Connectivity Towards a European Gigabit Society
Conference on Digital Infrastructure at Harz
University Wernigerode ,
16 March 2017
Dr. Robert Henkel
Senior Policy Officer
European Commission
DG CONNECT
Investment in High-Capacity Networks Unit
What is the DSM?
• The Digital Single Market means an area where the free
movement of goods, persons, services and capital is ensured
and where citizens and businesses can therefore seamlessly
access and exercise online activities under conditions of fair
competition, irrespective of their nationality or place of
residence.
• ….. and it is not going to happen without high speed networks
Digital Single Market is based on three pillars
Digital Single Market
Better access for consumers
and businesses to digital goods and services
across Europe
Creating the right
conditions for digital
networks and services to
flourish
Maximising the growth potential of the Digital Economy
Pillar 2
DIGITAL
ENVIRONMENT
Designing rules which match the pace of technology & support infrastructure development.
Shaping the right environment for digital networks and services to flourish
• Review the audiovisual media framework
• Review online platforms, intermediaries
• Review sharing economy
• An ambitious overhaul of EU telecoms rules
• Reinforce trust and security in digital services
Digital Single Market Strategy Deliverables
Connectivity Context
What is the situation today?
The internet has transformed our society and our economy and made people's lives easier
Europeans use the internet to
buy products and services
do their banking
read & watch the news
of European enterprises use cloud computing
of European SMEs sell online
Connectivity Context
EU telecoms rules have brought basic broadband to all Europeans at low prices
Price for 12-30 Mbps broadband has dropped by 57% since 2007
At the same time, internet traffic continues to grow at an unprecedented rate
Global mobile internet & internet traffic 2015- 2020
exabytes
Connectivity Context
Fixed internet connection
• In 2015, 71% of European households had access to a fast fixed internet connection
• But this goes down to 28% for households in rural areas
4G mobile coverage
• In 2015, the EU average of 4G mobile coverage is 86%
• But this goes down to 36% for households in rural areas
This is not enough to address the growing need for speed, quality and reliability of the infrastructure EU action is needed
The Public Consultation on Needs for Internet Speed and Quality Beyond 2020
ran until end November
2015
•Current needs
•Future needs
•Policy measures to fulfil those needs
About
•The design and implementation of our broadband roll-out related tools
Will contribute to
Needs for Internet Speed and Quality Beyond 2020
•Around 1550 contributions, including 15% by organisations
•Many position papers State of play
•Meetings with representatives of e.g. automotive, video games, R&I, e-commerce, SMEs, etc.
Sector specific approach
Public Consultation (Sept.-Dec. 2016)
Connectivity The Commission's proposal
3 strategic connectivity objectives for 2025
1. A new Electronic Communications Code to help build future networks
2. WiFi4EU
3. An action plan for 5G
1. All main socio-economic drivers should have access to extremely high - gigabit – connectivity
2. All European households, rural or urban, should have access to connectivity offering a download speed of at least 100 Mbps
3. All urban areas and major roads and railways should have uninterrupted 5G coverage and 5G should be commercially available in at least one major city in each EU Member State by 2020
To be supported by 3 main new measures
Connectivity Electronic Communications Code
• Market regulation only where end-user interest requires it and where operators' commercial arrangements don't deliver competitive outcomes
• Reduced regulation where rival operators co-invest in very high-capacity networks & easier for smaller players to be part of investment projects
• Making investment case more predictable for "first movers" who take the risk to invest in less profitable areas, such as rural areas
• Easier to switch suppliers when consumers are signed up to bundles
• Ensure vulnerable groups (like the elderly or disable people) have the right to affordable internet contracts
Electronic Communications Code
1 Modernisation of current telecoms rules to drive investment
Increased competition and predictability for investments:
Stronger consumer protection
Connectivity Electronic Communications Code
• Long licence durations, coupled with more stringent requirements to use spectrum effectively and efficiently.
• Coordination of basic parameters such as the timing of assignments to ensure timely release of spectrum to the EU market
• More converged spectrum policies across the EU
• Selected rules extended to new online players which offer equivalent services to traditional operators, to ensure security requirements apply.
Possibility for users to reach the EU emergency number 112 via such online services in the future with now additional costs More
A safer online environment for users and fairer rules for all players:
Better use of radio-frequencies
Connectivity WiFi4EU
WiFi4EU
2 Free Wi-Fi for Europeans in public spaces
120 million of EU investment for interested local authorities to offer free Wi-Fi in public spaces
At least 6000 to 8000 local communities
49-50 million connections per day
How will it work?
• The EU to fund the equipment & installation with vouchers; public bodies to pay monthly subscription & maintenance
• Local communities need to commit to providing very high speed internet via WIFI4EU, and that they are not competing with a similar, existing private or public Wi-Fi offer
Connectivity WiFi4EU
Who will benefit?
WIFI4EU access points will reach both local residents and visitors across the EU
All Europeans
Public administrations, hospitals, libraries and other bodies with a public mission
They can take advantage of the access points to develop & promote their own digital services, such as e-government, e-health or e-tourism
15
Vouchers
•Cover infrastructure costs
Communities
•Cover payments to the operator
Regulatory framework
•Removes legal obstacles to deployment and share WiFi access by local communities.
Fast deployment
Agile audit
Real-monitoring
Shared involvement in the project increases the potential for the success story
Connectivity 5G Action Plan
Action plan for 5G
3 Common roadmap for a coordinated deployment of 5G in 2020
Common EU calendar for a coordinated 5G commercial launch in 2020
Joint work with Member States and industry stakeholders to:
Identify and allocate spectrum bands for 5G
Organise pan-European 5G trials as of 2018
Promote common global 5G standards & encourage the adoption of national 5G deployment roadmaps across EU Member States
National
5G Roadmaps
2017 2018 2019 2020 2021 2022 2023 2024
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2025
5G Timeline
Spectrum allocation & assignment
Best practice + fibre planning
to boost "small cell" deployment
Cross-border pre-commercial
trials
5G Standardisation
Venture Capital support to innovative start-up in 5G key use
sectors
…
Continued substantial investments
in fibre infrastructure and "small cells"
…
17
Reduce costs of broadband rollout by 80% and make it easier
Better use of existing infrastructure and more transparency, incl. cross-utility
Improved coordination of civil engineering
Simplify permit granting process
Buildings ready for access to high-speed internet
BB Cost Reduction: objectives
Regulation Cost reduction
Where is the money?
Structural funds
•European Regional Development Fund (EFRD)
•European Agricultural Fund for Rural Development (EAFRD)
•Funds for TO2 "Enhancing access to, and use and quality of, ICT"
•€ 6 bln for broadband
•Years 2014-2020
Connecting Europe Facility - Telecoms
•The Connecting Europe Facility (CEF) supports trans- European networks and infrastructures in the sectors of transport, telecommunications and energy
•€150 m for broadband
European Fund for Strategic Investments
(EFSI)
•An initiative launched to help overcome the current investment gap in the EU by mobilising private financing for strategic investments
•??? for broadband
Financial instruments and the Structural Funds…
F.I. and structural funds: CEF credit
enhancement
30% 30%
Structural funds
20% 20% National co-funding
15% 15% CEF (credit enhancement)
35% 35% Senior debt (intermediary and commercial banks)
60% 60% Structural funds (max. co-funding varies by region category)
40% 40%
National co-funding
Traditional grant scheme
Financial Instruments Financing
21
GRANTS FINANCIAL INSTRUMENTS
• Success factor:
• Excellence
• Policy relevance
• Regional importance
• Revenues optional
• Repayment not expected
• Cooperation encourged – consortia welcome
• Success factor:
• Profitability
• Sustanability
• Revenues mandatory
• Repayment is a must
• Cooperation must be formalised (there must be a legal entity)
22
Boost investment in strategic projects and
access to finance via the European Fund for
Strategic Investments (EFSI) within EIB/EIF
Cooperation with National Promotional Banks
and the EIB
1. MOBILISING FINANCE FOR INVESTMENT
European Investment Project Portal
European Investment Advisory Hub:
technical assistance
2. MAKING FINANCE REACH THE REAL ECONOMY
Predictability and quality of regulation
Removing non-financial, regulatory barriers
in key sectors within EU Single Market
Structural reforms at national level
3. IMPROVED INVESTMENT ENVIRONMENT
EU Investment Plan: 3 pillars
Investment Plan Financing
EU Financing EFSI
Corporates of all sizes
Utilities
Public sector entities (non-sovereign)
SMEs (below 250 employees) and/or MidCaps (up to 3,000 employees)
National Promotional Banks or commercial banks for intermediation
Dedicated investment platforms possible
Eligible partners
25
Contributions by MS / National Promotional Banks
Member State NPB Contribution announced (up to)
Germany KfW € 8,000m
Spain ICO € 1,500m
France CDC € 8,000m
Italy CDP € 8,000m
Luxembourg SNCI € 80m
Poland BGK/PIR € 8,000m
Slovakia SIH/SZRB € 400m
Bulgaria BDB € 100m
United Kingdom € 8,500m
TOTAL € 42,580m
European Investment Advisory Hub (EIAH)
• A single access point to a wide range of advisory services.
• Strengthened advisory support throughout the project cycle: project identification, preparation and implementation incl. the use of financial instruments, advice on structuring and implementing public-private partnerships and facilitation of access to finance.
• A cooperation platform – a peer-to-peer exchange and sharing of know-how regarding advisory services.
• EUR 20 m annual budget in addition to existing TA programs managed by the EIB (Jaspers, fi-compass, Innovfin…)
The Hub seeks to improve project quality and be the reference point for project advisory support in Europe.
EFSI EU Financing
European Investment Project Portal
• What can the European Investment Project Portal (EIPP) do for you?
• Registration on the EIPP will boost the visibility of your project
• Opportunity to find investors from all over the world looking for investment opportunities in Europe
• Access to a large network of investors, consultants and advisory services that can help you to structure it and finance it
• Is my project eligible for the European Investment Project Portal?
• In order to qualify, projects must be:
• Worth at least EUR 10 million
• Expected to start within three years of their submission to EIPP
• Promoted by a public or private legal entity established in an EU Member State
• Compatible with applicable EU and national laws
Publication of a project can be denied on legal, reputational or other grounds.
Broadband Competence
Office (BCO)
European Commission
AGRI CONNECT REGIO COMP
EU-level T.A.
Broadband Project Promoters
ERDF EAFRD
EIB World Bank
EFSI / CEF
National Promotional Banks
(KfW, CDC, CDP, etc.)
Commercial Banks
GRANTS FINANCIAL
INSTRUMENTS
Implementing body
Managing authority
Managing authority
Implementing body
Member State
OP-level T.A.
Support Facility (coordination of BCO network)
European Investment
Advisory Hub
(EIAH)
Connected Communities
Initiatives
Network of BCOs
Broadband_Europe as an aggregation point for broadband
stakeholders in the EU
Connecting Communities
Cost Reduction
Connecting Europe Facility
Investment Guide
Actions
Stakeholders Enablers
Topics
European Commission Digital Agenda
European Investment Bank
World Bank
BE
http://ec.europa.eu/digital-agenda/en/high-speed-broadband
An important momentum….
• Regultory developments (cost reduction Directive, framework review)
• CEF ready for service
• ESIFs almost finalised
• New tools (State aid framwork simplified, Broadband Europe & BB investment guide) to inform, share and advise
• DSM among the new Commission's top priorities + €315 billion package in preparation including a strong digitial component