Speech - Building a connected continent

European Commission

Neelie Kroes

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

Building a connected continent

European Internet Foundation Breakfast Debate /Brussels

24 September 2013

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I am delighted to be here with you. And to present our plans for a connected continent, adopted just a fortnight ago.

We all know the climate we live in. The economy is declining. People face unemployment and uncertainty. We are not ensuring a strong society for our children to grow into.

This is no time to be putting barriers in the way of opportunity. Quite the opposite: we need to find future sources of growth and grab them with both hands. They're our life raft out of the crisis.

ICT is definitely one of those opportunities. I'm very clear about that. Soon, broadband infrastructure could support everything we do: from flexible business services, to smarter living environments, to better healthcare. As such it could help fix many of Europe's current challenges: supporting competitiveness, jobs, and better public services.

The ICT sector represents some of the biggest companies in the world: and Europe needs to play its part. But we are not doing so.

Europe has the tools, technology, and talent to succeed in ICT. And once, just twenty years ago, we did lead the world in that sector. So why are we not now?

This isn't just about one sector. It's not about telecoms, it's not about the wider digital sector - though those are big. In fact it's every citizen and every business.

It matters for our citizens, glued to their smartphones, craving the latest online tools.

It matters for the wide and ever-growing range of sectors that depend on the internet to innovate. Sectors from transport to television.

And it matters for every business that needs to stay in touch to survive - not just through phone calls, but videoconferencing, cloud computing, 3D printing. You name it.

Today, connectivity underpins competitiveness. In every sector.

So when, when it's so important, is Europe so underperforming?

Why, even where we were once strong, are we falling behind? Just look at Nokia.

Why are we letting Europeans down while the world races ahead? We offer our citizens 8 times less fibre broadband and 15 times less 4G than our major competitors.

And why, when it comes to devices, services, or innovations like the cloud, do we end up relying entirely on imports from Korea and California? With all the consequences that has for competitiveness - and privacy.

We won't fix any of these problems without a thriving digital sector, underpinned by fast broadband networks. Without the infrastructure to compete, we aren't going anywhere - in any sector.

It is time to act; in fact it is already overdue. Current trends are unsustainable for the sector, and unsustainable for our whole economy.

So much of our economy has benefited from the single market boost. Now the telecoms sector - central to competitiveness - needs it too.

That won't come from a sector that faces barriers at every turn, confined to tiny protected markets. It won't come about from a sector that seeks to block new ideas or maintain scarcity, frustrating the economy's need for connectivity and innovation. It won't come from looking backwards to yesterday's services and yesterday's cash cows - like sky-high roaming margins.

No. It needs a telecoms sector that is strong, dynamic and innovative. One that can think big and reach a globally competitive scale. One that can invest and innovate, to offer plentiful, open broadband for all. One that can look forward to the digital opportunities of the future: new innovative services people will want to pay for, with a range of services to fit a range of needs.

So the Commission is putting forward targeted changes to telecoms regulations. To give those networks a single market boost.

For example we will make it easier for operators to work across borders. Working in multiple countries without needing separate formal authorisations in each. The right to serve people from across Europe without discrimination. More consistent access to fixed networks for more consistent cross-border services.

Plus new rules on spectrum, to make it easier to plan and bid across countries. Meaning Europeans get faster, better wireless connections - from fast 4G to urban WiFi.

We will help national regulators coordinate more strategically - with a full-time, professional chair for BEREC.

Better consumer rights to ensure you get the internet deal you pay for, with plain-language contracts, easier to switch operators in practice, and an end to practices like operators keeping all your prepay credit when you leave - they'll have to provide a full refund.

And of course we will end roaming charges in the EU. First, no more charges for receiving calls. And, second, a new deal so you can "roam like at home", at no extra cost - encouraging those deals onto the market as soon as possible and for as many people as possible. Plus fairer charges when you call another EU country from home - whether from a landline or mobile.

In addition, we will introduce new safeguards for the open internet. So-called "net neutrality" can be a very polarising issue. So I just want to make three factual points about our proposal. First, today, millions of Europeans find online services like Skype blocked, or internet access degraded. My proposal will end those discriminatory restrictions on the open internet. Blocking and throttling will only be allowed in tightly-defined circumstances, like to tackle serious crimes — such as online child pornography. Safeguarding the open internet for all; for the first time across the EU.

The second point I want to make is that internet innovation relies on new services. Some of those new services - like IPTV, e-Health, or intensive cloud computing - rely on a certain kind of network with a certain kind of quality guarantee; "specialised services". I don't want to rule out that boost to citizens, businesses and the economy. That is no way to stimulate a dynamic, innovative internet ecosystem.

But - here's my third point - such specialised services must meet strict criteria: they cannot slow down the internet for everyone else. The text of the regulation is very clear on that, and regulators will have tough new enforcement powers to ensure it. Likewise, your internet contract will for the first time ever have to state the internet speed you'll get. Any significant, sustained reduction from that - because of specialised services, or for any other reason, will be a breach of that contract. Again, that's the first time you'll get such a guarantee in Europe. These are very clear safeguards.

I know it is roaming and net neutrality that will grab most of the headlines. That's understandable given how visible and infuriating unfair charges or blocked services can be.

But really these are just part of a wider picture, to bring down barriers within Europe.

Our proposal is about growth - ensuring strong, healthy EU telecoms players who can think European to compete globally, and support growth across our whole economy.

It's about fairness - ending rip-off charges and unfair practices.

And it's about leadership - the digital leadership Europe once had, and that we desperately need to recapture.

I know that many in Europe recognise this imperative; that is why EU leaders specifically asked for these proposals.

And indeed I hope this is one part of what the October European Council can consider, as part of measures to ensure a thriving, digital Europe. Because a single market for telecoms networks will complement and strengthen other measures on digital jobs, a vibrant single market in online content, and research and innovations into the technology of the future. Together those measures could help us ensure Europe really retakes the lead.

Indeed in just a few weeks I will be meeting industrial leaders in the electronics sector. It's time we started to integrate our innovation policy and our industrial policy. This is definitely a strategic sector - chips power almost everything we do, and enable innovation across the economy. Yet we need to get our act together, and pool the huge resources and talent on offer in Europe. Otherwise we'll see investments that are uncoordinated and ineffective, without global impact, money down the drain. And that's why in May I presented an ambitious European electronics strategy.

Meanwhile we continue to defend sound Internet governance. European leadership means ensuring our voice is heard. The multi-stakeholder model will only work if it is seen to be credible and workable. Yet recent moves do not boost confidence in that model. Our legitimate concerns on the "dot wine" and "dot vin" domain names were completely ignored by the Governmental Advisory Committee of ICANN. It is not acceptable to overrule those objections and press on regardless, as if the Internet were only there to serve US interests.

In that context, I am pleased to announce that the Commission is publicly consulting to get the views of everyone: what should the future of Internet governance look like? I want to put forward our European vision for the online world. I want a Connected Continent in an open and multi-polar Internet.

I know some have found the timing of this proposal difficult. And I know you are working hard on esignatures, cybersecurity and cheaper civil works for broadband. But the fact is time is racing on: the economy is declining, technology is moving ahead, and so are other parts of the world.

The telecoms sector hasn't had its Lehman moment yet. But with declining revenues, rising debt, dated business models, I worry about that happening. And I worry about the consequences if it did.

Consequences for European ICT companies. For the governments who might have to bail them out. For the economy that critically depends on broadband connectivity.

I am prepared to work with everyone to ensure this package gets delivered in time. And I hope that all EU politicians can now treat these issues with the seriousness they deserve. I hope I can count on your support — to ensure digital opportunities in a connected continent. Thank you.