Ken Ducatel: : DG Information Society and Media, Unit: Lisbon Strategy and i2010Page (1) Broadband and social, economic and territorial cohesion: Challenges,

. Ken Ducatel: : DG Information Society and Media, Unit: Lisbon Strategy and i2010 Page (1)

Broadband and social, economic and Broadband and social, economic and territorial cohesion:territorial cohesion:

Challenges, opportunities and good practices Challenges, opportunities and good practices

for regions to accelerate economic recoveryfor regions to accelerate economic recovery

Ken Ducatel

Head of Unit “Lisbon Strategy and i2010”

DG Information Society and Media

Region for Economic Change eventRegion for Economic Change event

1616thth of February 2009 of February 2009


Broadband and Economic Recovery:some key messages

Broadband and Economic Recovery:some key messages

• Access to an affordable high speed broadband infrastructure fundamental element for individuals, enterprises and governments at all level

• Broadband is key to maintaining social contacts, cultural and political participation, finding jobs, learning skills, accessing information, accessing markets and cutting costs.

• ICT accounts for half the EU productivity growth: (broadband development could create 1 million jobs in Europe to 2015 and extra growth of €850bn)


Broadband and Economic Recovery

Broadband and Economic Recovery

• Europe needs to restructure its economy now to be strong in the high-speed and low-carbon post-crisis economy.

• Europe world leader in broadband take-up: July 2008 penetration rate 21.7%

Denmark, The Netherlands, Sweden and Finland among world leaders

But:

• Large gaps between Member states and between regions: Income, PC ownership, digital literacy, education, demographics, personal

attitudes, cultural differences

• Europe is falling behind on high speed broadbandP2P, Social Networks, IPTV, etc

• Coverage of rural areas not complete Average EU Member State coverage 93%.

30% of rural population no high speed internet


Broadband and Economic Recovery: EU actions

Broadband and Economic Recovery: EU actions

• June 2008, Council calls on Member States to June 2008, Council calls on Member States to define ambitious targets for define ambitious targets for broadband penetration at the national level, to:broadband penetration at the national level, to:

• reach an EU average broadband penetration of 30%

• and national penetration level of at least 15% by 2010

• November 2008 the Commission proposes the Economic Recovery plan: November 2008 the Commission proposes the Economic Recovery plan:

• € 5 bn for trans-European energy interconnections and broadband infrastructure projects

• Commission, Member States and stakeholders to develop a broadband strategy

• focus on under-served and high cost areas where the market does not deliver.

• The aim:

• reach 100% coverage of high speed internet by 2010.

• upgrade existing infrastructure

• promote competitive investments in fibre networks

• endorse the Commission's proposals to free up spectrum for wireless broadband.

• Ongoing discussion in the CouncilOngoing discussion in the Council to approve (or not) the measure: final to approve (or not) the measure: final decision expect in March/April 2009.decision expect in March/April 2009.


How the €1bn of EU money reach rural areas

How the €1bn of EU money reach rural areas

• Money into the Rural Development Programmes, Money into the Rural Development Programmes, managed by rural development managing authorities. managed by rural development managing authorities.

• Deadline 30 June 2009 to Modify Rural Development Deadline 30 June 2009 to Modify Rural Development Programmes: Programmes: identify projects and expenditure for 2009identify projects and expenditure for 2009

• State Aid: State Aid:

• All projects will require notification and approval under state aid rules

• January 2009: Public consultation on “Simplified procedure for the treatment of certain types of State aid”

• Allocation of funds: Allocation of funds: on the basis of the current distribution on the basis of the current distribution for the European Agricultural Fund for Rural Development. for the European Agricultural Fund for Rural Development.

• Cofinancing rate:Cofinancing rate:

• 90% in Convergence regions • 75% in non-Convergence regions• If agreed by the Council, additional co-financing of 10%

in 2009 to promote the economic recovery in Member States


Type of Broadband Measures that can be financed under RD

Type of Broadband Measures that can be financed under RD

• Creation of new broadband infrastructure: including backhaul facilities (e.g. fixed, terrestrial wireless, satellite-based or combination of technologies). include financing of all necessary civil work (including buildings, ducts and masts); relevant software systems and technical equipment necessary to deploy an open communication infrastructure

• Upgrade of existing broadband infrastructure: civil work, software systems and technical equipment for the replacement or upgrade of last mile connection, digitisation of the local switches, LAN network, or backhaul to more centralised point of presence of backbone

• Laying down passive broadband infrastructure (e.g.: civil engineering works such as ducts, and other network elements such as dark fibre, etc.) also in synergy with other infrastructures (energy, transport, water, sewerage networks etc.).


EU Broadband Penetration RateJanuary 2008

EU Broadband Penetration RateJanuary 2008

7,6% 8,

4% 8,8% 9,1% 9,

8%

13,7

%

13,8

%

14,2

%

14,6

%

15,0

%

16,1

%

16,9

%

17,1

%

17,3

%

17,4

%

18,3

%

21,2

% 23,3

%

23,8

% 25,4

%

25,6

%

25,7

%

31,2

%

34,2

%

34,6

%

35,6

%

19,0

%

20,0

%0%

5%

10%

15%

20%

25%

30%

35%

40%

BG PL SK EL RO LT CY HU CZ LV PT MT IT SI IE ES AT EU27 EE FR DE LU BE UK SE NL FI DK

Source: Commission services. Data for FR, NL, AT, EE and LT refer to October 2007

Broadband lines per region (million) January 2008

99,281,6

43,1

50

100

EU US and Canada Japan andKorea

EU penetration average: 20%


DSL Coverage as % population December 2007

DSL Coverage as % population December 2007

Broadband Coverage: Member States and EU averages92

% 100%

80% 85

%10

0%85

% 96%

99%

96%

86% 91

%92

%89

% 94%

87%

88% 10

0%99

%99

%96

%64

%95

%

74%

92%

91% 98

%10

0%93

%

0%10%20%30%40%50%60%70%80%90%

100%

Aus

tria

Bel

gium

Bul

garia

Cyp

rus

Cze

chD

enm

ark

Est

onia

Finl

and

Fran

ceG

erm

any

Gre

ece

Hun

gary

Icel

and

Irela

ndIta

lyLa

tvia

Lith

uani

aLu

xem

bour

gM

alta

Net

herla

nds

Nor

way

Pol

and

Por

tuga

lR

oman

iaS

lova

kia

Slo

veni

aS

pain

Sw

eden U

KE

U a

vera

ge


Broadband Coverage Urban V Rural (Dec 2007)

0%

20%

40%

60%

80%

100%

120%

Au

str

ia

Be

lgiu

m

Bu

lga

ria

Cyp

rus

Cze

ch

Re

pu

blic

De

nm

ark

Esto

nia

Fin

lan

d

Fra

nce

Ge

rma

ny

Gre

ece

Hu

ng

ary

Ice

lan

d

Ire

lan

d

Ita

ly

La

tvia

Lith

ua

nia

Lu

xe

mb

ou

rg

Ma

lta

Ne

the

rla

nd

s

No

rwa

y

Po

lan

d

Po

rtu

ga

l

Ro

ma

nia

Slo

va

kia

Slo

ve

nia

Sp

ain

Sw

ed

en

UK

EU

ave

rag

e

Urban Rural


Broadband penetration gap more and less developed M.S.Broadband penetration gap

more and less developed M.S.

From 8.5% in 2003 to 18.7% in 2005 and 28 points in 2008

8.5%

13.5%

19.2%

25.2%

31.9%

35.6%

7.6%

4.4%

1.4%0.5%0.1%0.0%

3.4

20.0

16.3

12.8

8.6

5.9

0%

5%

10%

15%

20%

25%

30%

35%

40%

2003 2004 2005 2006 2007 2008

BB

pen

etra

tio

n le

vel

MAX MIN EU AVERAGE Diference in % points

Penetration gap widens: from 3.4 % points in 2003 to 20% points in 2008


Least expensive Broadband offer for 1Mb access line

Least expensive Broadband offer for 1Mb access line

0

10

20

30

40

50

60

70

80

CY SK LT BG BE PL ES PT RO DK LU MT DE LV UK EE SI FI HU NL IE

To

tal

co

st

pe

r m

on

th i

n €

/PP

P,

VA

T i

nc

lud

ed

January 07

Price of broadband offers in the EU vary considerably from a country to another:(taking into account PPP - purchase power parity)


Correlation broadband price/penetration EU 27Correlation broadband price/penetration EU 27

0%

5%

10%

15%

20%

25%

30%

35%

40%

0 5 10 15 20 25 30 35 40 45 50

Least expensive price for a 1-2 Mbs monthly broadband access (€/PPP), April 2007

Bro

ad

ba

nd

pe

ne

tra

tio

n,

Ju

ly 2

00

7

EL: Out of scale. Data on prices for AT, CZ, IT, FR and SE not available

DK

SK

BGPLRO

LTHU LV

MT PT

SIIEES

EE DE

UK BELU

FI

NL

Inverse correlation prices/penetration ( higher broadband penetration lower prices)

Other factors beyond price affect penetration (coverage, quality of service, income, education, PC penetration, etc.


The challenges ahead for an EU BB strategy

The challenges ahead for an EU BB strategy

• Move to a high speed internetMove to a high speed internet

• Open access and internet neutralityOpen access and internet neutrality

• Seamless access between fixed and mobileSeamless access between fixed and mobile

• Reaching 100% broadband Reaching 100% broadband

• Urban rural gap is gradually being overcome: the 1 extra Billion Euro will contribute to this effort.

• Take-up coverage gapTake-up coverage gap


Exchanges of good practiceB3 Project

Exchanges of good practiceB3 Project

• Only thematic network on broadband in “Regions for Only thematic network on broadband in “Regions for Economic Change”Economic Change”

• Regions leaning from each other: self-help

• Demand aggregation: Yorkshire UK December 2008

• State aid: (Cataloña, 12-13 March 2009)

• Synergies Synergies

• with Broadband Platform: www.broadband-europe.eu on to-do list for broadband projects:

• Help to non-partners (workshops, events and maintaining contacts for exchanging information and experience.

• Conference in Turin (1-2 April) joint conference with the Conference in Turin (1-2 April) joint conference with the EC.EC.

• Focus on B3Regions project results: demand aggregation, BB state aid issues and forthcoming work

• Information day for rural development authorities on €1 billion for BB.


The role of the European Broadband Portal

The role of the European Broadband Portal

http://www.broadband-europe.euhttp://www.broadband-europe.eu//

Portal aims:Portal aims:

• to contribute to the to contribute to the opening and transparency of the opening and transparency of the broadband market in Europebroadband market in Europe

• To act as To act as a virtual meeting pointa virtual meeting point between ICT suppliers between ICT suppliers and local and regional public authorities. and local and regional public authorities.

• one-stop-shop information platformone-stop-shop information platform on broadband: on broadband: facilitating the exchange of ideas, experiences and good facilitating the exchange of ideas, experiences and good practices. Includes the practices. Includes the publication of calls for tenderpublication of calls for tender for publicly financed broadband projects from all over for publicly financed broadband projects from all over Europe. Europe.


Commission Support to B3 RegionsCommission Support to B3 Regions

Main Contact: Main Contact: DG Information Society & Media –[email protected]

Involved in follow-up: DG Regional Policy – Unit for thematic coordination, innovation

• DG Informatics – Unit for European eGovernment Services (IDABC)• Joint Research Centre – Unit for Spatial data infrastructures • DG Enterprise & Industry – Unit ICT for Competitiveness and Innovation

Associated: REGIO country desks of regions involved

Ad Hoc Involvement: • DG Competition: Unit on State Aid• DG AGRI: Rural Development issues


What’s NextWhat’s Next

Policy:

• 12 -13 March: B3 regions: workshop on BB and State aid (Barcelona)

• 1-2 April: Joint B3Regions EC Conference (Turin)

• November 2009: i2010 event In Sweden

Further information

• i2010: http://europa.eu.int/information_society/eeurope/i2010/i2010/index_en.htm

• Digital Divide: http://europa.eu.int/information_society/eeurope/i2010/digital_divide/index_en.htm

• European Broadband Portal: http://www.broadband-europe.eu/ )

• B3Regions: http://www.b3regions.eu/

Documents

Ken Ducatel: : DG Information Society and Media, Unit: Lisbon Strategy and i2010Page (1) Broadband and social, economic and territorial cohesion: Challenges,