September 2005 RD225 - ETNO Reflection Document on the European Commission’s Public Consultation on the Digital Divide

Widespread availability of broadband access is a worthy political, social and economic objective, and ETNO believes that broadband development offers advantages well beyond the Information Society sector.

Widespread availability of broadband access is a worthy political, social and economic objective, and ETNO believes that broadband development offers advantages well beyond the Information Society sector.

It is well recognized in the document that differences among the countries even in the EU 15 exist and that the situation in the new EU 10 members is in general well behind the EU 15 when broadband infrastructure coverage, especially in rural areas, is considered.

The issue is even more significant since broadband and ICT services in general are important for economic development, for increased employment, competitiveness and welfare of the regions and population. When considering broadband promotion and public funding, it is essential to recognize and distinguish between the various types of public sector interventions in network deployment (supply side), and public investments that stimulate and drive demand for broadband. Public policy approaches aiming at addressing the digital gap among regions must start from understanding the root cause of this divide and of the largely weak demand for broadband services.

ETNO strongly believes market-driven investments are fundamental to ensure a demand-driven development of broadband and a successful eEurope. In certain cases, however, public funding may have a role to facilitate the delivery of, and demand for, electronic services where they cannot be achieved by market forces. However, it must be stressed that such funding should not be applied to the roll-out of overlay networks in areas where a commercial offer already exists. To safeguard competition-based broadband development and avoid market distortion, public funds should only be used to bridge the digital divide in well-defined cases, based on clear criteria, and should be applied under fair, transparent and competitively-neutral conditions.

Legitimate interests of private investors should not be impaired or endangered by regulatory interventions. Broadband access should not be included in the EU’s Universal Service Obligation since this would definitely distort the market.