"Broadband Internet connections are a prerequisite for e-business, growth and jobs throughout the economy. Competition and open markets are certainly the best drivers of broadband in the European Union", stated Viviane Reding, Commissioner for Information Society and Media. "However, broadband connections must not be limited to the big cities. If the European Union and its 25 Member States make a clever use of all policy instruments, broadband for all Europeans is certainly not out of reach by 2010. But the time to act is now."
Competition Commissioner Neelie Kroes underlined the importance of European Union state aid rules in this respect: "Deployment of broadband may be hampered by market failures in rural and remote areas. In such cases, well-targeted state aid may therefore be appropriate, e.g. in the form of public/private partnerships to support the construction of open networks. But we have to make sure that state aid does not crowd out private initiative, nor distort competition to an extent contrary to the common interest."
"Where there are genuine market failures, the European Union Structural Funds play a vital role in stimulating investments in broadband infrastructure and services, boosting competitiveness and innovation and enabling all regions of Europe to participate fully in the knowledge economy", added Commissioner Danuta Hübner, Commissioner responsible for Regional Policy.
Mariann Fischer Boel, Commissioner for Agriculture and Rural Development, stressed: "Thanks to our new Rural Development policy, money is now being increasingly focused on creating new business opportunities in the countryside. There is a particularly strong concentration on broadband and information and communication technologies, where we already finance projects under our LEADER initiative, from the north of Scotland to the south of Spain. We now want to put them into the mainstream of our Rural Development programmes. The Rural Development fund is worth 70 billion euro between 2007-2013, with national funding on top. I urge Member States to tap the potential of broadband in their national Rural Development strategies."
Rapid progress in broadband take-up across Europe in the past three years can largely be ascribed to a combination of competing infrastructures and effective telecoms regulation. The broadband penetration rate at the end of 2005 is estimated at 13 percent of population or about 25 percent of households, reaching almost 60 million lines throughout the European Union. Despite fast growth, broadband has yet to reach some of the EU's less-developed areas because of low and uncertain returns on investment.
In 2005, broadband was available to about 60 percent of businesses and households in the remote and rural areas of the EU15, and to more than 90 percent in the urban areas, but the gap is greater in the new Member States. Broadband speeds are often lower in the countryside too, which makes it difficult to carry the large volumes of data needed for e-business, e-government, e-health and multimedia content applications. Rural broadband speeds average less than 512 kbps, whereas urban ones are rising and now often exceed 1 MBps, permitting the use of rich services.
EU telecoms rules are opening up regional and local markets to the most cost-efficient broadband suppliers. However, outside the metropolitan centres of the European Union, weak demand, due to population scarcity and distance, means lower returns on investment and can discourage commercial suppliers. Public/private partnerships are therefore needed to roll out the broadband technology mix that best reflects local needs and makes its benefits affordable. The EU's structural and rural development funds can help local authorities to build local services around broadband connections, while state aid policy ensures that public support from national funds does not distort competition. The Commission has already approved a number of broadband projects over the past year, finding in several cases that aid was compatible with state aid rules (United Kingdom, Spain, Austria, Ireland) or that there was no state aid involved (two decisions in France).
To accelerate the roll-out of advanced broadband communications in Europe, the Commission proposes two main strands of action:
- strengthening national broadband strategies, which should set clear targets and reflect regional needs, including a strategic approach to making use of EU and national funding in less-developed or rural areas;
- stepping up the exchange of best practices, in particular by the setting up of a Web site that will act as a single meeting point for local authorities and industry players to exchange information and gather experience. The Commission will also hold a large "Broadband for all" conference at the start of 2007 to showcase the benefits of broadband services to the rural communities.