2014 as regards the promotion of Internet connectivity in local communities - Main contents

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dossier	COM(2016)589 - Amendment of Regulations (EU) No 1316/2013 and (EU) No 283/2014 as regards the promotion of Internet connectivity in local ...
source	COM(2016)589
date	14-09-2016

1. CONTEXT OF THE PROPOSAL

• Reasons for and objectives of the proposal

The new Telecommunications package adopted today by the Commission includes a Communication setting out a European vision of Internet connectivity for citizens and business in the Digital Single Market, ¹ as well as a legislative proposal for a European Electronic Communications Code ² reviewing the regulatory framework for electronic communications. The Commission proposals set out the reforms needed to ensure availability and take-up of very high capacity networks that will enable the widespread use of products, services and applications in the Digital Single Market.

As the internet and digital connectivity transform private lives and professional practices inside and beyond the Union, there is a need to ensure that the general public is encouraged to seize the opportunities that this transformation offers.

For this reason, one of the Commission's strategic aims for the Union to be achieved by 2025 is for sites at which public services are provided, such as public administrations, libraries and hospitals to be equipped with Gigabit internet connections. Connecting these and other centres of community life, including outdoor spaces accessible to the general public, at speeds significantly above functional internet access, will enable citizens from all walks of life to experience the advantages of next generation connectivity while on the move, in places where being connected matters.

Amongst measures to support this objective, the new package will promote the deployment of local wireless access points through simplified planning procedures and lightened regulatory obligations, inter alia where such access is provided on a non-commercial basis or is ancillary to the provision of other public services.

The measure proposed here complements this effort through amendments to the legal framework for telecommunications in the Connecting Europe Facility, contained in Regulation (EU) No 1316/2013 ³ (hereafter CEF Regulation) and Regulation (EU) No 283/2014 ⁴ (hereafter Guidelines Regulation). These amendments encourage entities with a public mission such as public authorities and providers of public services to offer free local wireless connectivity in the centres of local public life (e.g. public administrations, libraries, health centres and outdoor public spaces). To this end, it provides financial incentives in favour of those entities who want to provide free, high capacity local wireless connectivity in public spaces within their jurisdiction or at their sites of service. Funding to local public authorities for access points in the centres of local public life, including outdoor spaces accessible to the general public, will be prioritised in the first phase of the intervention.

By stimulating the integration with existing public services, the intervention will promote citizens' interest in high capacity internet services and thereby make a significant contribution to both the take-up of broadband services and to public infrastructure development. Free local wireless connectivity made accessible in busy places where many people gather and await the next step on their daily agenda can provide significant added value by allowing idle and transit time to be converted into productive, relaxing or more informed experiences. Moreover, such local wireless access points can provide increased granularity of coverage in hard-to-reach places or where the sheer number of users would otherwise greatly detract from the experience of wireless connectivity. By allowing users to remain connected while out and about, they also reinforce mobility, flexibility and interest in using the services offered by entities with a public mission, and can give improved control over personal time budgets. At the same time, the limited reach of any single access point guarantees that this public offer would not challenge commercial offers, but could play an important role in fostering the use of broadband and promote digital literacy. This will in turn promote the interest of users to take up commercial residential or mobile broadband offers. The proposed intervention complements the new legislative concept of universal service in the proposal for a European Electronic Communications Code, whereby every EU citizen shall have the right to be connected: the right to a functional internet connection, at least at a fixed location, that is affordable and allows full engagement with the digital economy and society.

The measure proposed provides for a simple financing mechanism for the installation of local wireless access points. The intervention is designed to achieve maximum short-term impact by fostering the interest of citizens for internet access services and to facilitate the use of public digital services, including access to digital service infrastructures. The expectation that the interest generated will provide a basis for the continued operation and possible replacement of the access points without further financial assistance under the regulations is consistent with the objective of phasing out such assistance wherever possible and encouraging reliance on alternative financing mechanisms.

To ensure the targeted nature of the intervention and to realise maximum public benefit, funding will be limited to situations where no freely accessible public or private access points delivering very high-speed broadband exist. As the amount of Union financial assistance to be awarded for individual actions will fall below the threshold for low value grants of EUR 60,000 provided for in the Financial Regulation ⁵ , no appreciable effect of the intervention on competition is expected. ⁶ Moreover, funding shall be awarded in a geographically balanced manner that contributes to the economic, social and territorial cohesion in the Union by taking particular account of the needs of local communities. ⁷ Through the joint application of these criteria, the intervention proposed is consistent with the framework of open and competitive markets underpinning the operation of trans-European networks.

In addition to stimulating demand in high-speed broadband connectivity and encouraging widespread take-up at community level, the intervention will also have several positive knock-on effects ranging from enhanced access to e-government and participation in democratic life, including for demographic groups otherwise facing difficulty in accessing connectivity (such as refugees and low income groups), to additional infrastructure for emergency and crisis communications and public service announcements. To ensure that local communities with limited resources can also experience these benefits of participation in the Digital Single Market, support under this measure should be available for up to 100 % of the eligible costs, without prejudice to the principle of co-financing. Potential beneficiaries could involve members of the local community in implementing actions funded by the proposed measure in order to determine the centres of public life where the installation of freely accessible wireless access points would provide the greatest added value for the community.

Given its flexible and focussed nature relative to the support for broadband networks under the telecommunications sectoral envelope for the implementation of the CEF, the intervention should be recognised as a separate project of common interest with associated actions under the CEF Regulation and a dedicated budget, the details of which should be provided for under the Guidelines Regulation. Given the limited volume of financial assistance awarded to each, but the significant total number of beneficiaries, it is important to ensure that administrative procedures are streamlined to enable lean and swift decision-making. To this end, Member States should be enabled under the CEF Regulation to endorse categories of proposals under this intervention, rather than having to give their agreement on lists of individual beneficiaries. By implementing this amendment in a horizontal manner to the benefit of other projects of common interest, the proposal also responds to Member States' calls for more efficient means of implementing actions in the field of digital services infrastructures.

In order to ensure that the measure can respond to a wide variety of situations and can deliver concrete results as quickly as possible, it is essential to not unnecessarily limit the available forms of financial assistance. An important degree of flexibility in this context can be preserved by enabling implementation to benefit from the greatest possible range of forms of assistance appropriate for the intervention. To this end, and in view of ongoing negotiations on a revision of the Financial Regulation, the text of the CEF Regulation should be amended to clarify that all actions contributing to projects of common interest, including the present intervention, are generally eligible for support through the forms of financial assistance currently and prospectively available under the Financial Regulation.

On the other hand, it is proposed, for the same reasons, to specify the forms of financial assistance available for the intervention in a mutually consistent manner in the CEF Regulation and the Guidelines Regulation. Grants are likely to be the predominant form of financial assistance appropriate to achieving the objective of promoting free local wireless connectivity in local communities, but other forms of financial assistance should not be excluded from the outset, except for financial instruments. The exclusion of financial instruments is due to their relatively high administrative burden and the associated time lags in implementation, which do not provide for sufficient alignment with the characteristics of the actions envisaged.

To ensure speed and efficiency, the implementation of this intervention will be carried out through streamlined administrative procedures using standardised documentation (such as vouchers) and on-line tools for handling applications as well as for subsequent monitoring and auditing of the local wireless access points installed.

It is expected that the measure proposed, promoted through the EU network of Broadband Competence Offices, ⁸ will raise awareness among local authorities and citizens of the new Commission priorities for the Gigabit society as well as provide a high degree of visibility and trust in the capacity of the EU to deliver connectivity and access to digital services across the European continent. Recognisability of the actions funded by the proposed measure will be guaranteed by a specific visual identity developed by the Commission that will be made available to beneficiaries for implementation, thus ensuring brand recognition.

• Consistency with existing provisions on the policy area

Currently, the legal framework for telecommunications in the Connecting Europe Facility provides for financial support in the area of telecommunications to digital service infrastructures (in the form of grants and/or procurement) and to broadband networks (in the form of financial instruments).

Regarding intervention in support of broadband, 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, the Guidelines Regulation provides for a limited intervention. CEF finances a small contribution to the setting up of financial instruments at Union level, in particular in cooperation with the European Investment Bank to facilitate the efficient use of other public as well as private resources. It aims at the deployment of innovative broadband projects, based on state-of-the-art technology and with the potential for replicability, thus achieving its objectives both directly and through demonstration effect.

The proposed measure complements the end user-centred elements of the proposal for a European Electronic Communications Code. The support for the installation of local wireless access points in centres of local public life is complementary to other actions in the CEF telecommunications sector as well as to other sources of financial support, such as the European Structural and Investment Fund, supporting the rollout of broadband networks. As such actions are currently neither covered by the CEF nor by the Guidelines Regulation, it is proposed to amend those regulations accordingly.

2. LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

• Legal basis

The proposal is based on Article 172 TFEU, which covers EU intervention supporting the establishment and development of trans-European networks in the areas of transport, telecommunications and energy infrastructures. In line with Article 170(1) TFEU, the initiative seeks to ensure that local communities can derive the full benefit from the Digital Single Market by setting-up an area without internal frontiers through the deployment of such networks.

• Subsidiarity and proportionality

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.

By taking particular account of the needs of local communities in the wider context of the Digital Single Market Strategy, the proposal contributes to the achievement of an internal market for electronic communications and enables the participation of communities therein. As the creation of an area covering the entire EU with high quality wireless connectivity cannot be sufficiently attained by Member State action, the proposal is consistent with the principle of subsidiarity of Article 5 TEU. It is expected that the intervention be promoted inter alia by the EU network of Broadband Competence Offices, which should help to ensure that the needs of local communities can be addressed efficiently and that administrative burdens are kept to a minimum.

Current initiatives related to free local wireless connectivity are fragmented, leading to inefficiencies. There is notably no overarching strategy to promote access to free wireless connectivity throughout the Union to further the participation of local communities in the Digital Single Market. As individual deployments of local wireless access points are territorially limited even within local communities, coordination of such effort is even more important to ensure that deployment promotes the common interest in EU-wide connectivity in a coherent manner. Coherence in the pan-European deployment of free wireless connectivity solutions will allow both to optimise the costs of the intervention (in particular by lowering the costs of administering small grants because of the effects of scale, but also by bringing down equipment prices) and ensure greater equality of access, thereby adding to economic, social and territorial cohesion inside the Union. The measure proposed is designed to add further European value by ensuring that the infrastructures deployed also enable access via digital service infrastructures to trans-European interoperable services of common interest like Europeana, safer Internet service infrastructures and interoperable cross-border e-health services.

The scope of the proposed intervention is limited to the provision of connectivity in centres of public life and outdoor spaces accessible to the public through access points that are inherently limited in coverage, and individual projects will be of small size. The intervention thus remains proportionate to the objective of enabling local communities to participate in the wireless dimension of the Digital Single Market without prejudice to commercial offers. At the same time, the measure is expected to have positive spill-over effects on general participation in connectivity offers through commercially provided access services. The effectiveness of the intervention is expected to be further strengthened by the ease of replicability and possible demonstrator effects of successful use cases.

The on-line administration of the measure proposed coupled inter alia with support from the network of domestic Broadband Competence Offices will ensure that the administrative burden incurred for the implementation of and participation in the initiative is kept to a minimum.

3. RESULTS OF EX-POST EVALUATIONS, STAKEHOLDER CONSULTATIONS AND IMPACT ASSESSMENTS

As this initiative is complementary to the new Telecommunications package, including the Communication setting out a European vision of Internet connectivity for citizens and business in the Digital Single Market and the legislative proposal reviewing the regulatory framework for electronic communications, it draws heavily on the stakeholder input and the extensive analysis carried out in the evaluation and impact assessment supporting these proposals and the staff working documents accompanying the communication. The most relevant points for the proposed measure are summarised below. Overall, the analysis demonstrates that while legislative and regulatory actions can remove barriers, enhance competitive incentives, provide greater predictability for investors and lower costs for network deployment, there is an important role for public funding to achieve Europe's long- term connectivity objectives.

The recent report ⁹ summarising the outcome of the public consultation carried out by the Commission for the review of the regulatory framework for electronic communications showed that many public authorities and private respondents supported the deployment of
Wi-Fi networks in public premises, while seeking an appropriate regulatory environment for issues like access provider liability and exposure to electromagnetic fields (EMF). Operators stressed that any public support should be technologically neutral, while emphasizing that roll-out could also be facilitated via various forms of public-private partnerships. These findings are in line with the ex-post evaluation of the current regime, which accompanies the proposal for the review of the regulatory framework.

The impact assessment carried out for the review of the regulatory framework builds on those considerations expressed by stakeholders and proposes to introduce provisions on the deployment of small cells. These provisions aim to reduce the costs of deploying very dense networks and to enhance access to local wireless connectivity in order to meet the exponential demand for ubiquitous connectivity. The proposed measure, which complements the preferred option for the development of the regulatory framework in the area of spectrum management, will help to foster the provision of free local wireless connectivity and thereby contribute to making the European vision of Internet connectivity for citizens and business in the Digital Single Market a reality.

4. BUDGETARY IMPLICATIONS

Appropriations required by this proposal are to be fully financed within the Multiannual Financial Framework 2014-2020. EUR 70 million are to be reallocated within the programmed amounts for the CEF telecommunications sector 2017-2019 and EUR 50 million will be transferred to the financial envelope for the telecommunications sector through an amendment of Article 5(1) of the CEF Regulation. For reasons of consistency, this increase is also reflected in the proposal for an amendment of the legal framework for the European Fund for Strategic Investments ¹⁰ , as laid down in Regulation (EU) No 2015/1017 ¹¹ .