EU promises to act on high-speed Internet networks

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Under heavy pressure from the industry and the European Parliament, the Commission will “soon” come out with a proposal to spur EU investment in Next Generation Networks (NGNs), Information Society Commissioner Viviane Reding told EURACTIV.

The telecoms and digital industries have in many cases complained about the lack of reference to NGNs in the Commission’s proposals for a comprehensive review of the EU telecoms sector. 

Their argument is that the Commission keeps focusing on regulatory measures without helping the technological and infrastructure developments which will be needed in the coming years (see EURACTIV 09/05/08). The European Parliament, which is about to vote upon the review, echoed the industry’s positions (see EURACTIV 25/04/08).

As NGNs are not mentioned in the telecoms review, industry is instead looking at alternative uses of the new networks, such as high-definition TV over the Internet and a new range of interactive and user-generated services, according to a recent document published by EICTA, the European digital industry association.

In response, the Commission said it will issue a recommendation on access to the new networks and their link to individual households, the so-called ‘last mile’ – Next Generation Access (NGA). 

But who will pay for the networks and how they will be deployed remains uncertain. “We are still working on this, we are consulting, analysing the market and checking the different possibilities,” Commissioner Reding told EURACTIV. “What is clear is that we will come out with a proposal to give legal certainty for the investments,” Reding said. “Industry which invests needs to know over several years what kind of regulation will influence their decisions,” she explained.

According to Reding, these indications were not part of the telecoms review because “it will [be] some time before the reform is implemented into national law and we need to have something in our hands now”. 

Her spokesperson Martin Selmayr added: “It is not true that the reform does not do anything for investment. It includes competition and a single market, the best recipe for investment,” he said.

Although details of the Commission’s guidelines are not yet public, Selmayr indicated that models to follow could come from the most advanced countries in the sector, such as Japan and South Korea, but also from some EU countries, like “Denmark, the Netherlands and also Slovakia”.

Positions

Information Society Commissioner Viviane Reding told EURACTIV after a conference yesterday (3 June) in Brussels: "We want to fix the rules of the game and this is what is going to be published soon for Next Generation Access."

The European Regulators Group (ERG), which brings together national authorities, announced yesterday (3 June) that it is launching "a public consultation on the possible future regulatory approach" on NGNs.

The incumbent telecoms operators, represented by ETNO, asked for access to ducts and infrastructure competition to spur investments in networks. Geographical segmentation is also at the top of their agenda.

As for the 'last mile', they suggest the direct connection of the networks to single households and not to a building, a practice referred to as 'fibre to the home' (FTTH) as opposed to 'fibre to the building' (FTTB) or 'fibre to the node' (FTTN).

ECTA, representing new entrant operators in the telecoms sector, opposes the idea of parallel infrastructure deployment and the concept of geographical segmentation. The European Competitive Telecommunications Association instead supports functional separation between network and services management.

EICTA, on behalf of the European digital industry, supports the FTTH approach, which is more expensive but will allow "a virtually unlimited bandwidth" for any Internet-based service and application.

Background

Optical fibre backbones are considered the future of telecommunications infrastructure because they allow for faster and wider transmission of data. They are at the core of so-called Next Generation Networks (NGNs).

Fibre networks have been deployed slowly across the EU so far, covering a marginal share of national markets. NGNs today account for less than a million subscribers in the EU, in comparison with between 1.5 and three million in the US, 2.8 million in South Korea and eight million in Japan.

Investment in Europe is currently low. To upgrade EU networks, at least 300 billion euros of investment will be necessary, according to estimates by McKinsey, a consulting company.

Timeline

  • 10 June 2008: The Representation of the Free State of Bavaria organises a conference on NGA.
  • 25 June 2008: ECTA organises a conference in Brussels on policies and strategies to boost fibre penetration in Europe.
  • The Commission will soon publish a recommendation on NGNs and NGAs.

Further Reading

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