Digital Agenda for Europe
A Europe 2020 Initiative

Should the public sector play any role in fostering NGN deployment?

Discussion

The deployment of Next Generation Networks (NGN), requires very high investement with some degree of variabiliy according to different options, such as FTTH or FTTC, chosen. At the same time the business model of telecom operators is knowing disrupting changes with so called OTT also playing an important role in the markeet. In this context, public initiative, is often solicited to reduce pressure and risk of NGN investment. Should the public sector play any role in fostering NGN deploying? If yes, should it be done through regulatory means or by subsidies/credit enhancement schemes? An interesting reading on this topic: http://www.key4biz.it/News/2013/03/20/Policy/BeyondWCIT_Stefano_Pileri_I... Your views are important to help us shaping the Digital Agenda Assembly to achieve targets on broadband for all in Europe. Have your say!

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Comments

Silvia Selandari's picture

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.
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Carmela Asero's picture

Thanks for your comment. So, what kind of subsidies you have in mind? And how should these fit with competition rule and technology neutrality? And tax breaks should be unique or left to the initiative of single member states? In your opinion, would this create inequalities in treatment of the different operators in Europe and/or different rate of deployment?
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Carmela Asero's picture

Among comments in the question "Should broadband demand be stimulated?" https://ec.europa.eu/digital-agenda/en/content/should-broadband-demand-b... "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"."

There is room for a lively and useful debate here!

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Ferenc Jacobs's picture

This is not the right approach. When you look at the situation in for instance Bulgaria (but it is thematical for other countries), a lot of EU Cohesion Funds were used to deploy optical fibre networks. The networks are not profitable and operations are to expensive, prices of services are too high and people and companies aren't using the networks. If you look at the companies involved you see that the cohesion funds did not stimulate the Bulgarian market and did not contributed to enhancement of the economic situation in the country itself. The money went through the backdoor to foreign (mostly US) investors.

That is just one example how subsidies and tax advantage did help to deploy networks, but did not help European citizens to make use of the facilities. It helped fully loaded investment bankers though :-).

If we leave development of NGN (and if you look further: basic condition for innovation) in the hands of telecom companies we are Digital Africa in 2020. You can't blame the large companies, they got stuck in their business models.

What the EU should do is stimulate local initiatives (on a structural basis) following proven methods, providing broadband for everyone. That is the only way profits (in economic and social way) stay where they belong, with the citizens of every local community, whether it is in Mitzschek Tower in Vienna, or a rural village in Oldambt, The Netherlands.

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Filippo Munisteri's picture

When using structural funds to deploy NGA, there are different experience concerning the final ownership of the infrastructure> Who owns the infrastructure in Bulgaria once is built through structural funds? Would it be useful to concentrate funding on the middle mile and leave the last mile to the operators? there are experiences in this sense in the baltic states, but uptake so far is rather low, especially in rural areas
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Ferenc Jacobs's picture

The ownership of the network should be as close to the end-user as possible. Or at least there should be some appointments about the right of say.

Then, this isn't a problem of the telecom-industry, it is an infrastructural issue. Broadband is the target, e.g. fiber is a mean. It is the same with physical roads.
Basically, why did governments build roads to even the most remote rural properties? The target was to make traffic possible, just to ensure quality of life, business etc. The mean was the road. But the road itself was never the target.

Again, broadband is the target (to ensure quality of life etc) and the infrastructure is the mean. So if we can get loose of the thought that this is a telecom-issue, we can start building 'roads' :-).

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Carmela Asero's picture

Here below  the comments I received, to be shared with you, from Andreas Goerdeler, of German Federal Ministry of Economics and Technology, one of the speakers to the workshop 4 in Dublin.

“The German Federal Ministry of Economics and Technology acknowledges the high potential of Cloud Computing especially for SMEs and startups. Accordingly, the technology program Trusted Cloud was launched two years ago. Trusted Cloud brings together companies and scientist in order to jointly develop innovative, secure, and lawful cloud solutions deployable inter alia in the industry or the health sector.

Cloud Computing requires broadband internet connection. A bandwidth of up to 50 mbit/s is so far available to more than half of German households but meant to increase to three quarters by 2014. The German government supports the development of broadband internet access where market investments do not sufficiently account for positive, external effects. The existing support for the supply side of broadband access will now be complemented by focusing also on aspects bolstering demand.”

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58 users have voted.