Digital Services or Broadband – Europe’s Dilemma?

tosenovskyIn October 2011, the European Commission presented a detailed plan to significantly improve the trans-European infrastructures. The so-called “Connecting Europe Facility” is one of the most innovative funding programmes of the EU’s next financial period 2014-2020. The core idea behind was to complete the missing links in Europe’s energy, transport and digital core infrastructure. More specifically, it should support the building of new railways, roads, electricity grids, pipelines and high-speed internet (broadband) networks. The planned overall investment in infrastructure networks amounted to around 50 billion euro.

Regarding investment in broadband and pan-European digital services, the Commission intended to earmark 9.2 billion euro, predominantly for deployment of high-speed internet connections. The original proposal also envisaged attracting additional funding from both private and public sources – and in some projects anticipated a multiplier effect of up to 15!

In the meantime, the sands have changed. Due to austerity measures, the EU’s 27 leaders assembled in the European Council in February this year and agreed to decrease the budget under the digital heading of the Connecting Europe Facility to 1 billion euro. Some people say that cutting the subsidies for broadband is penny wise but pound foolish. I am deeply convinced that it is not worthy to waste time in such debates. As a parliamentary rapporteur responsible for the file, from the very beginning I broadly welcomed and supported the main elements of the Commission’s proposal. However, there is a clear necessity for budgetary discipline. Today, all three EU institutions – the Commission, European Parliament and Council of ministers – must respect the current state of play including the allocated budget. Now, the time is ripe for negotiations on the revised proposal.

With a budget of only €1 billon to work with, the European Commission will certainly put more emphasis on digital services and leaving only a small amount for high-speed internet projects. One could say that first, the broadband infrastructure should be built to deliver the services to the citizens. Though, this is not a chicken and egg situation, both are equally important! There should be no dilemma.

Let me start with broadband. I believe the key shortfall is associated with differences between urban and rural regions, where citizens and businesses cannot connect to high-speed internet and benefit from online services. As rapporteur, bridging the digital gap was the core objective that I have been defending. Another point I have repeatedly underlined in the past is becoming an even more topical issue. Every European cent must primarily aim at encouraging private sector investment. The priority should be given mainly to sparsely populated areas where competitive private markets do not exist, due in the main to a lack of recovery of initial costs. In any case, public funds must be prevented from distorting the competitive environment wherever it exists. For such “seed funding” other sources should predominantly be activated, such structural and cohesion funds and also national and regional sources.

With a newly defined budget the cross-border digital services such as electronic identification, e-procurement, eHealth or network security have gained more prominence in our discussions, although the original proposal assigned a considerably smaller share compared to broadband. The shortlisted digital services are of public nature and therefore the public investment is well justified in addition to the use of grants to support the development of these services.

Information and communication technologies represent a dynamic and rapidly developing field. In line with my long-term position I am ready to advocate a decisive influence of the EU’s Member States in setting the priorities and selection of projects of common interest.

All actors involved hope to have a final deal on the digital part of Connecting Europe Facility in the autumn of this year. I will be pleased to update Leaders Magazine readers on the progress and also on other interesting topics discussed in the European Parliament.

By Evžen Tošenovský

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Category: CONTRIBUTORS, Evžen Tošenovský