Explanatory Memorandum to COM(2011)657 - 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(2011)657 - Guidelines for trans European telecommunications networks. |
|---|---|
| source | COM(2011)657  |
| date | 19-10-2011 |
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 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 the arteries of a future 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 (2014-2020)[3], which proposes the creation of a Connecting Europe Facility to promote the completion of priority energy, transport and digital infrastructures with a single fund of EUR 40 billion, out of which EUR 9.2 billion are dedicated to digital networks and services.
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.
The guidelines identify in annex projects of common interest for the deployment of broadband networks and digital service infrastructures. 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 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.
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 market failures 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 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, the bottlenecks in terms of service deployment within interoperable frameworks are addressed through direct grant schemes, in certain cases with high co-funding rates 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. The EU added value is thus high.
Projects of common interest in the field of digital service infrastructures 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”).
Actions contributing to projects of common interest shall be eligible for EU financial support under the instruments available under the Regulation establishing the 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
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.
The Impact Assessment report discusses two options. The first, baseline option foresees no EU funding to be allocated to broadband other than, potentially, through the structural funds 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 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 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 which would complement the financing resources 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 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 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 Connecting Europe Facility [XX/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 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 networks is linked to the proposal for a Regulation establishing the Connecting Europe Facility (CEF) which will provide the legislative and the financial framework. An amount of € 9.2 billion[5] is allocated for telecommunications within the envelope of the CEF.