Communication from the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions - Electronic Communications: the Road to the Knowledge Economy (Text with EEA relevance)
Date: 2003-02-11
Institutions: European Commission
Subjects: EU action, Internet, Internet access provider, regulation of telecommunications, telecommunications, telecommunications industry, transmission network

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 11.2.2003
COM(2003) 65 final

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE
EUROPEAN PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE AND
THE COMMITTEE OF THE REGIONS

Electronic Communications:
the Road to the Knowledge Economy

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL, THE
EUROPEAN PARLIAMENT, THE ECONOMIC AND SOCIAL COMMITTEE AND
THE COMMITTEE OF THE REGIONS

Electronic Communications:
the Road to the Knowledge Economy

(Text with EEA relevance)

TABLE OF CONTENTS

1.

2.

3.

3.1

3.2

3.3

3.4

3.5

4.

5.

Introduction.................................................................................................................. 3

The implementation of the new regulatory framework for electronic communications4

Stimulating the delivery of electronic communications services................................. 5

The development of broadband services...................................................................... 6

The mobile sector......................................................................................................... 8

Interoperability........................................................................................................... 11

Public services............................................................................................................ 11

Security ...................................................................................................................... 12

Research and Development........................................................................................ 14

Conclusions................................................................................................................ 14

2

1.

INTRODUCTION

After a period of  fast  growth in 1998-2000,  the  electronic  communications sector  is
currently  undergoing  a  severe  adjustment  process.  The  adjustment  was  perhaps
inevitable  after  the  very  fast  growth  of  earlier  years.  Its  implications  and  possible
outcomes  raise  important  issues  for  the  future  of  the  sector  itself  and  for  economic
growth in Europe.

The rapid expansion led to imbalances that will have to be worked through over the
next  few  years.  The  sector  invested  heavily  and  many  operators  accumulated  high
levels of debt. When economic growth slowed, expected revenues did not materialise.
This  led  to  a  decline  in  stock  market  valuations  and  to  the  postponement  of
investment at a critical time both for the sector and the wider economy.

The  high  level  of  payments  associated  to  third  generation  mobile  communications
(“3G”) licenses contributed to worsen the financial situation of operators, although the
situation varies across the EU. The experience of 3G licensing points at the need for
increased coordination of policy and regulatory approaches across Europe, as possible
under the new regulatory framework for electronic communications, in order to avoid
the  risk  that  fragmentation  and  diverging  conditions  at  the  national  level  delay  the
introduction of new wireless mobile services.

The  reduction  in  investment  is  having  a  negative  effect  on  the  rollout  of  new
advanced services, in particular, broadband and 3G. This results in a drop in demand
for investment goods with suppliers experiencing significant reductions in sales. It has
also  led  to  reductions  in  R&D  expenditure  which  undermines  Europe’s  competitive
position.

The importance of the communications sector lies in its impact on all other sectors of
the  economy.  It  offers  the  potential  for  organisations  to  make  best  use  of  their
investment in information technology and to realise productivity gains, improvements
in  quality  and  opportunities  for  greater  social  inclusion.  The  sector  is  therefore  of
fundamental  importance  to  the  full  development  of  the  knowledge-based  economy.
Higher  productivity  leading  to  higher  growth  with  more  and  better  jobs  and  greater
social cohesion is one of the objectives of the Lisbon strategy designed to transform
the  economic,  social  and  environmental  performance  of  the  European  Union  by  the
end of the decade.

The  sector  is  also  important  in  its  own  right.  It  employs  about  one  and  a  quarter
million people, had turnover of € 236 billion in 2002 and represents more than 2.5%
of European Union GDP. Its direct contribution to the economy is still increasing due
to growth rates above the increase in GDP.

Given  its  importance  to  the  wider  economy,  it  is  more  important  than  ever  that
governments provide  an  environment that ensures  the  development  of  the  sector  for
the  benefit  of  its  users.  The  advent  of  broadband  communications  is  radically
changing the Internet and it is essential for  investment  in  Europe  to  continue if it  is

3

not to be left behind. Similarly, investment now in 3G must be sustained, if businesses
within the European Union are to maintain their lead in mobile telephony.

Electronic communications are a European strength and action must be taken now to
consolidate  this  and  to  achieve  the  Lisbon  objectives.  This  requires  above  all  legal
certainty  to  create  the  conditions  for  long  term  investment;  public  policy  that
stimulates  both  demand  and  supply;  and, 
term
competitiveness  and  innovation  through  R&D.  As  noted  in  the  conclusions  of  the
December 2002 Telecoms Council, state aid is not the way forward.

the  safeguarding  of 

long 

This Communication does not launch new policies. It reminds Member States of the
need to complete rapidly the process of defining and implementing the actions already
planned and complementing these where necessary. Concretely,  governments should
aim to:

(i)

(ii)

the  full,  effective  and  timely  implementation  of  the  new  regulatory
framework  for  electronic  communications  to  create  and  maintain  a
competitive environment that offers incentives to innovate, invest, and
improve the quality of the services offered.

encourage  the  use  of  electronic  communication  technologies  through
broadband and multi-platform access, as outlined in the eEurope 2005
Action Plan, to improve public services and, ultimately, to reorganise
business  and  administrative  processes  to  increase  productivity  and
growth.

(iii)

support  and  strengthen  current  research  efforts  at  national  and  EU
level to ensure Europe’s long-term competitiveness.

This  Communication  responds  to  the  request  addressed  to  the  Commission  by  the
Telecommunications  Council  of  5  December  2002,  to  report  in  due  time  before  the
European Spring Council on the situation of the sector and, if necessary, put forward
appropriate  proposals.  It  presents  the  actions  currently  underway  in  Europe,
particularly  at  the  EU  level,  and  it  outlines  a  roadmap  of  the  major  initiatives.  The
Communication focuses on those actions that are most likely to impact on the sector
in the next 12 to 18 months.

2.

THE  IMPLEMENTATION  OF  THE  NEW  REGULATORY  FRAMEWORK  FOR
ELECTRONIC COMMUNICATIONS

The  new  regulatory  framework  brings  benefits  to  consumers  by  ensuring  a
competitive  environment  for  the  delivery  of  electronic  communications  services,
stimulating innovation, creating scope for price reductions, and increasing consumers’
choice.  It  provides  clear  and  stable  rules,  improving  certainty  for  investors.
Predictability provides incentives to innovate and facilitates long-term investment.

4

The rapid development of the sector and recent technological advances have brought
about  new  challenges  for  regulators.  These  changes  allow  data  to  be  transported
through all networks, and to be accessed from a variety of terminals. This process is
known as “convergence”. The regulatory framework takes it into account by avoiding
favouring  one  technology  over  another.  This  approach  is  called  ‘technological
neutrality’.

Technology-neutral  regulation  allows  provision  of  new  services  and  leads  to
competition between different access methods, known as facilities-based competition.
In  the  mid  to  long-term  this  is  the  best  way  to  low  prices  and  increased  choice  of
services.  It  also  stimulates  innovation  and  creates  resilience  in  communications
infrastructure as a whole.

A new legal  framework  was  adopted  at  the  EU  level  at  the  beginning  of  2002.  The
challenge ahead is its full, effective and timely implementation across Member States,
who must transpose the European directives into national legislation by 24 July 2003.
In addition, national regulatory authorities should receive the resources  they need to
face the new tasks.  Any delay would create unnecessary  uncertainties  with  negative
consequences on the sector.

24  July  2003,  deadline  for  the  transposition  of  the  new  legal  framework  for
electronic communications of March 2002.

To make sure that national regulators apply the new rules in a coherent and consistent
manner across the different Member States, the Commission has elaborated guidelines
on how to conduct the analysis of the markets and on how to determine the existence
of "significant market power". The corresponding document was published on 11 July
2002.

The Commission was also asked to issue a recommendation on the relevant markets
(e.g. the markets that should be analysed by the national regulatory authorities for the
purpose  of  determining  which  ex-ante  obligations  apply  to  undertakings  holding
significant market power). This recommendation [was adopted on 11 February 2003].

A number of committees and procedures has been established to facilitate the uniform
application of the framework. At present, the Commission and the national regulatory
authorities  are  defining  the  procedures  for  the  notification  and  examination  of  the
specific  measures  taken  by  national  regulatory  authorities  (so  called  "article  7"
procedures). For its part, the Commission is modifying its own internal structures to
accommodate the expected high volume of individual notifications.

Second  half  of  2003,  the  committees  must  be  working  effectively  and  the
notification procedure must function rapidly and efficiently.

3.

STIMULATING THE DELIVERY OF ELECTRONIC COMMUNICATIONS SERVICES

To  encourage  the  take  up  of  information  and  communication  technologies,  the
European  Union  launched  the  eEurope  initiative  in  2000.  The  objective  of  the
eEurope initiative was  ambitious: to bring every citizen, school and business online,
and  to  exploit  the  potential  of  the  new  economy  for  growth,  employment,  and

5

inclusion.  The  importance  of  access  and  use  of  information  and  communication
technologies was also recognised in the 2002 Broad Economic Policy Guidelines.

The recent  eEurope 2005  Action  Plan  (endorsed  at  the  Seville  European  Council  of
2002, covering the period 2003-5) takes a step further, towards the development and
the  use  of  a  world-class  infrastructure  able  to  deliver  modernised  public  services.  It
focuses on the exploitation of information and communication technologies to make
public services more productive and accessible, to complete a favourable environment
for e-business, and to secure a broadband information infrastructure.

On the supply side, actions on broadband and security should advance the roll-out of
infrastructure and  stimulate the  development  of  innovative  content  and  applications.
On the demand side, actions on e-government, e-health, e-learning and e-business are
designed to foster the development of new services and to increase demand providing
a crucial pull for the rollout of networks.

Looking ahead, the eEurope 2005 Action Plan promotes a multi-platform approach to
broadband deployment, driven by strong competition between services and networks.
When there is effective facilities-based competition, the new framework will require
ex-ante  regulatory  obligations  to  be  lifted.  Investment  in  new  and  competing
infrastructures  will  bring  forward  the  day  when  such  obligations  can  be  relaxed.

3.1

The development of broadband services

Fast  Internet  connections  are  the  basis  of  a  world-class  infrastructure  for  the
knowledge-based  society.  The  eEurope  2002  final  report  shows  that  Internet
penetration  in  Europe  has  increased  very  rapidly  over  the  past  two  years.  As  the
Internet will have become the main medium for the transmission of information and
communication in Europe by the end of the decade, it is imperative that Europe steps
up to a more efficient use of it.

Most  Internet  users  today  connect  to  their  providers  through  temporary  telephone
connections (dial-up) at low speeds of data transfer. Dial-up may be sufficient to send
e-mails  and  download  small  documents,  but  is  not  fast  enough  for  large  audio  or
video  files.  High-speed  and  permanent  connections  ("broadband")  allow  the
immediate transmission of large volumes of data, changing the overall presentation of
the Internet.

Broadband  provides  important  new  options  in  terms  of  the  quality  of  services
delivered.  Distance  education  (using  e-learning),  access  to  government  services  (e-
government),  healthcare  (e-health),  entertainment,  videoconferencing,  e-commerce,
etc. become more practical and often feasible only through the high speed provided by
broadband  access.  Realising  the  full  benefits  will  also  require  reorganisation  of
business  and  administrative  processes  and  the  upgrading  of  skills.  The  adoption  of
these services into our daily life, and the opening of new markets, can improve quality
of life, increase productivity and stimulate innovation.

6

Broadband is currently available mainly over existing infrastructure, in particular over
the telephone copper network using ADSL1 technology, and over cable TV networks
using  cable  modems.  In  addition,  broadband  access  can  be  delivered  over  new
infrastructure,  such  as  fibre  optic,  fixed  wireless  access  (FWA),  third-generation
mobile  systems,  R-LANs2,  satellite  communication  systems,  free  space  optics  and
through electric power line transmission.

In  October  2002,  the  number  of  broadband  connections  in  the  European  Union  was
10.8 million (8th Implementation Report). Three months later, this figure is estimated
to have grown to over 12 million. Awareness of the possibilities offered by broadband
is  spreading,  interest  is  growing,  and  a  new  market  starts  to  unfold.  While  large
corporations have completed their transition to broadband access, the focus must now
be  on  the  mass  market  to  ensure  that  broadband  becomes  available  to  SMEs  and
households  on  a  large  scale.  Competition  remains  an  essential  tool  for  the
achievement of widespread access.

In  many  rural  and  remote  regions,  geographical  isolation  and  low  density  of
population  can  make  the  cost  of  upgrading  telephone  lines  to  broadband  capability
unsustainable.  Here,  the  Structural  Funds  can  be  used  to  increase  infrastructure
availability. As the mid-term review of Structural Funds programs will take place in
2003, this would provide an opportunity for Member States to give greater emphasis
to this priority on the basis of an assessment of the regional needs.

By Spring 2003, the Commission will provide Member States with guidelines on
criteria and modalities of implementation of Structural Funds in support of the
electronic  communications  sector,  notably  broadband  fixed  and  wireless
infrastructure.

The  development  of  broadband  services  constitutes  an  important  source  of  revenue
growth  both  for  fixed  line  communication  companies  and  cable  operators  who  are
facing stagnating demand for their other services. Increases in broadband connections
also generate significant demand for specific equipment, benefiting manufacturers.

The combination of economic and societal interest in the development of high-speed
connections  has  led  many  governments  to  take  specific  actions  to  encourage  its
deployment. Many Member States have elaborated specific ‘broadband strategies’.

The  achievement  of  widespread  broadband  availability  and  use  is  one  of  the  key
supply-side objectives of the eEurope 2005 Action Plan. As part of this initiative, the
European Commission convened a workshop in Brussels at the end of January, where
Member States were invited to present the national strategies for achieving ubiquitous
access.

Discussions  will  be  continued  on  issues  such  as  the  relationship  between  content
providers  and  infrastructure  operators  (fostering  a  dialogue  between  stakeholders),
the  regional  and  local  experiences,  and  the  contribution  governments  can  make  by

1

2

Asymmetric Digital Subscriber Line.
Radio Local Area Networks.

7

                                                
combining  their  purchasing  power  (demand  aggregation3).  The  Commission  is
organising a series of ad-hoc workshops to support the on-going discussions.

A  Ministerial  level  discussion  on  new  technologies,  broadband  and  3G,  would  be
welcome  in  the  second  half  of  2003.  A  ‘broadband  portal’  will  report  on  the
discussions between stakeholders.

The Commission, together with Member States and other stakeholders, has started a
process to define common objectives and to further national broadband strategies.

(cid:1)  All Member States should have a comprehensive broadband strategy in place

by the end of 2003;

(cid:1)  All public administrations should have broadband connections by end 2005;

(cid:1)  Europe  should  achieve  widespread  access  and  aim  to  reach  half  of  Internet

connections to be broadband by 2005.

Progress  in deployment  of  broadband  will be  monitored  under  the  ongoing  eEurope
benchmarking  exercise  using  indicators  agreed  on  at  the  December  2002  Telecom
Council.

Commission  document  describing  national broadband  strategies  in  all  Member
States to be presented at the end of 2003.

.

Spring 2004, first eEurope 2005 benchmarking report.

.

3.2

The mobile sector

3G networks require a very large investment. The establishment of these networks is
likely to generate significant revenue streams: to operators, to service providers and to
equipment manufacturers. These revenues will make an important contribution to the
future prosperity of the sector but action needs to be taken to encourage roll-out.

Some governments have been faced with requests to adapt the licensing conditions or
the roll-out deadlines. Some adaptations have taken place. However, any adaptation of
deadlines  must  balance  the  benefit  of  encouraging  the  continued  deployment  of  the
networks against the danger of worsening the difficulties of the equipment suppliers.
Governments and national regulatory  authorities are convinced of the need for  close
consultation to take consistent decisions throughout Europe.

3

For example connecting all public administrations to broadband.

8

                                                
End of 2003: Commission and Member States to work out coherent approaches
to  deployment  deadlines  in  the  appropriate  fora  under  the  new  regulatory
framework

Network infrastructure sharing by mobile network operators is an issue that needs to
be  addressed  further.  Sharing  infrastructure  with  other  operators  can  substantially
reduce costs4 but may raise competition concerns. The Commission has expressed its
view  in  the  Communication  on  3G  of  June  2002  and  two  preliminary  opinions
concerning individual cases. Infrastructure sharing has effectively taken place in some
Member States. The Commission welcomes the fact that indications on this issue have
already  been  given  by  some  national  competition  authorities.  It  is  important  for
industry  to  know  with  as  much  certainty  as  possible  the  extent  of  the  sharing
possibilities so as to be able to plan future investment.

End  of  2003:  The  Commission  and  Member  States  to  provide  clarifications  on
issues of network infrastructure sharing.

The  new  EU  Regulatory  Framework  for  electronic  communications  provides
opportunities to ensure that a coherent policy on wireless communications is pursued
across the EU. The Communications Committee and the European Regulators Group
provide the means to discuss the relevant issues with the Member States both at policy
and technical levels, while the transparency and  co-ordination mechanism (Article  7
procedures) will play an important role in ensuring coherence of regulatory decisions.

Moreover, spectrum-related issues will be now discussed within the framework of the
Radio  Spectrum  Decision  and  it  will  be  possible  to  co-ordinate  at  an  early  stage
Member  States’  approaches,  via  the  two  new  bodies  under  the  Decision  (the  Radio
Spectrum Policy Group and the Radio Spectrum Committee).

A more flexible approach to radio spectrum trading and usage in the mobile sector
will  contribute  to  a  more  efficient  mobile  market.  The  new  regulatory  framework
provides increased opportunities in this respect for Member States. The Commission
has launched a  study into secondary spectrum  trading  and will organise a  workshop
by mid 2003 with all actors involved (operators and other users, Member States and
their regulatory authorities).

Mid 2003: Commission  to organise a workshop on secondary spectrum trading
and spectrum usage.

Another  difficulty  encountered  by  telecommunication  operators  is  the  reluctance  of
some  local  authorities  to  grant  the  licenses  for  the  installation  of  masts  and  base
stations.  The  conclusions  to  the  Seville  European  Council  stated  that  the  Council
“calls  upon  all  the  administrations  concerned  to  act  to  overcome  difficulties
encountered  in  the  physical  deployment  of  networks”.  Member  States  should  look
urgently into the matter, and discussions with local authorities should be started.

4

For this reason, network infrastructure sharing is a particularly interesting solution to reconcile
competition and accessibility in thinly populated regions.

9

                                                
Member  States  to  urgently  discuss  with  local  authorities  any  difficulties  in  the
physical deployment of 3G networks.

The  Commission  views  it  a  priority  to  contribute  to  a  general  awareness  and
understanding of the objective risks associated with the use  of mobile terminals and
base  stations.  Considerable  research  work  has  been  undertaken  to  investigate  a
possible impact on health. Information that has become available from a large body of
scientific  research  does  not  suggest  that  carcinogenic  and  other  non-thermal  health
effects  can  be  attributed  to  radio-frequencies,  as  used  e.g.  by  mobile  telephony
equipment , below the safety exposure limits established by the 12 July 1999 Council
Recommendation. This was re-established by the 30 October 2001 opinion from the
Commission  Scientific  Committee  on  Toxicology  Ecotoxicity  and  the  Environment
and is also reflected by other international and national scientific committees and the
WHO.  The  recommended  limits  to  radio-frequency  fields  are  regularly  reviewed  by
the  Commission  Scientific  Committees.  However,  the  issue  of  public  exposure  to
electro-magnetic fields and full respect of the recommended limits to radio-frequency
fields  has  to  remain  a  constant  priority.  Research  must  be  continued,  including  the
ongoing large-scale studies by the WHO supported by EU R&D funding, and science-
based information must be made available.

Necessary information on health-related problems of electro-magnetic fields will
be made available on Commission website in connection with the World Health
Organisation by Spring 2003.

The  Commission  mandated  CENELEC  to  draft  standards  for  health  aspects  of  the
mobile telephony to be recognised under Community law. These standards ensure that
the public is not exposed to electro-magnetic fields beyond the  levels recommended
by the Council. The standards for mobile phones have been finalised; those for base
stations are partly available and are planned to be finalised in 2003.

End  of  2003:  Member  States  to  actively  support  standardisation  regarding
health protection of the public in the mobile sector.

To stimulate the effective use of advanced mobile communications, there is a need to
look  at  emerging  issues  relating  to  mobile  payments.  The  industry  is  preparing  a
document aiming at identifying the obstacles (regulatory and other) to the wider use
of  mobile  payments,  proposing  ways  of  addressing  them.  The  Commission  helps
resolving  the  divergence  of  opinions  within  industry.  This  document  should
eventually pave the way to standardisation.

Moreover:

End of 2003: Commission report on the state of deployment of 3G networks.

Finally, satellite navigation has been highlighted as a prime means to allow for new
mobile  applications.  The  satellite  navigation  market  in  2005  in  terms  of  telecom
applications has been estimated to some 6 billions euros. The European infrastructure
Galileo,  approved  in  2002,  will  provide  a  set  of  services  which  will  trigger  an
opportunity for location-based services to be developed.

10

3.3

Interoperability

Achieving widespread access by all citizens to new Information Society services and
applications is one of the goals of the EU. The possibility to access such services and
applications via terminals other than a PC, to use multiple network platforms such as
cable  television,  digital  TV,  3G  or  R-LANs  will  create  significant  economic  and
social opportunities.

A choice of platforms provides citizens with more convenient and interactive access
to e-government, e-health, e-learning, e-commerce etc, facilitates their rapid take up,
contributes  to  social  inclusion,  fosters  innovation,  offers  freedom  of  choice  and
enhances competition.

However the challenge of interoperability must be addressed at different levels, such
as  terminal  devices,  network  infrastructure,  content  and  services  and  applications
delivered  across  platforms.  Achieving  interoperability  requires  action  at  all  these
levels  (e.g.  by  applications  developers,  services  providers,  content  aggregators,
network operators and terminal equipment manufacturers). The Commission strongly
encourages the development of interoperable services, applications and platforms, as
well  as  the  development  of  multi-platform  content5.  The  eEurope  standardisation
action plan, partly funded by the European Commission, is a useful instrument in that
respect.

Communication  to  European  Parliament  and  Council  on  Interoperability  in
support of pan-European eGovernment services in June 2003.

This  active  support  is  complemented  by  industry  initiatives  in  the  communications
sector such as the Open Mobile Alliance, where industry has taken steps to ensure the
interoperability  of  services  across  terminals  and  networks.  However,  as  3G  systems
start  being  commercially  introduced,  more  may  need  to  be  done  to  enhance  the
availability  and  ease  of  use  of  mobile  services  and  applications,  notably  through  an
accelerated plan for interoperability testing.

The Commission recently launched a public consultation on a report on the remaining
“Barriers  to  widespread  access  to  new  services  and  applications  of  the  information
society  through  open  platforms  in  digital  television  and  third  generation  mobile
communications”.

Spring 2003: Commission  to  issue  a  Communication  on  barriers  to  widespread
access to Information Society services through open platforms.

3.4

Public services

The success of broadband and 3G will depend to a large extent on the availability of
attractive content,  applications and services.  Demand  for  broadband  will  increase  as

5

Content accessible by alternative platforms.

11

                                                
new  applications  requiring  high-speed  connections  are  developed  for  Internet
distribution. The development  of  new  content, applications  and  services  will  in  turn
be stimulated by an increase in broadband availability.

Many interesting and attractive services can be offered by the public sector which can
substantially improve the way it interacts with citizens and firms. The development of
"e-government",  "e-health"  and  "e-learning"  will  improve  standards  of  living,  and
potentially  improve  quality,  productivity  and  social  inclusion.  The  Commission
recently adopted an e-learning programme.

These  areas  are  the  main  targets  of  the  eEurope  initiative.  The  Commission  is
collaborating  with  Member  States  to  exchange  good  practices  and  carry  out
benchmarking exercises.

22-23 May 2003: Brussels,  e-health awards at the  ministerial conference  on  the
same subject organised by the Commission and the Greek Presidency.

.

3-4  July  2003:  Como,  e-government  awards  at  the  ministerial  conference
organised by the Commission and the Italian Presidency.

The public sector  can also help  the  development  of broadband  services and content.
As  a  major  owner  of  rights,  governments  can  have  a  positive  impact  by  facilitating
access  to  publicly-owned  content  and  information  under  predictable  and  fair
conditions.  A  good  example  would  be  tourist  services  that  private  companies  might
offer  combining  public  sector  information  on  geography,  cultural  sites,  traffic,
meteorological  conditions  etc.  The  Commission  has  proposed  a  draft  Directive  to
establish such predictable and fair conditions, which is  currently being  examined  by
Parliament and Council6 .

Final adoption of the Directive on the re-use of public sector information by the
end of 2003.

Finally, the European Union is directly encouraging the provision of content through
the programme e-Content (a call for proposals was launched in December 2002). The
development  of  new  content,  services  and  applications  will  also  continue  to  be
supported by other ongoing programmes such as eTEN, IDA and IST.

3.5

Security

The  rollout  of  innovative  technologies  such  as  broadband  and  3G,  as  well  as  the
development  of  new  content,  applications  and  services,  will  bring  new  security

6

COM(2002) 207 final - 2002/0123 (COD).

12

                                                
challenges. Addressing security issues is also crucial to stimulating demand for  new
electronic communications services.

Security  of  networks  and  communications  is  a  major  area  of  concern  for  the
development  of  the  digital  economy.  Networks  and  information  systems  are  now
supporting services and carrying data of great value which can be vital to other critical
infrastructures.  Increased  protection  of  the  networks  and  information  systems  is
therefore  necessary  against  the  various  types  of  attacks  on  their  availability,
authenticity, integrity and confidentiality.

Mobile  handsets  with  their  smart  card  functionalities  could  help  to  significantly
upgrade  the  current  arrangements  for  checking  authorisations  to  access  particular
services  or  sites.  It  would  be  useful  to  fully  exploit  this  potential  to  create  an
environment where individuals, firms and public authorities will use communications
technologies with greater confidence. The Commission will soon convene a workshop
to review progress in this area.

Overall  security  of  networks is also improved  by  ensuring  that  Member  States  have
the  appropriate  means  to  prevent  and  combat  any  form  of  criminal  activity  against
networks.  The  Commission  has  adopted  a  proposal  for  a  Council  Framework
Decision7  for  approximating  national  criminal  laws  relating  to  attacks  against
information  systems,  with  a  view  to  further  facilitating  police  and  judicial  co-
operation  between  Member  States  in  this  area.  It  is  essential  that  this  proposal  be
adopted as soon as possible.

June 2003: final adoption of the Council Framework Decision on attacks against
information systems

The spectacular growth of attacks and fraud conducted on electronic communications
in the recent  years threatens  to  undermine  consumers’  confidence  in  online  services
and  the  effective  functioning  of  electronic  markets.  Governments  are  intensifying
efforts to co-operate across borders to protect users. To improve the overall security
of networks and information systems in the EU, the Commission has recently adopted
a proposal to establish an European Network and Information security agency, which
should  become  a  centre  of  excellence  for  cyber  security  matters.  It  is  of  crucial
importance that this agency becomes operational as soon as possible.

End of 2003 : final adoption of the Regulation setting up the European Network
and Information Security Agency.

Communication networks are global, and security issues highlight the need for closer
international  co-operation  and  for  a  common  approach.  Although  many  initiatives
need some adjustment to local environments, it is clear that international co-operation
should be more widespread.

7

COM(2002)173 of 19.4.2002.

13

                                                
4.

RESEARCH AND DEVELOPMENT

The  electronic  communications  sector  is  a  dynamic  and  innovative  area,  where
Research  and  Development  (R&D)  plays  a  fundamental  role  and  determines
competitiveness. This is why the reduction in R&D investment brought about by the
financial  situation  of  the  sector  is  particularly  worrying,  as  it  risks  not  only  to
undermine the strength of the sector, but also Europe’s overall long-term competitive
position.

The European Union has been very well served by its commitment to research and is
still reaping the  benefits of past  Research Framework Programmes.  The outstanding
example being their contribution to the development of the GSM techniques.

It was recently decided to allocate € 3.6 billion to Information Society Technologies
(IST) under the 6th Framework Programme with a clear emphasis on communications
technologies and services in mobile, wireless, optical and broadband communications.
This  investment  is  critical  to  maintain  Europe’s  strengths  in  communication
technologies and will contribute to the development of the next generation of products
and services.

June 2003: second call for proposals under the work programme 2003 of the IST
priority of the 6th Framework Programme with emphasis on information society
services and applications.

In  addition,  the  two  new  instruments  of  Networks  of  Excellence  and  Integrated
Projects are well adapted to foster the kind of co-operative research needed to develop
strategic solutions to the outstanding technical  and  implementation issues within the
eEurope objectives.

More should be done, however. Because of the substantial reduction in private R&D
effort,  Member  Sates’  support  should  be  sustained  through  alternative  frameworks,
within  current  budgetary  constraints,  especially  in  relation  to  short-medium  term
issues (for example the CELTIC initiative within the Eureka framework).

5.

CONCLUSIONS

The electronic communications sector remains crucial for the European economy and
for  achieving  the  Lisbon  goals.  Overcoming  its  current  difficulties  will  help  restart
growth  and  create  new  employment.  It  can  also  accelerate  innovation  through  the
deployment  of  more  attractive  “next  generation”  services;  notably  those  for  public
services, business and work.

A stable regulatory environment that is needed for an increased momentum has been
put  in  place  at  European  level.  Member  States  are  now  called  on  to  undertake  full,
timely and effective implementation of this new regulatory framework.

Deployment of broadband and third generation mobile will be helped by the creation
of conditions that stimulate demand and supply e.g. by the development of attractive
content,  services  and  applications  and  by  investment  in  secure  multi-platform
broadband infrastructures. Full implementation of the eEurope 2005 action plan is the

14

necessary step to reinforce revenue growth. Developing national broadband strategies
with  clear  targets,  accelerating  the  provision  of  e-government  services  and
applications,  including  e-health  and  e-learning  can  generate  major  public  benefits.
Interoperable  and  open  platforms  will  facilitate  widespread  access  to  these  services
and foster a more inclusive information society.

Maintenance  of  a  European  knowledge  base  is  essential.  Despite  current  strains  on
public finances, Member States and the European Union should create the conditions
for  more  public  and  private  investment  in  education,  research  and  the  knowledge
economy, in particular to making full use of modern communication technologies and
to ensuring further innovation.

The  Council  and  the  European  Parliament  are  urged  to  give  their  support  to  these
actions as a key contribution to the Lisbon agenda.

15

Spring 2003

the Commission will provide Member States with guidelines on criteria and
modalities  of  implementation  of  the  Structural  Funds  in  support  of  the
electronic  communications  sector,  notably  broadband  fixed  and  wireless
infrastructure

Spring 2003

Commission to issue a Communication on barriers to widespread access to
Information Society services through open platforms.

Spring 2003

Necessary information on health-related problems of electro-magnetic fields
will  be  made  available  on  Commission  website  in  connection  with  the
World Health Organisation.

22-23  May
2003

Brussels, e-health awards at the ministerial conference on the same subject
organised by the Commission and the Greek Presidency.

June 2003

June 2003

June 2003

Mid-2003:

Final  adoption  of  the  Council  Framework  Decision  on  attacks  against
information systems

Second call for proposals under the IST priority under the Work Programme
2003  of  the  6th  Framework  Programme  with  emphasis  on  information
society services and applications

Communication to European Parliament and Council on  Interoperability  in
support of pan-European eGovernment services.

Commission  to  organise  a  workshop  on  secondary  spectrum  trading  and
spectrum usage.

3-4 July 2003

e-Government awards at the Como ministerial conference organised by the
Commission and the Italian Presidency

24 July 2003

Transposition of the new legal framework for electronic communications of
March 2002.

semester

2nd 
2003

Committees must be working effectively and the notification procedure must
function rapidly and efficiently

End 2003

End 2003

End 2003

All  Member  States  should  have  a  comprehensive  broadband  strategy  in
place

Commission  document  assessing  national  broadband  strategies  in  all
Member States to be presented

Member  States 
protection of the public in the mobile sector.

to  actively  support  standardisation  regarding  health

End 2003

Commission report on the state of deployment of 3G networks.

End 2003

Final adoption of the Directive on the re-use of public sector information

End 2003

Final  adoption  of  the  Regulation  setting  up  the  European  Network  and
Information Security Agency

16

End 2003

Commission  and  Member  States  to  work  out  coherent  approaches  to
deployment  deadlines  in  the  appropriate  fora  under  the  new  regulatory
framework

End 2003:

The  Commission  and  Member  States  to  provide  clarifications  on  issues  of
network infrastructure sharing.

Spring 2004

First eEurope 2005 benchmarking report

End 2005

All public administrations should have broadband connections

End 2005

Europe should achieve widespread access and aim to reach half of Internet
connections to be broadband by 2005.

17