A digital Europe needs digital investment - Main contents

Source: N. (Neelie) Kroes i, published on Tuesday, October 2 2012.

You may recall that last year, the Commission proposed EU funding for high-speed broadband and digital public services, the “Digital Connecting Europe Facility”. That funding could mean over 45 million extra households - more than one in five - connected to fast broadband.

Now it’s decision time on that proposal.

And for me, there’s no better investment in our future. The Digital Agenda can energise our economy, generate jobs, and save public money. But none of it can happen without fast broadband and quality digital services.

Already today we see the havoc when broadband networks get congested. But with Internet use doubling every 2-3 years, those networks need a serious upgrade. Without investment, we condemn our citizens to slow connections with frequent blackouts; we make our businesses less competitive and less productive; we force our public authorities to meet 21^st century expectations using 20^th century systems.

On 12 July I set out the regulatory framework to encourage private investment in broadband. But the fact is private money can’t do it all: broadband needs public support through financial instruments. If we fail to invest, millions in less populated areas will find themselves on the wrong side of the digital divide, cut off from tomorrow’s opportunities. That’s bad for our economy, and bad for our society.

The EU investment we have proposed for broadband is around one billion euros per year. But these are loans, not grants; virtually budget-neutral in the long term. Plus, by using the leverage effect of financial instruments, every cent of that EU budget money works around 7 times harder. So every country in the EU will get back more than they put in.

These economies of scale only happen with EU-level funding through the EIB, attracting high levels of private finance from a wide range of investors (including long-term investors such as the Caisse des Dépôts). National funding alone doesn’t offer markets the same economies of scale, or diversity of risk.

Today I will address decision-makers about this urgent need.

There are difficult decisions to make on the EU Budget. Like how to boost growth while also making public sector savings. But the Digital Connecting Europe Facility offers both. eProcurement could save public authorities 100 billion euros a year; cloud computing could be worth many times that to our economy. Add in the benefits of new online services, smart cities, smart grids, e-Health or the Internet of Things and you see this is an investment well worth making. So let’s seize that opportunity.

Europe needs to keep up. In the USA, ultrafast, 100-Megabit broadband networks go past four in five households: a proportion that’s quadrupled in just three years. Japan has over 20 million fibre connections; China is installing 35 million this year alone. These countries have realised the digital imperative. If Europe doesn’t invest now, we’ll stay stuck in a gloomy past.

Our single market is our crown jewel: but to make sense in the 21^st century it needs to get online, the single market needs to go digital. Let’s invest to become a connected, competitive continent.