Digital Agenda for Europe
A Europe 2020 Initiative

Should broadband demand be stimulated?

Discussion

The ITU paper "The Impact of Broadband on the Economy: Research to Date and Policy Issues", (http://www.itu.int/ITU-D/treg/broadband/ITU-BB-Reports_Impact-of-Broadba...) published in 2012, argues that debate on Internet up to now suggested that "by reducing the obstacles for infrastructure investment, the digital divide challenge would disappear". However "demand for broadband services also plays a key role in explaining service penetration" and a broadband demand gap can also be identified. In your opinion, should broadband demand be stimulated? If so, should it be stimulated by national governments, by the EU or by other bodies? We are eager to listen to your comments and views.

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69 users have voted.

Comments

Chris Conder's picture

You can't get people to use something that isn't there, and isn't there for their family, friends or work colleagues. To many people are at the wrong side of a growing digital divide, with massive areas of the land mass unable to get a fit for purpose connection. Until there is ubiquitous, affordable, fit for purpose connections for ALL we are flogging a dead horse. The EU's job isn't to waste our money dragging horses to water, its job is to make sure the water is there to drink. The way to do this is to remove the barriers that altnets face, stop giving money to incumbents for cabinets which only help those who already have a service and prolong the life of their copper assets. Remove the intolerable bureaucracy from funding sources and encourage investment in alternative solutions. If the EU provided soft loans there would be far more activity from altnets in each country. Once the altnets are established its easy to pay the loans back, and it would make the incumbents up their game, lay more fibre and stop pratting around with phone lines pretending to the people its fibre broadband. It isn't fibre broadband unless its fibre to the home. We need to know the truth, not the marketing hype, and we need to move forward.
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64 users have voted.
Carmela Asero's picture

Dear ncondech. That's exactly what the European Commission intended to do by proposing the Connecting Europe Facility https://ec.europa.eu/digital-agenda/en/connecting-europe-facility. This proposal recommended investements in broadband for €9.2 billion but this amount was reduced to €1 billion after heavy cuts decided by the European Council's discussion on multi annual budget 2014-2020 last February. See eg. http://www.theregister.co.uk/2013/02/11/connecting_europe_facility_is_ca... So, unfortunately, the EU has to face reality and go ahead with given current means, but maybe, at next occasion, Europe will probably be able to count on committed citizens like you raising their voice toward own national governments to protect EU wide broadband investment aiming at making available "ubiquitous, affordable, fit for purpose connections for ALL".
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75 users have voted.
Paul Foley's picture

A study by Tech4i2 and Analysys Mason published a couple of weeks ago (http://bit.ly/18x1YvY) highlights that investment decisions are affected by the payback period or rate of return that can be achieved on broadband deployment by private sector organisations. Returns on investment obviously increase as more people/businesses use the infrastructure. Higher numbers of users could help to decrease the public sector subsidies that might have been required in areas previously regarded as uneconomic for deployment.
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66 users have voted.
Benoît Felten's picture

If demand for next-generation broadband was really an issue then we wouldn't be seeing high take-rates in many places including Europe. Furthermore, the telecoms market has always been supply driven. The core issue is with supply: only a few players are embracing NGA from start to finish, and that's not just building but marketing and selling it to, actively encouraging customer migration from the legacy platform to the fiber-enabled platform. Most players, and sadly especially subsidized incumbents are going at it half-hearted. They call it "managing the transition". I don't quite know to be honest what the EU can do to address that particular issue. Competition is really the only thing incumbents understand and fear (which explains in large part ETNO's pleas for less competition...)
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Carmela Asero's picture

So, demand should come before NGN deployment. Is the demand there or not enough yet? And should Europe foster NGN deployment anyway? And how? Among comments in the question "Should the public sector play any role in fostering NGN deploying?", a participant commented: "The NGN deployment is crucial to enable the European economies to recover fast from the crisis. I think that the public sector at European, National and regional level should support it. This should happen either via subsidies and tax breaks for telecom operators."

Do you agree? If no, for which reasons?

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70 users have voted.
Phil Thompson's picture

It is difficult to stimulate demand for a service that doesn't yet exist - selling vapourware - and it is equally difficult to justify investment in a service for which the demand is uncertain. If someone else is paying it's easy to say "build it and they will come" but there is evidence of low takeup that argues against this. Demand stimulation and rollout of services needs to go hand in hand, it may be that the public sector can provide some demand itself or stimulate it in the population, working with connectivity providers making the investment in parallel.
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69 users have voted.
Ferenc Jacobs's picture

It is not about stimulation of services or broadband deployment. It is about the appointments being made about the ownership and access to the networks. The situation in Europe is that broadband development is being holded back by telecom companies. They are responsible for the slow rollout of superfast networks in rural Europe. And by closing the networks which are already there for innovation, just to protect old fashioned and suffocating business models they are not the right partners for the European Union to work on stimulating broadband and services.

The only possible approach for communities is taking matters in our own hands, just as we are proving in Sweden, Norway, Austria, Netherlands and Croatia (with Lithuania, Latvia, Hungary, Czech Republic and Slovakia as the next countries).

With real broadband for everyone as my credo it is my belief that if we provide the infrastructure to our communities (throughout Europe) it is not a question íf new services will appear, but whén they will. By creating the conditions for real innovation and keep economy local, but with a global scale.

It is possible and it works. And it should be taken into consideration before we discuss stimulating measures which will only flow back into the pockets of investors behind large companies, just because they have the strongest lobby facilities. With cohesion funds and revolving project bonds there can be much more facilitation from the EU to local initiatives working on a practical solution to solve their broadband demands. It is money well spent, to put it in local communities. That is the true obligation of the EU, not filling the fully loaded bank accounts of telco shareholders.

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63 users have voted.
Filippo Munisteri's picture

Project bonds are designed to get funding to those initiatives that normally would not get it and work through a credit enhancement mechanism. However, after CEF digital drastic cuts, there will be very little money available. Moreover, local communities do not always have the admin capacity to design and issue bonds. Jaspers and cohesion funds could provide an answer, but will regions switch from grants to financial instruments?
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Ferenc Jacobs's picture

Thank you for your reaction! I agree about local communities not always having the capacity. But during recent conversations with the EU bureau managing the project bonds for broadband, my colleagues and I were asked to put together a framework for local, interlocal, interregional and international application. And that tackles the administrative problem and unlocks the financial instruments.

Broadband is the target, the infrastructure a mean (as I stated in another line on this engagement platform). It is about livability in each member state. If benefits should remain local, the only way to do it is to get the ownership as close as possible to the respective communities. It is a healthy way to make a community responsible for and beneficiary of the network.

What about your comment about switching from grants to financial instruments. I totally agree that this is a big challenge for governments. It is about turning into a facilitative role, in stead of a regulative role. When people are organizing things for themselves there is always the fear of losing the control. We are officially in a European crisis, so every single person has to deal with changes in roles or situations, governments included. And that should not be a disadvantage, it opens up new possibilities. So there is absolutely no reason to fear the current developments.

But I am not a government ;-)

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69 users have voted.
Gianluca Cembrani's picture

You made a good question. In fact, lots of people I know don't even ask about broadband (FTTH basically). They're fine with their connection, and just don't think "what could I do with faster speeds?".

I don't think the reason is that they do not need more speed; they just don't need more because they don't have the chance to.
Take LTE for instance. Now everybody needs LTE, if you don't have LTE you're old. Companies and TV ads started a massive campaign about LTE. Although I don't think we do need such great speeds on mobile devices, people just want LTE. People discovered that sharing a video within seconds is better (obviously) than minutes. Maybe they were fine in HSDPA, but they've got stimulated by companies, they've discovered what they can do and now they need it.

I guess it would be the same with broadband: show people how fast is it, show them what they can do, give them a real chance to have it, and they'll ask for it.
Many of my friends don't know you can (legally) rent or buy a blu ray quality movie on Internet; they think that video surveillance is just for top-secret companies; they just don't ask what they could do if they're home connection would be as fast as their mobile one.

Who is going to take the duty of stimulating broadband connection among citizens? I honestly don't think that any EU bodies could do it; EU bodies should draw a path, regulate and vigilate. But local bodies should take care of it; and with local bodies I don't mean any national government: we all know the risk of giving politics alone the role to innovate. Don't take me wrong: I still believe in politics and politicians; but in my opinion is like asking an astronaut to innovate about open chest surgery...you'd better not to...
With local bodies I mean bodies made by local people, bodies that are not made (only) of politicians: take some "nerds" (or call them whatever you want...power users, prosumers...) and give them the chance to talk to people, to listen to people, to give them new ideas about why they should need more bandwidth. Then everything will happen.

Again, EU bodies should tell us (nations) the right way to do it, and give us the chance (grants? financial instruments?) to do it. Then we need the will and the courage to do it.

I'll leave you with a list of things that I can't actually do with an ADSL (and I'm considered lucky, since 4mbit down/256kb up is not that bad). Not to complain, just to show that an average Joe would benefit so much from broadband
- i'm a videomaker; I shoot in 1080p or even 4k; would be nice to upload my works without sending a dvd to a friend of mine lucky enough to have FTTH;
- i'm a musician; I play uilleann pipes (Irish bagpipes). Would be great to broadcast HD audio to other musicians in the world, I could improve a lot. In Italy there are about 20 uilleann pipes player, and the nearest one is 150km from my city. I would love to participate in some music networking project with friends in Ireland.
- I'm a photographer; takes me about 1 hour to share a RAW file to somebody;
- I'm passionate about languages; I'm talking to a girl, Jinnet, from Bogota twice a week to learn Spanish. Yeah, just talk, don't have enough upload bandwidth to transmit video too;
- I love cinema. Would definitely rent HD movies online instead of buying Blu ray disks;
- "cloud" is great, got 80Gb online with a service. But how can I pretend to use these 80Gb of space without FTTH?

I know that these things are possible with broadband: NOW, not in the future. Just show people that with FTTH these things can actually be achieved today, and the demand would improve.

Thanks for your patience in reading this, for your work and good luck with da13!

Gianluca from Trento, Italy

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62 users have voted.