Opinion of the Committee of the Regions on the 'Communication from the Commission on cohesion and the information society` (98/C 64/03)

THE COMMITTEE OF THE REGIONS,

having regard to the Communication from the European Commission on cohesion and the information society (COM(97) 7 final);

having regard to the decision taken by the European Commission on 11 June 1997, under the first paragraph of Article 198c of the Treaty establishing the European Community, to consult the Committee of the Regions on this matter;

having regard to its decision of 8 March 1996, in anticipation of this consultation, to direct Commission 3 for Transport and Communications Networks to draw up the relevant opinion;

having regard to the draft opinion (CdR 270/97 rev.) adopted by Commission3 on 25 September 1997 (rapporteur: Mr Koivisto),

adopted the following opinion at its 20th plenary session on 19 and 20 November 1997 (meeting of 19 November).

1. Background

1.1. The communication forms part of the follow-up to the recommendations of the European Commission's first Report on economic and social cohesion and complements the Green Paper 'Living and working in the information society - people first`. The issue of the communication marks the second stage on the road to the information society; the liberalization of telecommunications markets is nearing completion and it is time to examine in more detail the effects of the information society in various sectors.

1.2. Though the opening of telecommunications markets and the related harmonization measures should in principle embrace the whole territory of the Union, the principal risk, according to the Commission, is that investment will be delayed in some regions. Thus, market forces must, where necessary, be complemented by policy action in order to close existing gaps and ensure that the information society develops at the desired pace throughout the Union.

1.3. This calls for the participation and cooperation of regions, national governments and the European institutions.

1.4. The communication analyses, for the first time, the link between the information society and economic and social cohesion in the European Union. It is therefore very important from the point of view of the Committee of the Regions and is in line with the regional aspects of the information society which the Committee has highlighted in several previous opinions.

2. Gist of the communication

2.1. Development relating to the information society has the potential to make a significant contribution to the achievement of the objective of economic and social cohesion as laid down in Article 130a of the Treaty establishing the European Community, but at the moment regions in Europe differ quite considerably as regards their ability to participate in this development and to exploit its benefits. In particular, large disparities exist in terms of infrastructure, cost and reliability of services and availability of advanced services.

2.2. The information society also offers great potential for the development of new forms of employment and highly skilled jobs.

2.3. All of the processes associated with the development of the information society also have profound spatial and social implications.

2.4. For the opportunities of the information society to be grasped by individuals, institutions and firms, irrespective of their location, these enabling factors need to be put in place throughout the Union.

2.5. The European Commission has promoted the liberalization of telecommunications markets as this has been judged to accelerate the diffusion of networks, to facilitate the development of innovative services and to bring down the costs of usage. At the same time, it has been considered necessary to develop the regulatory framework for universal service so as to ensure the regional scope of services.

2.6. A tiny proportion of Structural Funds resources is devoted to measures to stimulate demand for information society services.

2.7. To eliminate inter-regional disparities and promote the balanced development of Europe's regions, the European Commission proposes action in the following three areas:

a) as regards development of the regulatory framework for telecommunications markets, there should be a broad debate on the scope of universal service and public access to the services offered by the information society so as to ensure that all sectors can enjoy the full range of benefits of liberalization in the form of affordable price, improved level of service and innovative projects;

b) in the future, special attention should be paid to the completion and upgrading of telecommunications networks, taking into consideration the link between investment and regional economic performance;

c) the European Commission intends to stimulate demand by launching a range of initiatives aimed at developing an integrated and strategic approach to the information society. This will be accompanied by an assessment of existing financial instruments.

SPECIFIC COMMENTS

3. Opportunities offered by the information society and regional disparities

3.1. In the view of the COR, exploiting the opportunities offered by the information society can also make an important contribution to the generation of new services, for example in education and health, in regions which have hitherto been in a less favoured position in this regard.

3.2. Similarly, the development of teleworking and the reduced dependency of firms on location offer entirely new opportunities for improving employment in regions which are more active than the average in exploiting the benefits of the information society.

3.3. Some indicators, such as, for example, the number of Internet users, show that disparities between Member States are increasing rather than diminishing.

3.4. The COR notes that major differences exist not only between Member States but also within individual Member States as regards capacity and willingness to make use of the opportunities provided by the information society to promote employment and regional development in general.

3.5. The COR also draws the Commission's attention in this context to regions' differing development strategies; many regions have other priorities completely than development of the information society. Whilst there should be respect for local expertise in assessing regional priorities, it should be ensured through the effective provision of information that such assessment is not based on incorrect information about the opportunities for regional development afforded by the information society.

3.6. The COR would, however, also underline the global nature of the information society and its markets as well as the ongoing need to deploy all available means to support the development of ICT (information and communication technologies) knowledge resource centres and other similar organizations, which are typically located in the core countries, so as to maximize the overall positive impact on employment in Europe. Greater attention needs to be paid to exploiting this high-level knowhow in furthering cohesion in the information society.

3.7. The European Commission identifies differences in telecommunications infrastructure and level of telecom services as the key determinants of regional disparities. Whilst, as a rule, differences of this kind do not exist within most core countries, nevertheless the level of development differs widely from region to region, even in these countries. The COR takes the view that these differences can largely be attributed to the degree of activeness and spirit of innovation of players in the private and public sectors at regional level, as well as to the level of awareness among decision-makers and operators of the opportunities afforded by the information society.

3.8. The COR endorses the European Commission's view that the best way to promote cohesion in the European information society is to develop telecommunications networks in disadvantaged regions where at present such networks either do not exist or need upgrading. This applies particularly to those regions where even the liberalization of telecommunications markets is failing to generate new investment. If rapid progress is not made in this regard, the effects of Europe-wide demand-stimulation programmes will be minimal and regional disparities will widen further.

4. Effects of regulation

4.1. The COR would draw attention to the fact that ongoing liberalization of telecommunications will increase rather than reduce regional disparities. Here, too, it is not simply a question of differences between cohesion and core countries but also of differences within Member States. It is natural that new services requiring basic physical infrastructure will tend to be concentrated in areas where it is commercially profitable to operate them. The COR feels that it is detrimental from the point of view of the overall economic development of the EU to hold back the development of these services by requiring, for example through licensing policy, provision of services on a wider scale than is commercially feasible.

4.2. The COR believes that the implementation of cohesion in the European information society is important and therefore partly accepts the use of accompanying legislative measures, even though they conflict in some respects with the general principles of free competition in telecommunications. As regards the concept of universal service, which determines the minimum level of service to be provided in all regions, the COR nevertheless notes the following:

a) the implementation of a universal service will probably raise user charges for telecom services, at least in sparsely populated regions. As telecom services will increasingly take the form of packages targeted at different user groups, the specification and regulation of charges on the basis of traditional individual services will not be possible. Major users in core regions receive large reductions, whereas residents in more remote districts pay more, including the costs incurred by providers of the universal service;

b) the idea put forward by the European Commission that different levels of minimum service could be provided for different user groups (for example, health care institutions, educational establishments and SMEs) is as such well-founded. All of the user groups cited in the communication are, however, highly heterogeneous. The COR feels that a better point of departure would be to seek to define the criteria for universal service more generally on the basis of volume of usage;

c) many telecom services are becoming similar to traditional media in terms of their content and market mechanisms. Telecom firms are showing increasing interest in the number of households and firms with network connections with a view to maximizing the potential coverage of advertising, for example. Consequently, there is also an increasing need on the part of firms for a universal service with wide coverage.

4.3. The COR notes the beneficial impact which strict licensing policy can have on furthering cohesion in certain circumstances; for example, licences and funding have been granted for mobile telephone networks on the condition that they have a given geographical coverage. In the view of the COR, the use of such instruments is justified to alleviate regional discrepancies in terms of infrastructure, price, quality and accessibility, but regulation on a wider scale could easily run counter to the original aims of liberalization by retarding development and leading to higher telecom charges for citizens and firms alike.

4.4. The COR hopes that, instead of unduly far-reaching regulation, efforts be made to develop, for example, satellite-based telecom services and suitable low-cost terminal equipment which would not require major investment in basic physical networks and would also cover cohesion regions.

5. Role of local and regional authorities

5.1. Referring to its previous opinions on the information society, the COR once again underlines the important role and responsibility of local and regional authorities in developing the European information society.

5.2. The COR agrees with the European Commission that the regional level is the most appropriate for identifying and implementing the opportunities offered to it by the information society. But contrary to the European Commission's view, the COR notes that some regions have already drawn up extensive ICT development programmes which also focus on measures complementing the development of infrastructure and applications.

5.3. In the view of the COR, the European information society should be built primarily to serve the needs of people. Local and regional authorities have the means at their disposal (e.g. schools and libraries) by which an information society geared to the needs of people will or will not be implemented. These can also be used to find solutions, as called for by the European Commission, that take account of the needs and problems of different groups and individuals and contribute to implementation of cohesion at this level.

5.4. In particular, the COR would highlight the role of local and regional authorities in seeking to promote demand for information society services. The COR considers it of prime importance in this regard to support access to information services in schools, libraries and similar places which are readily accessible to the general public.

Accordingly, schools and similar bodies could help, inter alia through innovative projects of their own, to develop an information society which is more compatible with the needs of young people and of people engaged in cultural and educational activities in general.

5.5. The COR notes that local information services provided by public administrations have already served as a major regional driving force behind the information society in many projects. The COR would nevertheless draw the European Commission's attention to the fact that services provided by local and regional authorities are targeted at all inhabitants and enterprises in the region concerned, whereas the private sector is only interested in paying customers. Thus, when developing services utilizing new technology, local authorities have continually to maintain and develop traditional information channels as well. Given the important role of services provided by local authorities and the difficulties involved in developing them, the COR feels that more resources need to be devoted to supporting their development.

5.6. The COR notes that the IDA programme for the development of information networks between public administrations also offers potential for creating demand focused on the private sector. The programme centres on applications which are not directly related to the activities of local authorities. The COR believes that cohesion in the information society could be advanced, both between states and within individual states, by extending the scope of the programme so as to give greater emphasis to the activities of local and regional authorities.

5.7. On the basis of the above, the COR cannot endorse the European Commission's view that primary responsibility for the development and deployment of the information society rests in the hands of private business, telecom operators and service providers.

6. Regional strategies for the information society

6.1. The COR notes with satisfaction the European Commission's recommendation that Member States should be encouraged to adopt a strategic approach to the information society based on partnership with the relevant players, including local and regional authorities.

6.2. The COR underlines the positive experience gained from the Irisi initiatives, which indicate that different regions need different strategies. The Committee feels that regional strategies for the information society are of great importance, particularly with regard to regional development. Equally important - and even more important as regards the social aspects of the information society - are various kinds of innovative projects undertaken at grass-roots level. A good balance should be struck between these projects and strategies, both in terms of operational effectiveness and deployment of the Community's financial instruments.

6.3. In the view of the COR, it is difficult to formulate a good regional strategy without the prior experience of success and failure gained from working together with people and/or firms in projects at grass-roots level.

6.4. The COR feels it is particularly important to incorporate the development of education and training into regional strategies for the information society because recognition of the opportunities offered by the information society is as important for bringing about cohesion as information society services.

7. Development of financial instruments

7.1. Noting the positive experience gained from the Irisi initiatives, the COR considers it important to develop the opportunities for inter-regional and multinational cooperation in the form of projects supported by Structural Funds resources.

7.2. In the view of the COR, regional projects involving core and cohesion regions in particular could promote the transfer of knowhow, thereby also furthering cohesion.

7.3. Good regional development projects are under way throughout the Community. The COR considers it important when deciding on the deployment of Structural Funds resources in practice also to focus on the transfer of experience and knowhow to other regions and to set aside resources for this purpose.

7.4. In the view of the COR, the R& TD framework programme could also be used to promote technological progress in the European information society without jeopardizing the programme's overall objectives. This could be done by, for example, focusing in some of the specific programmes on participation by cohesion and other disadvantaged regions in the testing of applications developed for the information society.

7.5. The COR draws attention to the major changes which have occurred during the current programming period for the Objective areas, as a result of which the significance of the information society for regional development receives very little attention in existing programming documents, especially in the older Member States. The small share of demand-side projects noted by the European Commission clearly indicates that the current review period is too long to allow for adjustment to rapid change. Accordingly, the programmes for the Objective areas should be made more flexible so as to make it easier during a fairly long implementation period to respond to changes in society.

7.6. The COR believes it is important that adequate attention be paid to bringing about cohesion in the information society in the next round of programmes for Objective areas and that provision is also made for allowing Structural Funds resources to be used for demand-stimulation measures.

8. Conclusions

The Committee of the Regions:

8.1. feels that the opportunities offered by the information society are of great importance for regional development and the advancement of cohesion;

8.2. like the European Commission, attaches very great importance to policy action to stimulate demand for information society services, as well as to the deployment of Structural Funds resources for programmes in support of this;

8.3. believes that the most important short-term goal as regards cohesion is the putting in place of adequate telecom-network infrastructure encompassing all regions;

8.4. would point out that regulation restricting the liberalization of telecom markets, such as, for example, implementation of a universal service, could also have harmful consequences for cohesion;

8.5. notes that the responsibility and role of local and regional authorities in the development of the information society in Europe, and especially in taking account of its social aspects, are at least as important as those of the private sector;

8.6. as a counterbalance to regional and national strategies, would like to see active local operators given the opportunity to contribute to the development of the European information society through small innovative projects;

8.7. considers that it is important to develop opportunities for inter-regional cooperation in projects supported by Structural Funds resources, and to further in other ways the transfer of experience and knowhow.

Brussels, 19 November 1997.

The Chairman of the Committee of the Regions

Pasqual MARAGALL i MIRA