Linking Linking the the Digital Ag Digital Agend enda to r to - PowerPoint PPT Presentation

SEDEC Commission Meeting, Committee of the Regions Brussels, 20 April 2016 Linking Linking the the Digital Ag Digital Agend enda to r to rur ural al and spar and sparsel sely popula y populated ted ar areas eas to to boost boost their their growt wth h pote potent ntial ial Rossella Soldi Consortium: Progress Consulting S.r.l. Progress Consulting S.r.l. (IT) (coordinator) Fondazione FORMIT (IT) (partner) Framework Contract CDR/DE/56/2013/1 www.progresscons.com www.formit.it PROGRESS CONSULTING

Rationale Ra tionale of of the the study study Main in Main inves estiga tigated ted to topic pic The he fi fina nanc ncin ing g of of br broad oadba band nd ne netw twor orks ks de deplo ployme yment/ nt/up upgradi ading ng by by LRAs LRAs in n those ar those area eas s co cons nsider idered ed un unpr profit ofitabl ble e by by priva private te op oper erato tors s (i (i.e. .e. rur ural, al, remo emote te an and d sp spar arse sely y po popu pula late ted d – RRS RRS – ar area eas) Framing aming ba backg kgrou ound nd DAE ta AE targe gets ts: : by by 20 2020 20, , 10 100% 0% co cover erage ge of of br broad oadban and d abo bove e 30 30 Mbp Mbps s • (‘fast’), and penetration of ‘ultra - fast’ broadband (i.e. subscriptions above 100 10 0 Mbp Mbps) s) in 5 in 50% 0% of of Eur Europe opean an ho hous useh eholds olds EUR 22 EUR 22 bill billion of ion of EU pub EU publi lic c fund funds s ar are e po poten tentiall tially y ava vail ilable ble for or th the e • up upgrad adin ing/ g/de depl ployme yment nt of of I ICT CT infr infras astr truc uctu tures es (2014 (2014 - 20 2020) 20) Est Estima imated ted fund fundin ing g ga gap p of of at t leas least t EUR 13 EUR 13 bill billion. ion. • Wha hat t is is impor importan tant? t? Ef Effi ficien cient t ac acce cess ss to to an and d ef effectiv ective e us use e of of EU EU fund funds, s, inc including luding for or th the e  le lever eraging ging of of pr priva ivate te in inves estme tments nts App ppraise aise th the e ne need ed for or ne new w initia initiativ tives es aimed aimed at t bo boos osting ting an and/or d/or en enhan hancing cing  ac acce cess ss to to/use /use of of EU f EU fun unds ds

Main par Main parts ts of of the the repor eport 1. Sta 1. S tate te of of th the e ar art t of of br broad oadba band nd co conne nnectivity ctivity in r in rur ural al ar area eas NGA NGA br broad oadba band d co cover erage, e, NGA NGA te techn hnol ologies, ogies, br broad oadba band nd access…evidence clearly points to a urban -rural al digita digital l divide divide an and d to to a dif a differ eren entia tiate ted d co cond nditio ition n ac acros oss s rur ural al ar area eas s 2. C 2. Cha harac acte terising rising br broad oadba band d deplo de ploymen yment t in R in RRS RS ar area eas 4. How 4. Ho w to to bo boos ost t ac acce cess ss to to Chall Cha llen enges ges to to de deplo ployme yment, nt, an and d us use e of of EU EU fund funds? s? ba barrier riers s to investments…but also ne also new w op oppor portu tuniti nities es (g (growth th A A few ew su sugge gestio stions ns on on en entr try- po poten tenti tial) al) for or bu busine siness sses es an and d po points ints on on th the e to top p of of w wha hat t is is citizen citiz ens s as as con confi firmed ed by by alrea alr eady dy ava vail ilable ble or or do done ne li lite teratur ture 3. W 3. Way ays of s of fi fina nanc ncin ing g th the e de deplo ployme yment nt of of broad br oadba band d infr infras astr truc uctu ture e by by LRAs LRAs Con Contr trac actu tual al ar arran angeme ements ts, , multi multi-st stak akeh eholde olders s en enga gage gemen ents ts, , st strate tegic gic fr framew amewor orks ks, , EU fund EU fundin ing g instruments…some suitable instruments are un under deruse used d

1. Sta 1. State of te of the ar the art: the urban/r t: the urban/rur ural al digital divide digital divide NGA broadband coverage, total and rural, by country, end of 2014 68% 25% 100% 300% Contribution of main NGA 90% technologies to rural coverage, by 80% 70% country, end of 2014 60% 50% 40% 30% 20% 10% 0% AT BE BG HR CY CZ DK EE FI FR DE EL HU IE IT LT LV LU MT NL PL PT RO SK SI ES SE UK VDSL FTTP DOCSIS 3.0

1. Sta 1. State of te of the ar the art: dif t: differ erentia entiated situa ted situation acr tion across RRS oss RRS ar areas (NUTS eas (NUTS3) 3) Share (%) of households with broadband NGA coverage in rural, remote and sparsely populated areas (NUTS3), 2014 connection (broadband access), 2015, NUTS3

1. State of 1. Sta te of the ar the art: our c t: our classifica lassification of tion of RRS ar RRS areas eas n° of NUTS3 per country classified as RRS areas High ICT preparedness: share of households having a broadband connection > 70% We identify NGA coverage < 35% 35% ≤ NGA coverage ≤ 65% NGA coverage > 65% six groups Low ICT preparedness: share of households having a broadband connection ≤ 70% of areas NGA coverage < 35% 35% ≤ NGA coverage ≤ 65% NGA coverage > 65%

2. . Char Characteris acterising ing br broadband deplo oadband deployment yment in RRS ar in RRS areas eas RRS ar RRS areas eas face ace challeng hallenges to to infr infrastr astruc uctur ture deplo deployme yment t and and barrier bar riers to to ICT i ICT infr nfrastr astructur ture in investme stments ts … Challenge Barrier Lower demand Capital intensive Fragmented demand Size of the market (niche markets) Higher deployment cost Lower revenue More difficult selection of the technology Higher risk Higher maintenance costs Longer pay-back period Lower availability of other existing infrastructures The competition dilemma …but the few e ew evidenc vidence points points to a to a positiv positive e socio socio-ec economic mic ter territ ritorial impact orial impact of of br broad oadband de deplo loyme yment on t on bo both th busine business sses es an and citiz citizens ens  growth wth poten potential tial Businesses (impact variable depending on sector) Citizens More high-paying jobs  higher incomes Employment (short-term/long-term) Growth in GDP Improved technological skills Incremental revenues Costs savings Improved competitiveness Access to better services Increased innovation Social inclusion and civic engagement

3. 3. Main tools Main tools & instr & instruments uments to f to finance inance br broadband oadband deplo deployment by yment by LRAs LRAs Some of the examples included in the report Contr Contrac actua tual l ar arran angem ements ts • Public Design, Build and Operate Norrbotten (SE), Wielkopolska (PL) Public outsourcing Nordhessen (DE) Subsidy to a network operator North Karelia (FI) Joint Venture Pays de la Loire (FR) Multi-stak Multi stakeh eholde lders s enga engageme ments ts • Community broadband Scotland (UK) Federation of LRAs Evora (PT), Siena (IT) Crowdfunding (Rural Nottinghamshire (UK)) Strate Str tegic ic fr framew amewor orks • RIS3  ESIF EU funding instr EU funding instrum uments ts • The European Fund for Strategic Investments (EFSI) The Connecting Europe Facility (CEF) The EIB Project Bond Initiative European Bank for Reconstruction and Development (EBRD)

4. Conc . Conclusions: gener lusions: general al remar emarks ks Higher spendin Higher spending g in RRS ar in RRS areas f eas for or br broadband oadband • infr infrastr astructur uctures es deplo deployment/ yment/upg upgrading ading is justified by is justified by social – besides social besides economic economic – consider considerations. tions. Some of Some of the contr the contractual ar actual arrangements angements and multi and multi- • stak stakeholder eholders enga s engagements gements r review viewed ed for ICT or ICT invest in estmen ments ts in R in RRS ar RS areas eas by L by LRA RAs w s wor ork bette k better than r than other others i s in inc n including social cons luding social consider iderations (e.g. P tions (e.g. Public ublic DBO DBO, , Feder ederation tion of of LRA LRAs). s). The use he use of of Str Structur uctural al Funds Funds is still significant f is still significant for or ICT ICT • investment in estments s (considering als (considering also o the Gener the General Bloc al Block k Exemption R Ex emption Regula gulation) but tion) but ther there e is r is room f oom for or impr improvement of ement of LRAs LRAs ’ capacity to use these funds. funds. Some other Some other tools/ tools/instr instruments uments may benefit fr may benefit from higher om higher • take tak e up b up by LR y LRAs As (e.g. eq (e.g. equity uity cr crowdfund dfunding) ing) or fr or from t om the he design of design of suppor supportiv tive e sc schemes (e.g. f hemes (e.g. for access or accessing ing EFSI). EFSI ).