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Investment in Very High Capacity Networks: an imperative for the Digital Single Market
The European Commission last year proposed a new set of ambitious broadband targets for 2025: 100 Mbps for all citizens, including in rural areas, and 1 Gb for businesses, schools and other key socio-economic sectors. The Commission also backed up its ambitious targets with policy changes in its proposal for a European Electronic Communications Code to make sure industry has the tools to deliver on those targets. Now, almost one year into the process, we are seeing some troubling signs that those essential tools are being taken away or seriously diluted, putting the broadband targets for all Europeans in great jeopardy. At Cisco, we fully agree that healthy competition is a key driver for network investment, and we agree that the current regulatory framework in Europe has played an important role in fostering and sustaining competition. But the challenges today are fundamentally different. That’s why we need additional tools to help address them.
Investment in Very High Capacity Networks: an imperative for the Digital Single Market READ FULL ARTICLE

Investment in Very High Capacity Networks: an imperative for the Digital Single Market

Cate Nymann
Cisco EMEAR
Public Policy

2 mo
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The European Commission last year proposed a new set of ambitious broadband targets for 2025: 100 Mbps for all citizens, including in rural areas, and 1 Gb for businesses, schools and other key socio-economic sectors.

The Commission also backed up its ambitious targets with policy changes in its proposal for a European Electronic Communications Code to make sure industry has the tools to deliver on those targets. Now, almost one year into the process, we are seeing some troubling signs that those essential tools are being taken away or seriously diluted, putting the broadband targets for all Europeans in great jeopardy.

At Cisco, we fully agree that healthy competition is a key driver for network investment, and we agree that the current regulatory framework in Europe has played an important role in fostering and sustaining competition.

But the challenges today are fundamentally different. That’s why we need additional tools to help address them.

Never before have we experienced an explosion in the growth of data traffic and the number of devices coming online as we are experiencing right now.

In 2021, we will generate 14 times the amount traffic than we did in 2010. That’s equivalent to every film ever made crossing global IP networks every minute of the day. We will be adding 1 million devices per minute in 2020, and by 2021, the number of connected devices will be at 27.1 billion, three times as high as the global population.

The good news is that consumers’ high-speed broadband access is improving in Europe, with the average download speed increasing from around 30 Mbps to between 45 and 53 Mbps by 2021 according to Cisco’s estimates. But the fact is that Europe needs to move much faster to ensure we have the networks that correspond to tomorrow’s connectivity needs.[1]

According to the Commission’s own estimates, we need additional investments in the range of €250B to deploy high-speed and high-quality networks to reach every EU citizen and business.

That is why Cisco fully supports the Commission’s proposal to incentivise co-investments in Very High Capacity Networks by creating a more flexible regulatory regime for such networks.

We believe competition will continue to thrive under such a regime since there are several safeguards ‘baked in’ to ensure consumers continue to have the choice between different providers.

First, any co-investment deal has to respect a number of conditions in order to qualify for the preferential regulatory regime to ensure it is not used to re-monopolise networks. This includes making the network open to competitors on fair, reasonable and non-discriminatory terms. 

Second, national regulators will continue to have strong oversight to ensure any investment deal lives up to the aforementioned conditions. This applies both before the preferential regulatory treatment is triggered and throughout the lifetime of the network. If one or more of the investing players act in an anti-competitive manner, the national regulators will fully retain its powers to intervene in the market.

For those reasons, we believe the Commission’s proposal strikes the right balance between continuing to promote competition and fostering new investments. Additional investments that are indispensable if we are to meet our businesses’ and citizen’s connectivity needs in a digitised society. 

If we believe in digital transformation for the benefits it will bring to our economy, our society and our citizens, we should be ready to follow through with the necessary policy changes. We therefore strongly encourage policy-makers at this crucial stage to deliver an Electronic Communications Code which will truly enable industry to build the networks imperative to the Digital Single Market.

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