COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Connectivity for a Competitive Digital Single Market - Towards a European Gigabit Society
Date: 2016-09-14
Institutions: Directorate-General for Communications Networks, Content and Technology, European Commission
Subjects: Internet, competitiveness, innovation, regulation of telecommunications, single market, trans-European network, transmission network

EN 

   EN 

   EUROPEAN COMMISSION  Brussels, 14.9.2016  COM(2016) 587 final   COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Connectivity for a Competitive Digital Single Market - Towards a European Gigabit Society {SWD(2016) 300 final}  
 
 
1.  INTRODUCTION 

Over the last decade EU electronic communications policy has been successful in delivering 
more  competition,  lower  prices  and  more  choice  for  businesses  and  consumers.  However, 
consumers and businesses still face fragmentation of the electronic communications markets 
along  the  national  borders  and  the  current  regulatory  framework  has  not  systematically 
favoured deployment by all market actors of very high-capacity networks.  

Furthermore,  significant  changes  have  taken  place  within  the  electronic  communications 
sector  since  the  EU  telecoms  regulatory  framework  was  last  revised  in  2009.  Patterns  of 
consumption and needs are radically changing, with voice telephony increasingly replaced by 
fixed  and  mobile  Internet  access,  delivered  to  a  range  of  connected  devices  (smartphones, 
tablets,  computers,  TV)  and  offering  access  to  an  ever-increasing  array  of  digital  services1 
which  place  ever-increasing  demands  on  the  networks  over  which  they  are  provided.  And 
even more is needed in the years to come as services and applications based on the Internet of 
Things, cloud computing and virtual and augmented reality develop and grow.  

The full economic and social benefits of this digital transformation will only be achieved if 
Europe  can  ensure  widespread  deployment  and  take-up  of  very  high  capacity  networks,  in 
rural as well as urban areas and across all of society. One of the main aims of the European 
Commission's Digital Single Market Strategy of May 2015 was therefore to create the right 
environment  and  conditions  for  the  deployment  of  advanced  digital  –  very  high-capacity  – 
networks.  Since  the  telecoms  sector  today  is  an  enabler  for  the  entire  digital  economy  and 
society,  Europe  needs  to  act  quickly  to  secure  its  future  global  competitiveness  and 
prosperity. 

In  January  2016,  the  European  Parliament2  underlined  the  role  of  private  investment  in 
Internet  connectivity  networks  for  digital  progress  and  the  role  of  a  stable  regulatory 
framework  in  enabling  all  players  to  invest  in  all  areas,  including  rural  and  remote  ones. 
Likewise the European Council called in June 2016 for very high-capacity fixed and wireless 
broadband connectivity across Europe, as a precondition for future competitiveness, and for 
telecoms  regulatory  reform  to  incentivise  major  network  investments  while  promoting 
effective competition and consumer rights3. 

This Communication confirms the importance of Internet connectivity for the Digital Single 
Market and the need for Europe to deploy now the networks for its digital future. To this end, 
it sets out a vision for a European Gigabit society, where availability and take-up of very high 
capacity  networks  enable  the  widespread  use  of  products,  services  and  applications  in  the 
Digital  Single  Market.  This  vision  is  operationalised  through  three  strategic  objectives  for 
2025: for Europe's growth and jobs, Gigabit connectivity for places driving socio-economic 
developments; for Europe's competitiveness, 5G4 coverage for all urban areas and all major 
terrestrial  transport  paths;  for  Europe's  cohesion,  access  for  all  European  households  to 
Internet connectivity offering at least 100 Mbps.  

To  help  make  this  vision  a  reality,  this  Communication  proposes  a  series  of  initiatives 
designed  to  establish  the  right  conditions  for  the  necessary  investments  to  take  place, 
primarily  to  be  achieved  by  the  market.  These  consist  of  a  major  reform  of  the  regulatory 

1 For example social networks, mobile gaming, apps and video streaming, ongoing digitisation of economic activity and public services, IP-
based voice and messaging applications and remote storage and retrieval of data for consumers and businesses. 
2 European Parliament resolution of 19 January 2016 on Towards a Digital Single Market Act (2015/2147(INI)). 
3 European Council conclusions, 28 June 2016 (EUCO 26/16). 
4 5G refers to the next generation of network technologies offering prospects for new digital economic and business models. 

2 

 
 
                                                 
framework  for  electronic  communications,  in  the  form  of  the  accompanying  legislative 
proposal  for  a  European  Electronic  Communications  Code  (the  Code)5  and  BEREC 
Regulation, an Action Plan on 5G connectivity for Europe6 and further policy and financial 
measures,  at  Union,  national  and  local  levels,  including  a  "Wi-Fi  for  Europe"  initiative  to 
promote widespread availability of Wi-Fi connections for citizens across the EU. The aim is 
to boost Europe's digital economy and competitiveness, encourage communities to be active 
participants in the Digital Single Market and to meet Europeans' growing connectivity needs. 

2.  NEED FOR HIGH-PERFORMANCE INTERNET CONNECTIVITY IN THE DIGITAL SINGLE 

MARKET  

In 2010, the Digital Agenda for Europe defined objectives for connectivity by 2020: universal 
availability at  30  Mbps,  to  ensure territorial  cohesion,  and subscriptions  at  100  Mbps  by  at 
least 50% of European households, to anticipate future competitiveness needs. 

By  mid-2015,  fixed  networks  offering  at  least  30  Mbps  were  available  to  71%  of  homes 
across the EU, up from 48% in 20117. Almost half of EU homes were covered by networks 
capable of providing downlink speeds at 100 Mbps. Subscriptions at 100 Mbps+ are growing 
sharply, from a low base: 11% of all homes had such subscriptions by mid-2015. The growth 
trend  is  more  pronounced  in  Member  States  with  the  highest  100  Mbps  subscription  rate, 
suggesting a virtuous take-up circle. However, there are still substantial differences between 
Member States, and between urban and rural areas, in both coverage and take-up. 
While  basic  broadband8  is  available  to  every  European,  mainly  enabled  by  legacy 
infrastructures, this is no longer good enough for the ongoing digital transformation. Around 
half of Europeans own a smartphone, but cannot use its full potential because of major gaps 
in mobile data coverage and quality9. 

the  great  majority  of 

to  be  connected  worldwide  – 

Within  the  next  10  years,  up  to  50  billion  objects,  from  homes  to  cars  and  watches,  are 
them  wirelessly10. 
expected 
Transformative solutions based on Internet connectivity - including cloud computing, Internet 
of  Things,  high  performance  computing  and  big  data  analytics  –  will  transform  business 
processes and influence social  interactions.  Next  generation TV is  likely to  be a significant 
driver of bandwidth demand for households in the coming years. New digital applications - 
like  virtual  and  augmented  reality,  increasingly  connected  and  automated  driving,  remote 
surgery,  artificial  intelligence,  precision  farming  –  will  require  the  speed,  quality  and 
responsiveness that can only be delivered by very high-capacity broadband networks.11  

5 Proposal for a Directive of the European Parliament and of the Council establishing the European Electronic Communications Code 
6 Commission Communication "5G for Europe: An Action Plan". 
7 Digital Economy and Society Index: the coverage of fixed basic Next Generation Access (NGA) technologies (with download speeds of at 
least 30 Mbps). 
8 At a speed of at least 2Mbps.  
9 GSM Association: http://www.gsmamobileeconomy.com/GSMA_Global_Mobile_Economy_Report_2015.pdf, p. 8 and 13. 
10  Separate  reports  by  Ericsson,  Cisco,  GSMA  and  Gartner  foresee  a  massive  increase  in  such  connected  objects.  See  section  2.2.  of  the 
accompanying Staff Working Document. 
11 "Very high-capacity network" means an electronic communications network which either consists wholly of optical fibre elements at least 
up  to  the  distribution  point  at  the  serving  location  or  which  is  capable  of  delivering  under  usual  peak-time  conditions  similar  network 
performance in terms of available down- and uplink bandwidth, resilience, error-related parameters, and latency and its variation. Network 
performance can be considered similar regardless of whether the end-user experience varies due to the inherently different characteristics of 
the medium by which the network ultimately connects with the network termination point.  

3 

 
 
 
                                                 
The graph above illustrates the need for Internet connectivity speed and responsiveness for a 
single use of an application or a service. This need increases for multiple uses, which  have 
become the norm since a single user often has simultaneous uses (e.g. watching TV and using 
social networks) and a single connection often serves multiple users simultaneously (e.g. for 
households with children, SMEs and organisations like schools and libraries).  

Analysis  of  trends  in  technology  and  demand  indicates  that  provision  of  many  products, 
services and applications will only be sustainable where optical fibre networks are deployed 
up to a fixed or wireless access point close to the end user12. Fibre cables are currently also 
the recommended medium for the link between the core network and the final sub-networks 
for 5G wireless access13.  

The European Commission's public consultation on the needs for Internet speed and quality 
beyond 2020 and measures to fulfil these needs by 202514 reveals clear expectations for the 
quality  of  service  of  fixed  Internet  connectivity  to  improve  by  2025,  especially  regarding 
downlink  speed15  (above  1  Gbps)  and  responsiveness  (less  than  10  milliseconds),  and 
confirms  the  increasing  importance  of  features  other  than  download  speed16  for  both  fixed 
and  mobile  connectivity.  These  expectations  are  increasingly  being  reflected  in  Member 
States' national broadband plans17. 

12

  Optical  fibre  transmits  signals  at  the  speed  of  light,  and  has  an  efficiency  range  for  delivering  quality,  symmetrical  connections  over 
dozens of kilometres. The most promising copper-enhancement technologies currently have an effective range of c. 250 metres, and rely on 
fibre in the rest of the network. Upgraded cable (HFC) networks, using the DOCSIS family of standards to enhance performance, rely on 
fibre at least as far as the so-called optical node. 
13 Also known as "backhaul". See point 4.3 in the 5G Action Plan. 
14  The  public  consultation  took  place  from  11  September  to  7  December  2015.  A  full  synopsis  report  is  available  at 
https://ec.europa.eu/digital-single-market/en/news/full-synopsis-report-public-consultation-needs-internet-speed-and-quality-beyond-2020. 
15 59% of respondents think they will need fixed download speeds above 1 Gbps in 2025; only 8% think they will need download speeds 
below 100 Mbps in 2025. 
16 A large number recalled the importance of upload speeds and symmetry. 
17 Austria, Belgium, Denmark, Finland, France, Luxembourg, Slovenia, Sweden, see Figures 22 and 23 in the accompanying Staff Working 
Document. 

4 

 
 
 
 
                                                 
The state of broadband connectivity in Europe and the current trends in its modernisation will 
not  fulfil  the  growing  needs  for  better  and  faster  Internet,  enabled  by  very  high-capacity 
networks. They  are  needed for citizens  and  businesses  to  develop, deliver and enjoy online 
goods, applications and services across Europe. The success of e-commerce, the reliability of 
e-health applications, the user experience of video and audio content in gaming and streaming 
all depend on the quality of networks. 

Very  high-capacity  networks  are  also  necessary  to  maximise  the  growth  potential  of  our 
European  digital  economy.  Instantaneous  transmission  and  high  reliability  will  allow 
hundreds  of  machines  to  cooperate  in  real-time  in  industrial,  professional  or  domestic 
settings. Ubiquity will allow cars to drive autonomously. Responsiveness and reliability are 
key  factors  enabling  doctors  to  conduct  surgery  remotely  and  for  cities  to  adapt  energy 
consumption  or  traffic  lights  to  reflect  real-time  needs.  High  upload/download  speeds  will 
allow businesses to hold high definition (HD) videoconferences with multiple participants in 
different  locations  or  to  work  on  common  software  in  the  cloud.  Students  will  be  able  to 
follow courses provided by universities, located in other Member States.  

Very  high-capacity  networks  are  needed  to  ensure  territorial  cohesion,  for  every  citizen  in 
every community across Europe to be part of and to benefit from the Digital Single Market.  

For  Europe's  growth,  jobs,  competitiveness  and  cohesion,  very  high-capacity  networks  are 
becoming  a  necessity.  In  order  to  define  more  precisely  what  Europe's  future  Internet 
connectivity should look like, this Communication establishes a set of objectives for network 
deployment by 2025. They aim at building a Gigabit society, relying  on very high-capacity 
networks, that will ensure the benefits of the Digital Single Market for all. 

3.  SETTING A VISION AND OBJECTIVES FOR FUTURE INTERNET CONNECTIVITY IN THE DSM   

The targets set by the Digital Agenda for Europe show the benefits of establishing long-term 
objectives as they have progressively become a reference point for public policy, e.g. for the 
rules  and  guidelines  concerning  the  European  Structural  and  Investment  (ESI)  Funds,  the 
Connecting  Europe  Facility  (CEF)  and  State  Aid  for  Broadband.  Although  non-binding, 
almost  all  of  the  Member  States'  National  Broadband  Plans  have  by  now  embraced  those 
objectives18.  Private  sector  investment  plans  and  research  and  innovation  efforts  are  often 
also aligned with the objectives.  

technological  developments  and  future  needs 

While the 2010 connectivity objectives remain valid up to 2020 and have provided a stable 
policy outlook over ten years, matching the time horizon for infrastructure investments and 
identified  above,  now  calls  for 
the 
complementary  longer  term  objectives.  They  will  serve  as  a  measurable  and  achievable 
benchmark for decision makers in the private and the public sector, building on and boosting 
existing network investments up to and beyond 2025.  

3.1. Gigabit connectivity19  

To  optimise  investment  in  new  very  high-capacity  networks,  it  is  important  to  calibrate 
priorities. Physical places or online hubs where people gather or visit to learn, to work and to 

18 See section 3.2 of the accompanying Staff Working Document. 
19 Gigabit connectivity is to be understood as cost-effective symmetrical Internet connectivity offering a downlink and an uplink of at least 1 
Gbps.  

5 

 
 
 
 
                                                 
access public services and where a single connection provides Internet to multiple users drive 
socio-economic  developments.  Such  places  are  the  backbone  for  growth,  education, 
innovation and cohesion in Europe; in addition to businesses, they typically include schools 
and libraries, research centres, and various public services. In a digital world, they have to be 
at  the  cutting  edge  of  Gigabit  connectivity,  to  provide  access  to  the  best  services  and 
applications for European citizens.  
Innovative ways of teaching and learning20 need Gigabit connectivity to benefit from up-to-
date learning  materials, tools and techniques  and equip students  with  digital skills. Already 
today,  to  take  full  advantage  of  the  available  educational  services  on-line,  a  school  of  20 
classes with 25 students each would need speeds of 700 Mbps for simultaneous use.  
A growing number of businesses and industries, particularly digitally intensive enterprises21, 
will  need  Gigabit  connectivity  to  create  new  applications  and  business  models  to  produce, 
distribute and sell their goods and services more competitively. From manufacturing systems 
to  ordering  and  delivery  processes,  from  data  storage  and  analytics  to  internal  and  external 
communications,  their  future  competitiveness  requires  cost-effective  access  to  such 
connectivity.  

As  public  services  are  increasingly  going  online,  public  administrations  need  Gigabit 
connectivity  to  provide  seamless  services  to  many  citizens  and  businesses  in  parallel.  For 
transport  hubs,  Gigabit  connectivity  facilitates  the  use  of  intermodal  transport  based  an 
innovative applications.  

As  a  positive  side  effect,  by  offering  citizens  a  chance  to  try  and  test  the  most  advanced 
digital  tools,  including  by  offering  access  to  the  Internet  via  publicly  available  Wi-Fi 
connections, places like libraries, train stations or employment and training offices can also 
foster familiarity with and demand for Gigabit Internet access. 

Providing  Gigabit  connectivity  to  such  focal  points  –  e.g.  at  least  200,000  schools  and, 
200,000  public  authority  buildings,  as  well  as  business  parks  where  smaller  enterprises 
cluster - will reach significant numbers of users while containing costs, and will have positive 
spill-over effects on the wider economy and society. It is likely to stimulate the extension of 
local  fixed  networks,  which  in  turn  will  support  improvements  in  5G  wireless  coverage  by 
providing  greater  backhaul  capabilities.  Both  of  these  effects  should  lead  to  better 
commercial  fixed  and  mobile  offers  for  a  greater  number  of  smaller  enterprises  and 
households, while end users' exposure to competitive offers delivered over very high-capacity 
networks  is  likely  to  spur  demand,  thus  improving  the  economic  case  for  further 
investment22.  Investments  in  Internet  connectivity  for  these  socio-economic  drivers  will 
therefore benefit a much bigger potential  number of users in the European digital economy 
and society. 

Strategic  objective  for  2025:  Gigabit  connectivity  for  all  main  socio-economic  drivers 
such  as  schools,  transport  hubs  and  main  providers  of  public  services23  as  well  as 
digitally intensive enterprises. 

20 Opening up Education: Innovative teaching and learning for all through new Technologies and Open Educational Resources, COM(2013) 
654 
21 Enterprises with a high level of integration of digital technologies, like electronic information sharing or social media   
22 For evidence that in the telecom sector, demand responds to supply, and that limited downlink and uplink speeds may restrict the types of 
usage and applications that might otherwise emerge, see section 2.2 of the accompanying Staff Working Document. 
23 Covering: e.g. primary and secondary schools, train stations, ports and airports, local authority buildings, universities, research centres, 
doctors' surgeries, hospitals and stadiums. 

6 

 
 
                                                 
3.2. High performance 5G connectivity 

In addition to increasingly demanding connectivity for media applications, professional-grade 
communications 
transport, 
manufacturing, health as well as next generation safety and emergency services will require a 
seamless,  shared,  fixed  and  wireless  infrastructure  which  offers  a  range  of  customer-
controlled levels of reliability and quality of service, tailored to specific business needs.   

industrial  and  service  sectors  such  as  automotive, 

in 

5G communications will build on 4G mobile data connectivity as well as on fixed networks – 
allowing currently separate infrastructures to integrate their services into high-quality, global, 
ubiquitous  and  programmable  "virtual  networks".  It  will  require  early  exploitation  of  EU-
harmonised  radio  spectrum,  rapid  availability  of  new  spectrum  like  the  700  MHz  band  for 
rural coverage and indoor use in cities, and better coordination of spectrum assignment across 
Europe24  to  attain  early  leadership,  as  well  as  widespread  fibre  networks  for  very  high 
capacity backhaul from masts and small cells. 

The anticipated new services will share core infrastructure and a common 5G technology and 
will allow users and objects "on the move"25 to remain fully connected at all times, in urban 
transport,  along  inter-city  corridors,  or  even  in  the  air  (e.g.  drones  for  logistics).  Industrial 
zones, road corridors and train connections are expected to be key areas for the first phase of 
new  applications26.  The  viability  of  some  of  these  new  applications  will  require  the 
availability of 5G services simultaneously in all Member States to enable service continuity 
across borders and sufficient economies of scale. Therefore, the Commission proposes below 
a common intermediate objective to support the common timetable for network deployment 
proposed in the 5G action plan. 
A  recent  study27  estimates  that  successful  deployment  of  5G  could  bring  about  EUR  113 
billion  per  annum  in  benefits  in  four  industries  (automotive,  healthcare,  transport  and 
utilities),  with  benefits  widely  spread  over  business,  consumers  and  wider  society.  In 
addition, 5G deployment could support the creation of more than two million jobs in the EU. 

Strategic  objective  for  2025:  All  urban  areas28  and  all  major  terrestrial  transport 
paths29 to have uninterrupted 5G coverage.  

Intermediate  objective  for  2020:  5G  connectivity  to  be  available  as  a  fully-fledged 
commercial  service  in  at  least  one  major  city  in  each  Member  State,  building  on 
commercial introduction in 2018. 

3.3. Improved connectivity in rural areas 

In most rural and remote areas Internet connectivity can play an essential role in preventing 
digital divide, isolation and depopulation by reducing the costs of delivery of both goods and 
services  and  partially  compensating  for  remoteness.  Businesses  can  reduce  costs  through 
video-conferencing,  access  to  online  administration,  e-commerce,  or  data  storage  in  the 

24 In line with the proposed Code. 
25 5G will co-exist seamlessly with complementary technologies already being deployed, e.g. for short-range communication for vehicle-to-
vehicle and vehicle-to-infrastructure (ITS-G5).  
26 For terrestrial transport paths, and depending on the considered transport service, account will be taken of ongoing investments in C-ITS 
technologies while ensuring coordination with relevant stakeholders, Action 4 of the 5G Action Plan  
27 Identification and quantification of key socio-economic data to support strategic planning for the introduction of 5G in Europe, SMART 
2014/0008  
28 
As 
OECD_functional_urban_area_definition. 
29 Motorways, national roads and railways, in line with the definition of Trans-European Transport Networks. 

http://ec.europa.eu/eurostat/statistics-explained/index.php/European_cities_%E2%80%93_the_EU-

definition: 

per 

7 

 
 
 
                                                 
cloud.  Rural  development  and  modern  agriculture  rely  increasingly  on  online  applications 
supporting tourism, sensor monitoring of crops and use of drones in trade and agriculture.  

All European households, rural or urban, should have access to a minimum level of fixed or 
wireless connectivity. To be considered adequate in 2025, the connectivity will need to be of 
a much higher capacity than it is at present. Today, as Europe rolls out next generation fixed 
networks and 4G mobile, rural areas are lagging behind in both respects.  

Covering  the  last  5%  of  homes  and  businesses  remains  the  greatest  challenge,  but  a  cost-
efficient upgrade path is possible based on wireless as well as fixed-line solutions. Building 
on  the  Digital  Agenda  for  Europe  2020  targets,  100  Mbps  connections  should  be  made 
available to all households by 2025, with a further development path to higher capacity data 
provision. This objective is to be seen against a wider ambition that there should be access to 
mobile data connectivity throughout the territory, in all places where people live, work, travel 
and gather.    

Strategic objective for 2025: All European households, rural or urban, will have access 
to Internet connectivity offering a downlink of at least 100 Mbps, upgradable to Gigabit 
speed.  

4.  DELIVERING GIGABIT INTERNET CONNECTIVITY FOR THE DSM  

Reaching  the  above  vision  and  objectives  for  2025  is  estimated  to  require  an  overall 
investment  of  c.  EUR  500  billion  over  the  coming  decade,  representing  an  additional  EUR 
155 billion over and above a simple continuation of the trend of current network investment 
and modernisation efforts of the connectivity providers30.  

The policy and legal framework for investment therefore needs to be adapted to provide the 
conditions within which this additional investment can take place in a cost-effective way. 

4.1. A regulatory framework fit for connectivity  

The  2002  EU  Telecom  regulatory  framework  focused  on  creating  competitive  markets, 
opening  up  bottlenecks  and  enabling  access  to  key  infrastructure.  It  has  greatly  facilitated 
market  entry  and  ensured  more  competition,  lower  prices  and  better  quality  of  service  to 
consumers  and  businesses. While  continuing  to  safeguard  competition, end-user  choice and 
the  appropriate  level  of  consumer  protection,  the  rules  for  the  next  decade  will  simplify 
regulatory  intervention  where  possible  and  do  more  to  bring  about  stable  and  consistent 
conditions  for  investors,  operators and  service  providers  in  the  internal market. These  rules 
will  also  provide  stronger  incentives  for  primarily  market-funded  roll-out  of  very  high-
capacity  fixed  and  mobile  networks  by  a  variety  of  different  actors,  both  incumbents  and 
challengers,  while  facilitating  take-up  through  continued  competition  and  choice.  This 
enlarged  challenge  and  the  strategic  objectives  set  in  this  Communication  are  therefore 
reflected in the regulatory objectives proposed by the Commission in the Code. 

To  reflect  the  future  Internet  connectivity  needs  of  the  Digital  Single  Market,  the 
proposed  Code  includes  access  to  and  take-up  of  very  high  capacity  connectivity  as  a 
regulatory objective alongside the existing ones of promoting competition, contributing 
to the internal market and promoting the interests of citizens. 

30 Based on the study by Analysys Mason (SMART 2015/0068) and Commission estimates. See further the accompanying Staff Working 
Document, section 4.4. 

8 

 
 
 
 
                                                 
Incentives for deployment and take-up of very high-capacity networks in competitive markets 

To deliver appropriate incentives for investment in Internet connectivity, the proposed Code 
makes  targeted  changes  to  market  regulation  designed  to  enable  adequate  returns  on  new 
investments  relative  to  risks,  giving  Europe-wide  predictability  to  the  international 
investment  community,  while  leaving  adequate  scope  for  adaptation  to  localised  network 
conditions. 

Regulation  will  be  more  effective  if  it  is  based  on  in-depth  local  knowledge  of  an 
increasingly diverse network landscape, with a variety of different local, national and multi-
national  actors.  Interventions  will  be  tailored  to  geographic  areas  where  market  dominance 
persists  and  to  the  real  prospects  of  network  deployment  by  incumbent  and  alternative 
operators.  Mapping  will  allow  more  joined-up  policy,  identifying  private  investment 
opportunities or public investment needs, or areas where local initiative can remove obstacles 
or  promote  demand.  It  will  allow  regulators  to  increase  transparency  about  network 
deployment plans and to provide investors with more predictability and protection. This will 
be  especially  important  in  ensuring  that  less  densely  populated  communities  benefit  from 
better Internet connectivity. 

The  proposed  Code  requires  regulators  to  map  network  investment  intentions,  and 
enables public authorities to seek investors in under-served areas  

Infrastructure-based  competition  is  among  the  most  effective  ways  of  delivering  new  or 
upgraded  Internet  connectivity,  in  areas  where  population  (or  business)  density  can  support 
more  than  one  network.  Investment  in  new  very  high-capacity  networks  also  impact 
competitive dynamics by increasing possibilities for differentiation. Effective access to civil 
infrastructure  such  as  ducts  and  poles  held  by  undertakings  with  significant  market  power 
unleashes competitive and investment potential, and should be the first remedy considered for 
bottleneck problems. The need for other wholesale remedies to enable effective access-based 
competition  should  be  weighed  up  in  the  light  of  any  existing  commercial  agreements 
between operators and of the retail choices effectively available to end users. Thus, regulatory 
intervention  will  weigh no  more  heavily  than  necessary  on operators'  investment  decisions, 
while ensuring competitive outcomes. 

The  proposed  Code  prioritises  network  access  remedies  that  directly  support 
competitive  infrastructure  deployment  wherever  feasible,  and  will  reflect  the  retail 
choices already available to end users. 

In areas where infrastructure-based competition may not be realistic, co-investment by rival 
operators allows pooling of costs, reduction of risks, overcoming of scale barriers by smaller 
operators and sustainable retail competition over time which is less dependent on regulation. 
Significant market power operators who are open to such co-investment in very high capacity 
networks  should  therefore  be  allowed  to  differentiate  themselves  from  non-investing 
competitors; this can give all players an incentive to engage the necessary capital. 

Business  models  based  on  selling  wholesale  network  access  to  retail  operators  can  reduce 
competition  risks,  attract  "patient"  capital  which  supports  longer-term  investment  in  very 
high-capacity  networks  and  thus  push  out  the  dividing  line  between  commercial  and  non-
commercial deployment areas. This relatively new, but  growing,  business model deserves a 
clearer  and  simpler  regulatory  treatment  in  cases  where  such  operators  are  found  to  have 
significant market power. 

The  proposed  Code  establishes  predictable  regulatory  conditions  to  promote  co-
investment  and  wholesale-only  business  models,  facilitating  deployment  of  very  high-
capacity networks deeper into suburban and rural areas. 

9 

 
 
End-users in more challenging areas may be willing to invest upfront in very high-capacity 
fibre  connections  to  their  homes,  either  individually  or  as  part  of  demand  aggregation 
schemes.  This  financial  commitment  should  be  possible  on  the  basis  of  a  separate  contract 
allowing  for  affordable  long-term  instalments,  provided  the  end-user  retains  the  right  to 
switch service provider after a maximum of 24 months. 

The  proposed  Code  clarifies  that  long-term  instalment  payments  for  connections  are 
consistent with end-user protection rules. 

Spectrum rules for mobile connectivity and 5G 

The  EU  was  first  to  develop  4G  wireless  technology,  but  late  in  deploying  it  compared  to 
other  advanced  regions.  A  delayed  and  fragmented  assignment  of  the  relevant  spectrum  by 
Member  States  has  a  direct  negative  impact  on  wireless  network  coverage  and  penetration 
overall in Europe. Such delays, if repeated, will endanger the successful introduction of 5G in 
Europe and the deployment of new innovative services. 

In  addition  to  faster  processes  to  designate  spectrum  for  electronic  communications,  with 
clear deadlines for when the spectrum is to be made available to the market, investors in the 
next  generation  of  wireless  broadband  need  more  predictability  and  consistency  regarding 
future licensing models and the key conditions for assigning or renewing national spectrum 
rights.  These  include  a  minimum  licence  duration  to  ensure  returns  on  investment,  greater 
scope  for  spectrum  trading  and  leasing,  and  consistency  and  objectivity  in  market-shaping 
regulatory  measures  (reserve  prices,  auction  design,  spectrum  blocks  and  caps,  exceptional 
spectrum reservations or wholesale access obligations). On the other hand, operators should 
commit to use the spectrum assigned to them effectively.  

The  proposed  Code  establishes  key  principles  for  spectrum  assignment  in  the  Union, 
new  Union-level  instruments  to  establish  assignment  deadlines  and  licence  periods 
(minimum 25 years), and a peer review among national regulators to ensure consistent 
assignment practices. 

Coverage  obligations  in  spectrum  licences  are  an  efficient  tool  to  address  gaps  in  wireless 
connectivity  and  to  ensure  high-quality  coverage  of  the  EU  population  and  territory.  While 
coverage obligations are already widely used, they need to be better tailored towards the 2025 
objectives in this Communication, particularly regarding main transport paths and rural areas. 
Operators need to be able quickly to roll out denser networks based on small cells. Regulators 
need additional tools to address localised coverage gaps (white spots), such as facilitation of 
network sharing.  

The  proposed  Code  promotes  a  consistent  approach  to  coverage  obligations,  to  small-
cell deployment and to network sharing, thereby stimulating 5G deployment and rural 
connectivity. 

Shared  use  of  spectrum,  either  on  the  basis  of  general  authorisation  or  individual  rights  of 
use,  can  enable  more  efficient  and  intensive  exploitation  of  this  scarce  resource.  This  is 
particularly relevant for the new, very short-range ("millimetre") spectrum bands foreseen for 
5G  communications.  Users  of  radio  spectrum  under  general  authorisation  merit  greater 
regulatory protection from harmful in-band interference, obstacles to deploying Wi-Fi access 
points will be removed and end-user access to shared Wi-Fi connections will be easier. 

The proposed Code facilitates spectrum sharing in 5G networks, and promotes end-user 
access to Wi-Fi-based connectivity. 

10 

 
 
Incentivising take-up through competitive markets, consumer choice and affordable tariffs 

Very high-capacity networks only produce both a return on investment and wider economic 
benefits if they are taken up by citizens and businesses. While many different factors play a 
role, the rules need to ensure competitive markets and consumer choice. The proposed Code 
ensures inter alia that end-users can fully avail themselves of their switching rights, including 
when they contract for bundles of Internet access services or communications services  and 
other goods or services (such as devices or content). 

The proposed Code modernises end-user switching rights, including for bundles. 

Even as the focus turns to deployment and take-up of very high-capacity connectivity, no one 
should  be  excluded  from  access  to  basic  connectivity.  While  other  policy  instruments  are 
more suited to promoting network roll-out in excluded areas, universal service should be used 
to ensure that members of vulnerable social groups can get access to affordable basic services 
if the market does not deliver. 

The  proposed  Code  ensures  that  vulnerable  end-users  have  a  right  to  an  affordable 
connectivity contract. 

Rules adapted to new communications services and to the internal market 

Internet connectivity has enabled new forms of online communications services, with major 
benefits  for  end-users.  Sectorial  rules  should  not  distort  competition  between  traditional 
operators  and  new  communications  platforms,  but  should  address  the  remaining  end-user 
issues  in  a  proportionate  and  non-discriminatory  way  on  the  basis  of  the  relevant 
characteristics of the services concerned. Both service providers and end users should benefit 
on level terms from a truly internal market in services, with adequate protection in fields such 
as  security.  A  level  playing  field  should  also  ensure  that  network  operators  are  not  at  a 
disadvantage when they also provide communications services. 

The proposed Code secures a fair internal market through maximum harmonisation of 
the main sector-specific end-user rules, applicable as appropriate to different categories 
of services. 

A governance model that ensures regulatory stability and coherence  

An efficient governance system rests on the cooperation of strong and independent national 
regulators  with  adequate  powers,  working  together  with  the  Commission  in  a  reinforced 
institutional  structure  (BEREC)  with  corresponding  tasks,  and  more  structured  recourse  to 
strategic expertise as regards spectrum policy (through the RSPG). The common goal should 
be to ensure that, building on the experience and expertise developed by BEREC and national 
regulators  while  implementing  the  current  framework,  the  new  Code  is  applied  in  a 
consistent,  predictable  and  far-sighted  way  in  the  long-term  interests  of  end-users,  in  a 
competitive internal market. 

The  Code  proposes  to  establish  a  more  efficient  EU  system  of  electronic 
communications  regulators  to  ensure  consistent  implementation  of  the  regulatory 
framework in order to develop the internal market. 

11 

 
 
 
4.2. 5G Action Plan 

The  Commission  also  proposes  a  5G  Action  Plan  to  foster  a  coordinated  approach  for  the 
deployment  of  5G  infrastructures  which  will  play  a  major  role  in  Europe's  future  Internet 
connectivity.  It  will  open  up  entirely  new  opportunities  to  innovate,  not  only  in  the 
communications sector, but also throughout the whole economy and society. Establishing the 
new 5G infrastructure requires an appropriate degree of coordination between Member States 
and between relevant sectors to stimulate investments. The action plan aims to  realise such 
coordination based on a number of targeted actions, largely of a voluntary nature. Together 
with the proposed Code, it should give Europe the tools to lead the 5G race for the benefit of 
its international competitiveness. 

The  Commission  calls  on  the  Member  States  to  support  the  5G  action  plan  and  will 
work with all stakeholders to ensure its effective implementation. 

4.3. Public support to investment  

Legislative  and  regulatory  actions  can  remove  barriers,  enhance  competitive  incentives, 
provide  greater  predictability  for  investors  and  lower  costs  for  network  deployment.  The 
Internet  connectivity  objectives  for  2025  are  set  at  a  level  intended  to  bring  them  largely 
within reach for commercial operators. However, public funding will be necessary to improve 
the business case for private promoters in the most difficult areas.  

To  date,  funding  from  ESI  Funds  for  broadband  investment  has  largely  taken  the  form  of 
grants;  the  regulatory  framework  for  the  ESI  Funds  for  2014-2020  introduced  a  new 
possibility for use of financial instruments in this field, as underlined by the Communication 
on  the  Investment  Plan  for  Europe,  which  called  for  a  doubling  in  the  use  of  financial 
instruments  under  these  funds.  The  Connecting  Europe  Facility  and  the  European  Fund  for 
Strategic Investment provide customised financial instruments to small and large broadband 
projects respectively or can be combined to support dedicated funds and platforms. Technical 
assistance can be delivered through the European Investment Advisory Hub.  

Grant financing for broadband is often needed in the most remote areas, which may otherwise 
be  unprofitable.  However,  a  public contribution  by  way  of financial  instruments  can  attract 
additional long-term private investment by reducing the short-term risks for deployments in 
areas where the business case can be positive in the long term. By blending – i.e. combining 
both  forms  of  public  financing  in  areas  with  overall  commercial  potential  for  very  high 
capacity networks - grants can be limited to the minimum necessary to build a business case 
in unprofitable sub-areas, while maximising private sector involvement across wider areas.  

To  make  most  of  the  public  funding  leverage  effect  of  blended  investments  for  very  high 
capacity networks across Europe, Member States need to use an appropriate funding mix of 
grants and financial instruments and complementary actions between various EU and national 
financing programmes31. 

The Connecting Europe Facility (CEF) is the EU instrument specifically dedicated to support 
trans-European networks. However, its current budget is only able to support a narrow sub-
section  of  broadband  projects,  namely  innovative  projects,  based  on  state-of-the-art 
technology  and  with  a  potential  for  replicability,  and  using  only  financial  instruments.  The 

31 
http://ec.europa.eu/regional_policy/sources/thefunds/fin_inst/pdf/efsi_esif_compl_en.pdf  

complementarities 

information 

more 

For 

on 

between 

ESIF 

and 

EFSI, 

see: 

12 

 
 
 
                                                 
existing and future EU financing at all levels should be simplified and rendered more flexible 
to  enable  blending  of  financial  instruments  and  grants.  In  the  context  of  the  multi-annual 
financial framework mid-term review32, the Commission is proposing measures to facilitate 
the combination of the ESI Funds with EFSI in all fields, including broadband. 

In  preparing  the  financial  programming  post-2020,  the  Commission  will  weigh  up  future 
financial  support  needs  under  the  various  EU  investment  programmes  in  light  of  the 
objectives for 2025.  

The Commission calls on Member States to efficiently combine their public support via 
grants  and  financial  instruments  to  achieve  the  long-term  objectives  set  in  this 
Communication. 

The  Commission,  in  cooperation  with  the  European  Investment  Bank,  will  launch  by 
the end of the year a Broadband Fund, building on CEF and EFSI, and is exploring an 
initiative  on  financing  options  for  the  activities  related  to  the  Digital  Single  Market 
strategy,  including  on  blending  various  sources  of  funding  for  European  Internet 
connectivity projects of common interest up to 2025. 

In the  context  of  the  financial  programming post  2020, the  Commission  will  weigh up 
the  need  for  adequate  budgetary  resources  for  efficient  broadband  financing  in 
underserved  areas  under  CEF,  and  the  need  to  dedicate  ESI  funds  support,  possibly 
with  an  indicative  share,  to  the  digital  transformation  of  European  economy  and 
society.  

National  public  support  to  investment  which  is  not  on  market  terms  falls  under  State  Aid 
rules,  as  set  out  by  Article  107(1)  TFEU.  The  Broadband  State  Aid  Guidelines  enable 
public funding  for  the  deployment  of  networks  offering  substantial  improvements  over 
existing networks (the principle of "step change" in terms of broadband availability). Risks of 
distortion of competition are addressed through requirements such as using the least distortive 
public financing mechanism and ensuring open access to state-funded infrastructure. 

The Digital Agenda for Europe targets for 2020 are already reflected in the Guidelines: State 
Aid for a step change from basic broadband to basic NGA (offering typically from 30 Mbps 
and less  than 100 Mbps) is  deemed  to  counter market failure  in  the absence of commercial 
deployment  for  high  capacity  networks.  The  Guidelines  also  envisage  further  possible  step 
changes,  e.g.  upgrades,  through  extension  of  fibre  closer  to  the  end  user,  to  "ultra-fast" 
broadband of 100 Mbps or more, subject to verifying unmet demand in cases where existing 
or planned basic NGA network is already present. 

In assessing national plans to support very high-capacity networks, the Commission will take 
into  account  the  needs  and  objectives  identified  in  this  Communication  and  the  underlying 
evidence of long-term demand for such networks that could be under-served by the market. 
Following the principle of well-targeted State intervention limited to the minimum necessary 
to  correct  market  failures  and 
the 
Commission favourably 
funding 
across 
instruments and  areas  where 
to  ultra-fast  broadband 
networks. This  can reduce  the  risk  attached  to  investments  in  very  high-capacity  networks, 
thus lowering costs to the public while minimising any competitive distortions. 

to  achieve  objectives  of  European 

considers the  use  of  blended 

this generates  a step  change 

financing 

interest, 

32  Investment  Plan  for  Europe:  European  Fund  for  Strategic  Investments  to  be  extended  following  successful  first  year  (IP-16-1933)  and 
New guidelines on combining ESI Funds with the EFSI (IP-16-329) 

13 

 
 
 
                                                 
The  Commission  will  reflect  the  foreseeable  evolution  of  long-term  demand  when 
applying  the  "step  change"  approach  of  the  Broadband  State  Aid  Guidelines  in 
conjunction  with  the  strategic  objectives  set  in  this  Communication,  and  will  consider 
favourably efficient blended financing that contributes to lower the aid intensity and to 
reduce  risks  of  distorting  competition,  as  part  of  its  assessment  of  State  aid 
interventions. 

4.4. Wi-Fi for Europe 

Internet access via Wi-Fi easily connects multiple users, and many local authorities already 
give free Internet access in public spaces. The Commission wishes to support and encourage 
the  provision  of  free  Wi-Fi  access  to  citizens  in  all  public  services  (e.g.  public 
administrations,  schools,  libraries,  health  centres,  museums,  public  parks  and  squares)  to 
better  integrate  communities  in  the  Digital  Single  Market,  to  give  users  a  taste  of  Gigabit 
society, to improve digital literacy and to complement the public services provided in those 
locations.  

The  Commission  will  set  up  a  public  Wi-Fi  voucher  scheme  for  public  authorities  to 
offer free Wi-Fi connections in the centres of community life. 

4.5. Accompanying measures to support Internet connectivity and convergence 

Meeting  Europe's  Internet  connectivity  objectives  will  also  require  pro-active  national  or 
regional  policies,  building  on  their  National  Broadband  Plans33.  It  is  essential  to  increase 
planning transparency, strengthen multi-level governance and exchange best practices for the 
benefit of infrastructure providers, public authorities and connectivity users. 

The  Commission  calls  on  Member  States  to  review  progress  of  their  National 
Broadband Plans and update them by the end of 2017 with a time horizon of 2025, in 
line with the strategic objectives set in this Communication and the 5G Action Plan. 
As the Connected Communities initiative34, developed by the Commission in 2014, showed, 
there  is  a  high  level  of  interest  from  local  and  regional  decision  makers  in  increased 
cooperation  between  public  and  private  connectivity  actors,  more  technical  assistance,  and 
better  communication  of  best  practices  and  available  tools.  The  mapping  of  present  and 
prospective networks will also give to public authorities at all levels of government greater 
visibility on market failures and connectivity gaps, and an opportunity to take well targeted 
public  initiatives.  But  success  also  requires  their  involvement  in  encouraging  active 
participation by citizens in digital activities. 

The Commission, in cooperation with the Committee of the Regions, will set up by the 
end  of  2016  a  participatory  broadband  platform  to  ensure  a  high  level  of  engagement 
and cooperation between relevant public and private entities for broadband investment 
and progress in implementing national broadband plans. 

In order to facilitate the effective delivery of ESI Funds allocated for broadband projects, the 
Commission  proposed  the  establishment  of  an  EU  network  of  Broadband  Competence 

33 The development of National Broadband Plans is reported on by the Commission in its Digital Progress Reports.  
34  For  more  information  on  the  Connected  Communities  Initiative,  see:  https://ec.europa.eu/digital-single-market/en/news/connected-
communities-initiative. 

14 

 
 
 
                                                 
Offices  (BCOs)35.  It  aims  at  accelerating  exchanges  of  best  practices  between  Member 
States/regions  and  providing  technical  support  on  ways  to  invest  effectively  in  broadband 
projects, whenever possible in combination with financial instruments.  

The Commission calls on Member States  and regions to establish and support the  EU 
network of Broadband Competence Offices at regional/national level. 

Limiting the cost of civil engineering works – which represents up to 80% of investment in 
broadband networks – could further facilitate broadband roll-out. Directive 2014/61/EC36 (the 
Broadband  Cost  Reduction  Directive)  seeks  to  increase  the  sharing  and  re-use  of  existing 
physical  infrastructure,  across  various  sectors  (energy,  transport,  etc.)  and  to  facilitate 
synergies  with  public  works;  and  mandates  that  all  new  or  refurbished  buildings  be 
broadband-ready.  Cross-utilities  synergies  and  collaboration  are  sparking  increased  interest 
from other sectors and have already shown good results. The Commission urges the Member 
States to speed up the transposition and ensure the effective implementation of the Directive, 
so that the full potential of the measures, and in particular the cross-sector synergies, can be 
realised.  

In  line  with  the  Broadband  Cost  Reduction  Directive,  the  Commission  will,  by  1  July 
2018,  evaluate  its  implementation;  assess  the  impact  on  the  cost  of  EU-funded 
broadband  projects  and  issue  guidance  on  the  promotion  of  best  practices  to  further 
contribute to the long-term objectives set in this Communication. 

5.  CONCLUSION  

Internet  access  is  today  as  important  as  electricity  was  for  the  second  industrial  revolution, 
for  the  economy  and  for  society.  Very  high-capacity  Internet  connectivity  is  essential  to 
unleash  the  next  wave  of  competitiveness  and  innovation  and  to  allow  Europe's  businesses 
and  citizens  to  harvest  the  full  benefits  of  the  Digital  Single  Market.  This  Communication 
and  the  accompanying  measures  are  intended  to  provide  Europe  with  the  tools  needed  to 
bring this about. 

The  Commission  encourages  the  Member  States,  in  close  cooperation  with  all  relevant 
stakeholders,  to  engage  in  policy,  regulatory  and  financial  support  for  the  vision  of  a 
European Gigabit society contained in this Communication and invites:  

-  The European Council and the European Parliament to endorse the strategic objectives for 

Internet connectivity in the Digital Single Market;  

-  The  European  Parliament  and  the  Council  to  proceed  swiftly  with  the  legislative 
discussion  on  the  accompanying  proposal  for  a  European  Electronic  Communications 
Code with a view to reaching political agreement by the end of 2017, and implementation 
in the Member States well before 2020. 

The  Commission  will  report  on  the  progress  of  the  initiatives  presented  in  this 
Communication as part of its regular Digital Single Market reporting. 

35 For more information on the BCO initiative: https://ec.europa.eu/digital-single-market/en/broadband-competence-offices.  
36 Directive 2014/61/EU of the European Parliament and the Council of 15 May 2014 on  measures to reduce the cost of deploying high-
speed electronic communications networks. 

15 

 
 
 
 
 
                                                 
Delivering High-Performance Internet Connectivity for the Digital Single Market 

ANNEX  

Initiative  

Actions and Timeline  

Regulatory framework measures 

Legislative Proposal establishing the 
European Electronic Communications 
Code 

Legislative Proposal establishing the 
Body of European Regulators for 
Electronic Communications 

The European Parliament and the Council to 
proceed swiftly with the legislative discussions 
with a view to reaching political agreement by 
the end of 2017, and implementation in the 
Member States well before 2020. 

Support and other Measures 

Strategic objectives for Internet 
connectivity 

5G for Europe: Action Plan 

The European Council and the European 
Parliament to endorse by end of 2016 the 
strategic objectives for Internet connectivity in 
the Digital Single Market. 

Establishment of a common timetable and a set 
of enabling actions for the coordinated launch of 
5G networks in Europe.  

Broadband Fund, building on CEF 
and EFSI 

The Commission, in cooperation with the 
European Investment Bank, to launch a 
Broadband Fund by end of 2016.  

Financing options for the activities 
related to the DSM strategy 

Financial programming post 2020 

The Commission to explore an initiative on 
financing options, including on blending various 
sources of funding, for European Internet 
connectivity projects of common interest up to 
2025.  

The Commission to weigh up the need for 
adequate budgetary resources for efficient 
broadband financing in underserved areas under 
CEF, and the need to dedicate structural funds 
support, possibly with an indicative share, to the 
digital transformation of European economy and 
society. 

16 

 
 
 
Wi-Fi for Europe  

National Broadband Plans  

Participatory Broadband Platform  

EU network of Broadband 
Competence Offices at 
regional/national level. 

Evaluation of the Broadband Cost 
Reduction Directive and guidance on 
the promotion of best practices 

State aid 

The Commission to set up a Wi-Fi voucher 
scheme for public authorities to offer free Wi-Fi 
connections in the centres of community life. 

By end of 2017 Member States to review and 
update National Broadband Plans with a time 
horizon of 2025, in line with the strategic 
objectives set in this Communication and the 5G 
Action Plan  

The Commission, in cooperation with the 
Committee of the Regions, to set up by end of 
2016 a participatory broadband platform to 
ensure a high level of engagement and 
cooperation between public and private entities 
for broadband investment and progress in 
implementing national broadband plans. 

Member States and regions to establish and 
support, by end of 2016, the EU network of 
Broadband Competence Offices at 
regional/national level. 

The Commission, by July 2018, to evaluate the 
implementation of the Broadband Cost Reduction 
Directive, assess the impact on the cost of EU-
funded broadband projects and issue guidance on 
the promotion of best practices. 

The Commission to reflect the foreseeable 
evolution of long-term demand when applying 
the "step change" approach of the Broadband 
State Aid Guidelines in conjunction with the 
strategic objectives set in this Communication, 
and to consider favourably efficient blended 
financing that contributes to lower the aid 
intensity and to reduce risks of distorting 
competition, as part of its assessment of State aid 
interventions. 

17