Broadband for all: new regulatory certainty to allow investment in the next generation

Source: N. (Neelie) Kroes i, published on Thursday, July 12 2012.

Regular readers of this blog will know how central broadband targets are to our digital agenda. By 2020, I want half of all Europeans with broadband subscriptions at 100 Megabit/s or higher.

We’re going to need those high speeds: and the “next generation” fibre networks to support them. Those great new great apps and services - like the cloud, smart cities, or e-Health — won’t all be able to run properly on the copper networks that underlie today’s ADSL connections. But choking off those services will choke off tomorrow’s growth. We need strong, healthy companies to invest in the necessary infrastructure - and to compete to invest where it makes sense.

You may recall that, starting last October, we consulted on how to use the EU’s regulatory framework to achieve some of these goals, exploring a number of ideas and a number of models. And today I announce the decisions I am taking.

I’ll won’t repeat all the technical details in this blog: though they are set out in full here for the experts. The three key points are:

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    Tougher non-discrimination rules to ensure “incumbent” operators do not get an unfair advantage.
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    One of the issues raised in our consultation relates to the prices charged for wholesale access to copper networks. The evidence shows that lowering those prices will not induce greater investment in very fast broadband. But we do need to aim at more consistency in the approach to price regulation between Member States - some differences can be justified by local conditions, but current outcomes vary too much; and that’s a single market issue.
  • - 
    More flexibility on how “next generation” wholesale products can be priced: subject to meeting strict conditions to ensure fair competition.

These decisions will be put into legal form through formal Recommendations I’ll make before the end of this year. And they will be durable, applying until at least 2020.

Overall, for investment of any kind to take place, investors need to see a healthy return that takes account of risks. The regulatory framework alone can’t do that - it takes other measures, too, like to boost online content, public funding and innovative public-private financing from the CEF and structural funds, and measures to reduce the cost of roll-out.

But today’s announcement is one important piece of the puzzle. It gives more consistency within our single market; it allows fair competition. And most importantly, it provides the regulatory certainty needed for long-term investment to happen.

You can read the statement in full here, and my remarks at the press conference here.

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