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European Commission

Neelie Kroes

Vice-President of the European Commission responsible for the Digital Agenda

A broadband boost for the UK and Europe

"Perspectives for Mobile and Broadband in the UK 2020" EIF-DPA Joint Event /London

13 March 2013

Today, ICT is already worth half of our productivity growth. And Europe's digital economy is big and getting bigger: larger than the GDP of Belgium, it's growing faster than the GDP of China. Not just a platform to offer existing products and services - but a chance to create new ones: tailored, interactive, instant.

For businesses in every sector, from broadcasting to healthcare.

And for businesses of every size. For small and medium-sized businesses, too, the internet is digital oxygen: helping them grow and export twice as much.

No wonder broadband boosts growth. 10 percentage points extra penetration means 1% to 1.5% more GDP growth. And we need that right now. Let's give our businesses and our economy what they need.

Here in the UK, according to our latest data, 58% of British households have coverage by fast next generation networks. And internet "on the move" is spreading too, with 62 mobile broadband SIMs for every hundred Britons.

That's better than the EU average. Yet still, that leaves a lot of people without. And in particular in rural areas, four in five have no fast fixed coverage at all.

The situation is getting better. But there's still a long way to go to get every European digital, and avoid a troubling digital divide. Still a long way to go to guarantee the broadband boost for business. And still a long way to keep up with international competitors like the USA, South Korea and China - all investing heavily, and all overtaking Europe fast.

Europe needs broadband investment. So it's a shame EU leaders couldn't agree on our proposals for a digital Connecting Europe Facility; one that would have connected 45 million households to broadband, and paid the taxpayer back with interest. But the broadband objective is no less important: we must use all available tools. Here are a few examples.

First, despite those decisions on the EU Budget, there are other avenues available to us. At EU level, we can use other sources, like the EU's Structural and Investment Funds. Making more broadband investment possible, attracting economies of scale and cutting the risk for a wider range of investors.

And funding can also be national. Of course it must fit our state aids rules - to ensure a level playing field in our competitive single market.

But our new state aids framework leaves significant room for national broadband support. Ensuring the right mix between public and private investment; a pro-competitive environment; and well-designed public interventions targeted at market failures.

BDUK is a very welcome initiative and it's part of a trend across Europe. Last year we approved over 5 billion euros of state aid for broadband; a threefold increase.

What is more, we can make the cost of broadband roll-out significantly cheaper. We can - and should - save tens of billions of euros by using existing infrastructure better, better coordinating civil works, streamlining administration and making buildings broadband-ready. I know the UK has taken steps to tackle barriers, like planning rules, which can lead to red tape and delay for broadband. By scaling such measures up, we could encourage investment and bring the broadband boost to businesses and citizens across Europe.

Second, recently mobile broadband has emerged as the new digital driving force, so people can connect on the move, and access the content they want when they want it. But mobile broadband needs spectrum.

Spectrum is an area calling for urgent action. Our policy cannot be uncoordinated and haphazard. We can't be slow and unambitious. We can't stick to historical powers when we should be looking to future opportunities.

Otherwise we won't provide fast, reliable connections across Europe. Device makers will continue to ignore our continent when designing the spectrum features of their latest gadget. European content providers will find themselves stranded on the wrong networks. And we will continue to fall behind international partners, already surging ahead with 4G.

Third, we need to use our Single Market. We've spent decades bringing down real-world barriers so we can benefit from the Single Market boost; let's not put those borders back online.

As David Cameron put it recently, "It is nonsense that people shopping online in some parts of Europe are unable to access the best deals because of where they live." I agree. And it's a nonsense for businesses too: because even when they can get online, they face obstacles when trying to operate across borders; from incompatible copyright rules, to different cloud standards.

That's cutting the opportunities for those who want to buy content and services - and those who want to sell them. Because still today, those producing web content find it a costly headache to spread their products and services across Europe. I know that many of those trying to create innovative new services face those barriers every day: including those here in the UK.

But my dream goes further than that. Because the Single Market isn't just about content - it's also about the networks and services that support it. Sometimes the only reminder you've crossed an internal EU border is the mobile in your pocket: I know many are fed up with that.

Imagine if we gave telecoms operators and investors more economies of scale, so they could plan across borders, and start to innovate and develop business models that are large scale, converged and forward looking. All that would mean more broadband and more choice for more Europeans. And an economic boost too: the jackpot for completing the eCommunications Single Market could be worth 0.8% of EU GDP.

Today, all Europe's businesses could do with the broadband boost: whatever their size, whatever their sector. But it's not just about businesses: the people of Europe queue outside the store for the latest gadgets, they march on the streets about the laws that should apply online. And yet none of these matter without fast broadband connections. Let's make it easier for them to get them.

Let's build the kind of market where everyone has access to online opportunities. Let's help all content creators prosper and be able to market their ideas to an online Single Market of 500 million. And let's help our economy emerge stronger from the crisis.

Thank you.