of giving out presents, or offering new holidays. I am determined to get every European digital.

The interests I really care about are those of European citizens and the European economy. We are doing the best by them if we build a connected, competitive continent, one where everyone has access to the internet.

Neelie Kroes is the European commissioner for the digital agenda.

© 2014 European Voice. All rights reserved.
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