Connectivity Towards a European Gigabit Society

Conference on Digital Infrastructure at Harz

University Wernigerode ,

16 March 2017

Dr. Robert Henkel

Senior Policy Officer

European Commission

DG CONNECT

Investment in High-Capacity Networks Unit

What is the DSM?

• The Digital Single Market means an area where the free

movement of goods, persons, services and capital is ensured

and where citizens and businesses can therefore seamlessly

access and exercise online activities under conditions of fair

competition, irrespective of their nationality or place of

residence.

• ….. and it is not going to happen without high speed networks

Digital Single Market is based on three pillars

Digital Single Market

Better access for consumers

and businesses to digital goods and services

across Europe

Creating the right

conditions for digital

networks and services to

flourish

Maximising the growth potential of the Digital Economy

Pillar 2

DIGITAL

ENVIRONMENT

Designing rules which match the pace of technology & support infrastructure development.

Shaping the right environment for digital networks and services to flourish

• Review the audiovisual media framework

• Review online platforms, intermediaries

• Review sharing economy

• An ambitious overhaul of EU telecoms rules

• Reinforce trust and security in digital services

Digital Single Market Strategy Deliverables

Connectivity Context

What is the situation today?

The internet has transformed our society and our economy and made people's lives easier

Europeans use the internet to

buy products and services

do their banking

read & watch the news

of European enterprises use cloud computing

of European SMEs sell online

Connectivity Context

EU telecoms rules have brought basic broadband to all Europeans at low prices

Price for 12-30 Mbps broadband has dropped by 57% since 2007

At the same time, internet traffic continues to grow at an unprecedented rate

Global mobile internet & internet traffic 2015- 2020

exabytes

Connectivity Context

Fixed internet connection

• In 2015, 71% of European households had access to a fast fixed internet connection

• But this goes down to 28% for households in rural areas

4G mobile coverage

• In 2015, the EU average of 4G mobile coverage is 86%

• But this goes down to 36% for households in rural areas

This is not enough to address the growing need for speed, quality and reliability of the infrastructure EU action is needed

The Public Consultation on Needs for Internet Speed and Quality Beyond 2020

ran until end November

2015

•Current needs

•Future needs

•Policy measures to fulfil those needs

About

•The design and implementation of our broadband roll-out related tools

Will contribute to

Needs for Internet Speed and Quality Beyond 2020

•Around 1550 contributions, including 15% by organisations

•Many position papers State of play

•Meetings with representatives of e.g. automotive, video games, R&I, e-commerce, SMEs, etc.

Sector specific approach

Public Consultation (Sept.-Dec. 2016)

Connectivity The Commission's proposal

3 strategic connectivity objectives for 2025

1. A new Electronic Communications Code to help build future networks

2. WiFi4EU

3. An action plan for 5G

1. All main socio-economic drivers should have access to extremely high - gigabit – connectivity

2. All European households, rural or urban, should have access to connectivity offering a download speed of at least 100 Mbps

3. All urban areas and major roads and railways should have uninterrupted 5G coverage and 5G should be commercially available in at least one major city in each EU Member State by 2020

To be supported by 3 main new measures

Connectivity Electronic Communications Code

• Market regulation only where end-user interest requires it and where operators' commercial arrangements don't deliver competitive outcomes

• Reduced regulation where rival operators co-invest in very high-capacity networks & easier for smaller players to be part of investment projects

• Making investment case more predictable for "first movers" who take the risk to invest in less profitable areas, such as rural areas

• Easier to switch suppliers when consumers are signed up to bundles

• Ensure vulnerable groups (like the elderly or disable people) have the right to affordable internet contracts

Electronic Communications Code

1 Modernisation of current telecoms rules to drive investment

Increased competition and predictability for investments:

Stronger consumer protection

Connectivity Electronic Communications Code

• Long licence durations, coupled with more stringent requirements to use spectrum effectively and efficiently.

• Coordination of basic parameters such as the timing of assignments to ensure timely release of spectrum to the EU market

• More converged spectrum policies across the EU

• Selected rules extended to new online players which offer equivalent services to traditional operators, to ensure security requirements apply.

Possibility for users to reach the EU emergency number 112 via such online services in the future with now additional costs More

A safer online environment for users and fairer rules for all players:

Better use of radio-frequencies

Connectivity WiFi4EU

WiFi4EU

2 Free Wi-Fi for Europeans in public spaces

120 million of EU investment for interested local authorities to offer free Wi-Fi in public spaces

At least 6000 to 8000 local communities

49-50 million connections per day

How will it work?

• The EU to fund the equipment & installation with vouchers; public bodies to pay monthly subscription & maintenance

• Local communities need to commit to providing very high speed internet via WIFI4EU, and that they are not competing with a similar, existing private or public Wi-Fi offer

Connectivity WiFi4EU

Who will benefit?

WIFI4EU access points will reach both local residents and visitors across the EU

All Europeans

Public administrations, hospitals, libraries and other bodies with a public mission

They can take advantage of the access points to develop & promote their own digital services, such as e-government, e-health or e-tourism

15

Vouchers

•Cover infrastructure costs

Communities

•Cover payments to the operator

Regulatory framework

•Removes legal obstacles to deployment and share WiFi access by local communities.

Fast deployment

Agile audit

Real-monitoring

Shared involvement in the project increases the potential for the success story

Connectivity 5G Action Plan

Action plan for 5G

3 Common roadmap for a coordinated deployment of 5G in 2020

Common EU calendar for a coordinated 5G commercial launch in 2020

Joint work with Member States and industry stakeholders to:

Identify and allocate spectrum bands for 5G

Organise pan-European 5G trials as of 2018

Promote common global 5G standards & encourage the adoption of national 5G deployment roadmaps across EU Member States

National

5G Roadmaps

2017 2018 2019 2020 2021 2022 2023 2024

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2025

5G Timeline

Spectrum allocation & assignment

Best practice + fibre planning

to boost "small cell" deployment

Cross-border pre-commercial

trials

5G Standardisation

Venture Capital support to innovative start-up in 5G key use

sectors

…

Continued substantial investments

in fibre infrastructure and "small cells"

…

17

Reduce costs of broadband rollout by 80% and make it easier

Better use of existing infrastructure and more transparency, incl. cross-utility

Improved coordination of civil engineering

Simplify permit granting process

Buildings ready for access to high-speed internet

BB Cost Reduction: objectives

Regulation Cost reduction

Where is the money?

Structural funds

•European Regional Development Fund (EFRD)

•European Agricultural Fund for Rural Development (EAFRD)

•Funds for TO2 "Enhancing access to, and use and quality of, ICT"

•€ 6 bln for broadband

•Years 2014-2020

Connecting Europe Facility - Telecoms

•The Connecting Europe Facility (CEF) supports trans- European networks and infrastructures in the sectors of transport, telecommunications and energy

•€150 m for broadband

European Fund for Strategic Investments

(EFSI)

•An initiative launched to help overcome the current investment gap in the EU by mobilising private financing for strategic investments

•??? for broadband

Financial instruments and the Structural Funds…

F.I. and structural funds: CEF credit

enhancement

30% 30%

Structural funds

20% 20% National co-funding

15% 15% CEF (credit enhancement)

35% 35% Senior debt (intermediary and commercial banks)

60% 60% Structural funds (max. co-funding varies by region category)

40% 40%

National co-funding

Traditional grant scheme

Financial Instruments Financing

21

GRANTS FINANCIAL INSTRUMENTS

• Success factor:

• Excellence

• Policy relevance

• Regional importance

• Revenues optional

• Repayment not expected

• Cooperation encourged – consortia welcome

• Success factor:

• Profitability

• Sustanability

• Revenues mandatory

• Repayment is a must

• Cooperation must be formalised (there must be a legal entity)

22

Boost investment in strategic projects and

access to finance via the European Fund for

Strategic Investments (EFSI) within EIB/EIF

Cooperation with National Promotional Banks

and the EIB

1. MOBILISING FINANCE FOR INVESTMENT

European Investment Project Portal

European Investment Advisory Hub:

technical assistance

2. MAKING FINANCE REACH THE REAL ECONOMY

Predictability and quality of regulation

Removing non-financial, regulatory barriers

in key sectors within EU Single Market

Structural reforms at national level

3. IMPROVED INVESTMENT ENVIRONMENT

EU Investment Plan: 3 pillars

Investment Plan Financing

EU Financing EFSI

Corporates of all sizes

Utilities

Public sector entities (non-sovereign)

SMEs (below 250 employees) and/or MidCaps (up to 3,000 employees)

National Promotional Banks or commercial banks for intermediation

Dedicated investment platforms possible

Eligible partners

25

Contributions by MS / National Promotional Banks

Member State NPB Contribution announced (up to)

Germany KfW € 8,000m

Spain ICO € 1,500m

France CDC € 8,000m

Italy CDP € 8,000m

Luxembourg SNCI € 80m

Poland BGK/PIR € 8,000m

Slovakia SIH/SZRB € 400m

Bulgaria BDB € 100m

United Kingdom € 8,500m

TOTAL € 42,580m

European Investment Advisory Hub (EIAH)

• A single access point to a wide range of advisory services.

• Strengthened advisory support throughout the project cycle: project identification, preparation and implementation incl. the use of financial instruments, advice on structuring and implementing public-private partnerships and facilitation of access to finance.

• A cooperation platform – a peer-to-peer exchange and sharing of know-how regarding advisory services.

• EUR 20 m annual budget in addition to existing TA programs managed by the EIB (Jaspers, fi-compass, Innovfin…)

The Hub seeks to improve project quality and be the reference point for project advisory support in Europe.

EFSI EU Financing

European Investment Project Portal

• What can the European Investment Project Portal (EIPP) do for you?

• Registration on the EIPP will boost the visibility of your project

• Opportunity to find investors from all over the world looking for investment opportunities in Europe

• Access to a large network of investors, consultants and advisory services that can help you to structure it and finance it

• Is my project eligible for the European Investment Project Portal?

• In order to qualify, projects must be:

• Worth at least EUR 10 million

• Expected to start within three years of their submission to EIPP

• Promoted by a public or private legal entity established in an EU Member State

• Compatible with applicable EU and national laws

Publication of a project can be denied on legal, reputational or other grounds.

Broadband Competence

Office (BCO)

European Commission

AGRI CONNECT REGIO COMP

EU-level T.A.

Broadband Project Promoters

ERDF EAFRD

EIB World Bank

EFSI / CEF

National Promotional Banks

(KfW, CDC, CDP, etc.)

Commercial Banks

GRANTS FINANCIAL

INSTRUMENTS

Implementing body

Managing authority

Managing authority

Implementing body

Member State

OP-level T.A.

Support Facility (coordination of BCO network)

European Investment

Advisory Hub

(EIAH)

Connected Communities

Initiatives

Network of BCOs

Broadband_Europe as an aggregation point for broadband

stakeholders in the EU

Connecting Communities

Cost Reduction

Connecting Europe Facility

Investment Guide

Actions

Stakeholders Enablers

Topics

European Commission Digital Agenda

European Investment Bank

World Bank

BE

http://ec.europa.eu/digital-agenda/en/high-speed-broadband

An important momentum….

• Regultory developments (cost reduction Directive, framework review)

• CEF ready for service

• ESIFs almost finalised

• New tools (State aid framwork simplified, Broadband Europe & BB investment guide) to inform, share and advise

• DSM among the new Commission's top priorities + €315 billion package in preparation including a strong digitial component

Thank you

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