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Kroes to launch digital action plan

Commission says single market is ‘seriously incomplete’.

The European Commission will on 19 May adopt a ten-year ‘digital agenda’ aimed at unleashing the economic potential of its information and communication technologies (ICT) sector. The agenda, which has mainly been drawn up by Neelie Kroes, the European commissioner for the digital agenda, will cover investment, the removal of regulatory barriers, and legislation to improve consumers’ confidence in online shopping. But telecoms companies differ sharply over its ability to boost competition on the broadband market.

The draft of the paper, seen by European Voice, describes the EU’s online single market as “seriously incomplete”. It outlines legislative plans to improve “the governance and transparency” of online copyright management by 2011, to create a framework for the digitisation of orphan works (books in copyright but with untraceable rights holders), and to introduce “pan-European licences” for online use of creative content.

The Commission envisages an EU-wide “online dispute resolution system”, EU “trust marks” for internet retailers, and revised legislation on e-signatures to give consumers more confidence to shop on websites based in other member states. There are also plans for increasing research and development spending on ICT, developing e-health applications, and tackling cybercrime.

The Commission warns in the paper that Europe is “lagging behind” in rolling out next generation broadband (that is, in replacing copper networks with fibre). It plans to “reinforce” funding for high-speed broadband from the EU budget, including through “credit enhancement” schemes linked to the European Investment Bank. The Commission will also issue a recommendation (expected in June) clarifying the financial conditions that telecoms companies can impose on rival firms that want to share their networks. Operators have long complained that a lack of clarity in this area has prevented them from installing fibre networks.

“The roll-out and development of high-speed internet…could stimulate the creation of one million jobs, and spur €850 billion of economic activity,” the paper says. The digital agenda is one of the “flagship initiatives” included in the Europe 2020 strategy for growth and jobs that the Commission unveiled in March.

Coverage concerns

Erzsebet Fitori, senior manager for regulatory affairs at the European Competitive Telecommunications Association, is concerned, however, that the paper abandons a Europe 2020 target that at least 50% of households should be subscribers to internet connections above 100Mbps by 2020. The draft says that 50% of households should be able to access these networks – a target linked to coverage, rather than to the level of subscription. “This ignores the main problem of lack of competition leading to high price services,” she said.

Fitori is also concerned at mentions of “co-investment” and “risk-sharing” agreements between telecoms companies to spur the roll-out of fibre networks. Agreements of that type, granting companies flexibility in setting the price of access to their networks, can allow larger firms to keep competitors out of the market, she says. “[The recommendation] should not give any room to dominant operators to game the system,” she said.

The European Telecommunications Network Operators’ Association (ETNO), which represents larger telecoms firms, has argued that flexibility in pricing access to networks (including the ability to offer a lower price to companies willing to sign a longer-term access contract) is needed if companies are to take the risk of investing in new fibre networks.

“Next-generation networks require new access rules that take into account the high investment risks involved,” Michael Bartholomew, the director of ETNO, said.