Explanatory Memorandum to COM(2013)329 - Guidelines for trans-European telecommunications networks - Main contents
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This page contains a limited version of this dossier in the EU Monitor.
| dossier | COM(2013)329 - Guidelines for trans-European telecommunications networks. |
|---|---|
| source | COM(2013)329  |
| date | 28-05-2013 |
This initiative is anchored in the Europe 2020 Strategy for smart, sustainable and inclusive growth i, which put digital infrastructures at the forefront as part of the flagship initiative 'Digital Agenda for Europe' i. It underlined The Digital Agenda seeks, among other things, to deploy cross-border public online services, in order to facilitate the mobility of businesses and citizens. In particular, interoperability of public services is required where single market legislation and initiatives (such as the Services Directive or the eProcurement Action Plan) rely on the possibility for businesses to interact and do business with public administrations by electronic means and across borders. The Digital Agenda further underlines the need to ensure the roll-out and take-up of broadband for all, at increasing speeds, through both fixed and wireless technologies, and to facilitate investment in the new very fast open and competitive internet networks that will be are the arteries of a future modern economy. The EU has set itself ambitious targets in terms of broadband roll-out and take up by 2020.
On 29 June 2011, the Commission adopted the Communication 'A Budget for Europe 2020' on the next multi-annual financial framework (MFF) (2014-2020)[3], which proposes the creation of a Connecting Europe Facility (CEF) to promote the completion of priority energy, transport and digital infrastructures with a single fund of EUR 40 billion, out of which the Commission proposed that EUR 9.2 billion are be dedicated to digital networks and services.
On 8 February 2013, the European Council adopted conclusions on a new MFF setting the budget for 'CEF Digital' at EUR 1 billion. On this basis, the Commission now proposes to modify its proposal for a Regulation on guidelines for trans-European telecommunications networks. At the time of writing, the negotiations between the Council and the European Parliament on the next Multiannual Financial Framework have not yet been concluded. Likewise, negotiations on the proposal for a Regulation establishing the CEF are on-going.
The modified proposal takes, to the extent possible, account of the latest positions in the Council and in the relevant European Parliament committee. It aims to focus the CEF intervention on a smaller number of digital service infrastructures, based on a stringent set of criteria for prioritisation, and a limited contribution to broadband via financial instruments, with a view to leverage private investment as well as investment from public sources other than CEF. Despite its limited financial contribution regarding broadband, the proposal sets a framework enabling wider contributions from business and institutional players such as the European Investment Bank.
The purpose of this Regulation is to establish a series of guidelines covering the objectives and priorities envisaged for broadband networks and digital service infrastructures in the field of telecommunications in the context of the Connecting Europe Facility CEF.
The guidelines identify in annex projects of common interest for the deployment of broadband networks and digital service infrastructures and broadband networks. These projects shall contribute to improving the competitiveness of the European economy including small and medium sized enterprises (SMEs), promote the interconnection and interoperability of national, regional and local networks as well as access to such networks and support the development of a Digital Single Market. They shall be eligible for EU financial support under the instruments available under the Regulation on Connecting Europe Facility which accompanies this Regulation.
This Regulation aims at removing The approach in this Regulation, is to aim for the removal of bottlenecks which hinder the completion of the Digital Single Market i.e. providing connectivity to the network and access, including across borders, to an infrastructure of public digital services. The blockages in operational terms for the telecom networks, in contrast to e.g. financing a ring-road around a capital city which is essential for fluidity in a transport corridor, concern both supply-side and demand side aspects. For the supply side, the limitations relate to a strong degree of sub-optimal market failures situation and the concomitant weak business cases for investment in broadband networks and delivery of essential public interest services (e.g. eHealth, eIdentity, eProcurement and their cross-border interoperability). On the demand side, the Digital Single Market with its considerable growth potential relies on all citizens, businesses and administrations being connected to digital networks.
The Connecting Europe Facility aims at using innovative financial instruments to incentivise infrastructure investment by reducing investment risk and providing longer-term financing for both alternative and incumbent investors. Innovative financial instruments provide an important leverage effect on private and other public investment while still relying on market mechanisms. Where the business case for infrastructure investment is particularly weak the Connecting Europe Facility also foresees the possibility to offer co-financing via grants.
In the field of broadband networks, actions contributing to projects of common interest in the area of broadband shall support investments in networks capable of achieving, by 2020, the Digital Agenda for Europe targets of universal coverage at 30Mbps; or having at least 50% of households subscribing to speeds above 100Mbps. A balanced portfolio of 30 and 100 Mbps projects will be created and due account should also be taken of Member States' investment needs which are indicatively assessed to be up to 270 billion €.
For the digital service infrastructure infrastructures, the bottlenecks in terms of service deployment within interoperable frameworks are addressed through procurement and direct grant schemes, in certain cases mostly with high co-funding rates full funding of platforms at EU level, as there are no natural owners of a European interoperable service infrastructure. Indeed, neither single Member States, nor private investors would ensure service deployment within interoperable frameworks of cross-border services. The EU added value is thus high.
Projects of common interest in the field of digital service infrastructures give priority firstly to building blocks as listed in the Annex include trans-European high-speed backbone connections for public administrations, cross–border delivery of eGovernment services based on interoperable identification and authentication (e.g. Europe-wide electronic procedures: to set up a business; for cross-border procurement, e-Justice, cross-border eHealth services); enabling access to public sector information, including digital resources of European heritage, data.eu and multilingual resources; safety and security (safer internet and critical service infrastructures) and smart energy services. Projects of common interest may also include the operation of electronic public services implemented under other Community programs such as the ISA program (“Interoperability solutions for European public administrations”). On a yearly basis, according to the funding available, specific Digital Service Infrastructures in the annex will be identified in view to be deployed.
For broadband networks, the amount of resources available under this Regulation will be small. While the rationale for public financial support in areas where private investment is insufficient remains valid, public support will need to come primarily from other sources than CEF, in particular from national sources and from the European Structural and Investment Funds, where Information and Communication Technologies are likely to be included among the thematic objectives covered by the thematic priority concentration requirements.
However, given the key importance of broadband networks for growth and jobs, and in view of the challenges – both financial and technical – connected to public investment in the sector, this Regulation foresees a limited, enabling intervention. CEF will finance a small contribution to the setting up of financial instruments at European Union (hereafter referred to as Union) level, in particular in cooperation with the European Investment Bank, with the potential to facilitate the efficient use of other public as well as private resources. Hence, CEF will only be able to finance a limited number of broadband projects by itself, but in addition it will facilitate the efficient allocation of, for example, European Structural and Investment Funds (ESIF), by enabling Managing Authorities to make a contribution from the operational programmes. Such contributions will be ring-fenced for use in the Member State or region concerned and could facilitate critical mass and economies of scale in project delivery. In setting a framework enabling wider contributions from business and institutional players, the proposal seeks to multiply the level of contribution to broadband projects of common interest well beyond the funding enabled through the Regulation.
Actions contributing to projects of common interest shall be eligible for EU financial support under the instruments available under the Regulation establishing the CEF Connecting Europe Facility i. The present proposal is therefore to be seen in conjunction with the proposal for that Regulation. The Regulation also stipulates the criteria for the identification of new projects of common interest, on the basis of the Commission's assessment of changing political priorities, technological developments or the situation in the relevant markets.
Contents
- RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND IMPACT ASSESSMENTS
- LEGAL ELEMENTS OF THE PROPOSAL
- BUDGETARY IMPLICATION
- General context
- Purpose of the proposal
- Legal basis
- Subsidiarity and proportionality
- Choice of legal instrument
- Funding
- Delegation of powers
- Implications for other Commission proposals
As regards broadband rollout, numerous consultations with Member States, industry and social stakeholders have been carried out. Notably, these included a roundtable of Vice-President Kroes with CEOs from content providers, equipment makers, investors and telecoms operators from the world's leading companies such as Nokia, Alcatel Lucent, Google, Ericsson, News Corp etc, and the first Digital Agenda Assembly, which took place in Brussels on 16th and 17th June 2011, bringing together more than 1,000 stakeholders from the private and the public sectors, as well as civil society. On these and numerous other occasions, stakeholders widely shared the Commission's assessment that the existing telecom investment model is insufficient to bring about the rollout of affordable, high-quality broadband infrastructures for all European citizens, and they welcome the Commission's plans to use targeted public investment, e.g. through the use of innovative financial instruments, to leverage the necessary infrastructure investment to support alternative and more sustainable models of investment.
The European Parliament in a draft report on the future Multi-annual Financial Framework (MFF) recognised the importance of using the budget to leverage investment in broadband.
As far as cross-border digital service infrastructures are concerned, the Commission has been working with various stakeholder groups for many years. Evaluations and expert advise on existing activities, such as Europeana (for cultural heritage) or the Safer Internet programme generally call for activities to be continued and expanded.
In light of the indicative budget cut from 9.2bn to 1bn EUR, there is a clear need to limit the scope of the programme. For digital service infrastructures, this could have be achieved either by reducing the number of services proposed originally, or by introducing a more stringent set of funding criteria. The present Commission proposal in fact does both: Two services have been not been a retained in the annex of this proposal ("Trans-European high-speed backbone connections for public administrations", 'Information and communication technology solutions for intelligent energy networks and for the provision of Smart Energy Services') for budgetary reasons, while one general service infrastructure has been added (see below).
In the legislative deliberations so far, the Council Working Group on Telecommunications suggested adding additional digital service infrastructures on 'Electronic procedures for moving from one European country to another', 'European platform for the interconnection of employment and social security services', and 'Online administrative cooperation platforms'. For budgetary reasons, not all are retained in the annex of the present proposal.
The European Parliament's Industry, Research and Energy Committee added additional digital service infrastructures on 'Deployment of infrastructures in public transports allowing the use of secure and interoperable mobile proximity services', 'Online Dispute Resolution Platform', 'European Platform for Access to Educational Resources', and 'Cross border interoperable electronic invoicing services'. Some of them are retained in the annex of the present proposal.
In the area of broadband, the programme could either not foresee any intervention, or provide for a limited intervention seeking to leverage private and other public funds. As there will be EU funds available for broadband under the ESIF, in particular as a fourth priority concentration theme under the European Regional Development Fund, and as the use of structural funds for broadband has been a challenge, the present proposal foresees the setting up of financial instruments with a view to providing an efficient way to allocate, inter alia, structural funds.
Both Council and Parliament shared the view that the intervention should not displace private investment. Both institutions further agreed that it should be based on the principle of technological neutrality – however, the EP introduced very ambitious target transmission speeds ("1Gbps where possible and above "), while some Member States sought to relax the Commission's original proposal linking CEF intervention to the second Digital Agenda for Europe target of 30 Mbps. By insisting that EU funds be prioritised to state-of-the art technologies, while giving Member States flexibility in the choice of projects in their countries that would benefit from access to long term funds, the present proposal reaffirms the link to the Digital Agenda targets, while retaining the spirit of preferences expressed by both institutions. There were further discussions on the preferred method of intervention, i.e. grants or financial instruments (loans, guarantees, project bonds, equity). In view of the limited resources, the present proposal only provides for the setting up of financial instruments, as sources of efficiently priced long term funds, aligned to the infrastructure needs.
On horizontal points, the original Commission proposal foresaw Delegated Act powers to amend the list of Projects of Common Interest in the Annex. The present proposal takes account of the concerns expressed in particular by Member States, and instead foresees sufficiently flexible wording in the Annex, and recognises that the necessary programme adjustments will be made by Implementing Act.
During the legislative and budget negotiations, the CEF was endorsed by numerous stakeholder organisations, such as Digital Europe, the Europeana Foundation, the Public Sector Information Alliance, Multilingual Europe Technology Alliance, the European Telecommunications Network Operators' Association, and the European Competitive Telecommunications Association, and the FTTH Council.
The original Impact Assessment report, carried out in 2011, discussed discusses two options. The first, baseline option foresees foresaw no EU funding to be allocated to broadband other than, potentially, through the structural funds ESIF and the continuation of the Competitiveness and Innovation Programme for digital service infrastructures in the scale of pilots only. In this scenario no critical mass or deployment of digital services would be achieved, investment in broadband would continue to be insufficient and inefficiently funded in many regions due to lack of competitive pressure and high commercial risk. Equally, public online services can be expected to remain under-developed and not inter-operable across borders due to fragmentation or of sub-optimal efforts and technical solutions, lack of critical mass, high costs for service providers and beneficiaries of services. Hence, this option would not contribute to attaining the Digital Single Market, and many Europeans would continue to miss out on digital opportunities.
The second option proposes a financing tool tools which would complement and leverage the financing resources currently available under the first option. This is the line of action included in the MFF proposal released by the European Commission on 29 June 2011, creating a 'Connecting Europe Facility' to finance infrastructure. The new facility will finance infrastructure projects with high EU added value, not only hard infrastructure, but also soft and smart infrastructure and governance structures to realise the transport 'core network', the energy 'priority corridors' as well as digital infrastructure. The facility would target projects with high European value added, such as cross-border interconnections or the deployment of EU-wide systems, which must be implemented by 2020. In order to maximise impact, appropriate provisions would ensure the combination of market - based instruments and EU direct support, in order to encourage the participation of specialised infrastructure investors. In the case of grants, the Commission would remain responsible for the overall planning and project selection, with the possible support of an executive agency, while project promoters would ensure physical implementation on the ground. In the case of financial instruments, implementation will be delegated to specialised financial institutions, but the Commission will determine the eligibility. Member States will contribute to the effort by developing national plans for high speed internet in line with the broadband targets, while mapping of broadband infrastructure and services (at EU and national/regional level) will identify gaps in coverage and stimulate initiatives from a multiplicity of private and public investors. The new proposal does not fundamentally change the spirit or the methods of intervention analysed in the second option, but through more stringent eligibility criteria it reduces its scope.
A large number of cross-border digital services, implementing exchanges between European public administrations in support of EU policies, are a reality. When providing new solutions, it is important to capitalise on existing solutions implemented in the context of other European initiatives, avoid duplication of work, and ensure coordination and alignment of approaches and solutions across initiatives and policies, such as for instance the ISA programme, the Fiscalis programme and Horizon 2020.
The proposed Regulation will repeal and replace Decision 1336/97 of the European Parliament and of the Council of 17 June 1997 on a series of Guidelines for trans-European telecommunications networks.
The proposed intervention will be pursuant to Article 172 TFEU, which provides a legal base for the EU intervention supporting the establishment and development of trans-European networks in the areas of transport, telecommunications and energy infrastructures.
The coordinated development of a trans-European telecommunications networks to support the deployment of broadband infrastructures and promotion of services within the single European market and the economic, social and territorial cohesion requires action to be taken at Union level as the actions could not be taken individually by Member States.
The proposal complies with the proportionality principle, and stays within the scope of action in the field of the trans-European telecommunications networks, as defined in Article 170 of the Treaty on the Functioning of the European Union.
The current Telecommunications Guidelines have been proposed and adopted as a Decision of the European Parliament and of the Council which is specifically addressed to the Member States, rendering the Guidelines binding in their entirety for all the Member States.
However, the instrument will facilitate in particular the deployment of telecommunications infrastructure and promotion of services by private entities (including operators, utilities, equipment manufacturers etc) and regional and local authorities. With more actors besides the Member States becoming involved in the planning, development and operation of digital telecommunication telecommunications networks, it is important to ensure that the Guidelines be binding for all. The Commission has therefore chosen a Regulation as the legal instrument for this proposal.
Projects of common interest shall be eligible for EU financial support under the instruments available under the Regulation establishing the CEF Connecting Europe Facility [XXX/20012]. Financial support shall be provided in accordance with the relevant rules and procedures adopted by the Union, funding priorities and the availability of resources.
Telecommunication networks are evolving quickly and the list of projects of common interest might have to be modified in future to reflect this fast evolution. To accomplish this, it is proposed that power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission.
The present modification of the Commission proposal affects another file currently in the legislative process, which is the Regulation establishing the CEF. This Regulation determines the conditions, methods and procedures for providing Union financial aid to trans-European networks in the transport, energy, and telecommunications sectors.
The necessary changes will not affect the horizontal elements of the CEF Regulation, apart from marking the Regulation as EEA relevant, in order to allow for the participation of EEA countries.
Changes in the CEF Regulation will be limited and may include the re-formulation of certain recitals to reflect the change in the intervention's focus and the adjustment or deletion of certain provisions, including Article 7.4 on eligibility and conditions for financial assistance in the field of telecommunications and Art.10.4. (b) concerning the funding rates for actions in the field of broadband. In Article 20 the delegation of power to amend the part of the annex dealing with telecommunications will no longer be necessary.
The proposal will not entail any additional cost for the EU budget.
The proposal for a Regulation on guidelines for the implementation of trans-European telecommunication telecommunications networks is linked to the proposal for a Regulation establishing the CEF Connecting Europe Facility (CEF) which will provide the legislative and the financial framework. An The Commission proposal for a new MFF foresaw an amount of € EUR 9.2 billion[5] is allocated for telecommunications within the envelope of the CEF. The European Council conclusions of 8 February 2013 on MFF 2014-2020 for the telecommunications part of CEF set an amount at EUR 1.0 billion (in 2011 prices). The final amount allocated to telecommunications will be known once the political agreement on the MFF figures will be reached and the new legal base is adopted by the Legislative Authority.