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26 (121) 2016
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Digitisation

The right to internet access – is it time for profound changes?

by Igor Ostrowski, head of the technology-media-telecoms sector group, and Stanisław Dąbek, advocate, Dentons Europe
Header ostrowski dabek

 

In September the European Commission released a proposal for a Directive of the European Parliament and of the Council establishing the European Electronic Communications Code1 and communication Connectivity for a Competitive Digital Single Market – Towards a European Gigabit Society2 dealing with the Digital Single Market.

The Commission gave its view on the future of the European electronic communication market and emphasised the need to review the existing telecoms framework. One of the paramount goals of the proposed pan-European strategy is to provide connectivity to all Europeans by, among other things:

  • Promote co-investment and wholesale-only business models, with particularly high hopes being pinned on the access to and take-up of very high capacity connectivity;

  • Supporting broadband investment projects (using resource available from the ERDF or the Connecting Europe Facility, or under the European Fund for Strategic Investment);

  • Providing universal service3, a key element of which is broadband connectivity;

  • Effectively managing spectrum on the pan-European level;

  • Liberalising (simplifying) the regulatory framework for the latest-generation networks..

Financing Internet Access  

While the European Commission is working to develop the European Electronic Communications Code, which should be adopted by 2017, both the UK and Poland are making big strides in implementing their own national programmes to support broadband investments by financing projects in areas where commercial players are not currently developing any networks and are not likely to develop any in the near future. These programmes provide the financial support needed to vest citizens with their right to fast internet service.

The two countries are following separate investment paths. While the UK is already half-way down the road to completing the Superfast Broadband Programme designed to provide 95% of the UK population with 24 Mb/s+ connectivity by the end of 20174, Poland is only gearing up to announce one of its biggest broadband support programmes using EU funding – the Digital Poland Operational Programme5. Under this programme, telecom operators in Poland will be offered more than €1 billion to develop broadband networks in areas which are less appealing in terms of demographic and economic indices. This money will be spent on develop very high-capacity networks with guaranteed download speeds of 30 Mb/s or 100 Mb/s and upload speeds of 10 Mb/s or 30 Mb/s, respectively6.

Universal service obligation – the philosophy of the right to Internet access

An element no less important to safeguarding the right to Internet access than direct public financing is the already somewhat dated universal service obligation (USO), that is the obligation to provide a bundle of basic telecoms services to all, also in the form of social services. We are now seeing an vigorous discussion in the UK on this issue10, focusing on the scope of services to be provided (whether this should be just internet access), the required technical parameters (defining the kind of internet we should have access to11), the means of providing the services (whether by fixed or wireless networks, or via satellite), and the manner of selecting the service providers. The following two positions emerged in this discussion:

  • A safety net for access to basic digital services  - the policy goal should be to prevent social and digital exclusion by giving access to online services which commercial or public sector deployments would otherwise not reach, given the economics of building suitable networks. This is the industry view.

  • Keeping pace with existing and evolving standards of provision in areas already served commercially – the policy goal should be to offer USO with a technical performance comparable to that delivered commercially with the same price for all customers. This is public administration, consumer groups’ and individual respondents’ view.

The USO has been in existence in Poland since 2007–2011 which is why it is not an issue discussed as hotly as, say, the technical parameters of networks to be developed as part of the Digital Poland Operational Programme. Nevertheless, here too we are bound to see divides emerging between the various market players. In the European Electronic Communications Code, the European Commission has proposed fairly tame changes, aimed only at adapting the USO to currently prevailing standards, and refrained from recommending specific technical standards. The Commission would also like to see new rules for the USO, involving a move away from the reliance on obligatory contributions from operators towards a model of direct financing from state budgets.

Time for revolution or evolution?

The view prevailing in the telecom market appears to be that without a bolder USO policy and without the necessary support for network development, a significant percentage of households will be left without access to the more advanced online services. If this were to happen, the idea of the Digital Single Market in Europe may become illusory. If citizens are deprived of their right to high-quality internet access, they may also find it difficult to exercise their other basic civil rights, and we may not come to live in a truly digital world. The USO by no means should entail the emergence of some bloated institutional system, which is particularly good news when one looks at falling profit levels and increasing competition among telecom market operators. Rather, it may become a proportional and effective tool that is useful in supporting telecom operators who are nowadays benefitting less and less from digitisation processes. A tool supporting public funded broadband projects, which may soon start having a more powerful impact on the market.

1. https://ec.europa.eu/digital-single-market/en/news/proposed-directive-establishing-european-electronic-communications-code
2. https://ec.europa.eu/digital-single-market/en/news/communication-connectivity-competitive-digital-single-market-towards-european-gigabit-society
3. The universal service obligations was first established in 1934 in the USA (https://www.fcc.gov/general/universal-service).  
4.  See UK Next Generation Network Infrastructure Deployment Plan, March 2015. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/418567/UK_Next_Generation_Network_Infrastructure_Deployment_Plan_March_15.pdf
5. https://www.funduszeeuropejskie.gov.pl/strony/o-funduszach/dokumenty/operational-programme-digital-poland-for-2014-2020/
6. The Standards of the NGA Network for the Digital Poland Operational Programme are described in: https://cppc.gov.pl/wp-content/uploads/Za%C5%82%C4%85cznik-8-Wymagania-dla-sieci-NGA-POPC1.pdf
7.Point 21, UK Next Generation Network Infrastructure Deployment Plan Broadband Delivery UK March 2015.
8.https://www.gov.uk/guidance/broadband-delivery-uk
9.http://digital-agenda-data.eu/charts/analyse-one-indicator-and-compare-countries#chart={"indicator-group":"broadband","indicator":"bb_ngacov","breakdown":"TOTAL_POPHH","unit-measure":"pc_hh_all","ref-area":["PL","UK"]}
10.http://stakeholders.ofcom.org.uk/binaries/consultations/broadband-USO-CFI/annexes/Summary_of_responses.pdf
11.The European Commission proposal is to the define basic universal service broadband by way of a basic list of online services usable over the broadband connection, to be further specified by Member State in light of capacity needs of specific online services provided at national Ievel.

 

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