Consultation on universal service principles in e-communications
Profile of the respondent
Do you reply as an individual or on behalf of an
organisation?
Name (individual / organisation)
Country of residence
Basic concept of universal service
1) In today's competitive environment, can the market be
relied on to meet demand for basic e-communciations
services from all sections of society, thereby ensuring
social inclusiveness?
2) If not, what is the best policy to allow the disabled,
those on low incomes and those living in geographically
remote or isolated areas to access and use basic e-
communications services?
Broadband
3) Broadband for all is a widely-stated policy objective at
national and European level. What role if any should
universal service play in meeting the broadband coverage
objectives in the EU?
4) What impacts could an extension of the role of
universal service to advance broadband development
have in relation to other EU and national policies and
measures to achieve full broadband coverage in the EU?
What other impacts would be likely to arise regarding
competition, the single market, competitiveness,
investment, innovation, employment and the
environment?
5) If universal service obligations shoudl prove necessary
to achieve the policy objective of broadband for all, at
what level (EU or national) should such obligations be
defined, taking into account the different levels of
market development across the current Union of 27
Member States?
6) If a common harmonised universal service needs to be
defined at EU level, should a mechanism be put in place
to balance the need for national flexibility and a
coherent and coordinated approach at EU level?
Financing of universal service
7) Irrespective of the scope of universal service, are
mechanisms whereby funding is provided by the sector
appropriate in the context of a regulatory environment
that seeks to eliminate distortions of competition and
promote market entry?
8) In the context of the roll-out of broadband in Europe,
is it still appropriate to limit the financial arrangements
of universal service to market players in the e-
communications sector, while this provision would have
wide-ranging benefits outside the sector, for instance,
the delivery of information society services and digital
content? Are other means of financing more appropriate?
Any other issues
Respondents are invited to raise any other issues they
might want to address in this consultation.
al service principles in e-communications
ofile of the respondent
Organisation / Company
Microsoft
BE - Belgium
oncept of universal service
The Commission can primarily rely on the market to meet
demand for basic e-communications services. Instances
of market failure should be met with appropriately
scoped regulatory interventions. As a result of more than
a decade of policies designed to promote competition
among e-communications service providers, the
dominance of former state monopoly telecommunications
providers is now considerably abated and therefore their
coverage obligations are increasingly open to challenge.
For instance, as of 1 July 2009, the incumbent fixed
operators’ share of the European DSL market is now
around 56%. Local loop unbundling is the main
wholesale access for new entrants with 71.4% of DSL
lines. Thanks to this investment and competition, fixed
broadband network coverage in the EU as a percentage
of the population stood at over 90% as of December
2007. Moreover, wireless carriers are introducing 3G
and 4G alternatives to fixed wireline broadband access
and license-exempt spectrum access is growing
exponentially.
Universal service is not synonymous with universal
service funding. Member States pursue a variety of paths
to achieving universal service, from a hands-off approach
allowing market forces to drive deployment and adoption
all the way to utilizing targeted public funding. In order
to further the goal of universal broadband availability
and adoption, the European Commission and Member
States will need to develop and implement a range of
policies, including, but not limited to, making available
more licensed and license-exempt spectrum below 1 GHz
for wireless broadband, removing barriers to broadband
deployment, promoting more efficient utilization of
network resources such as network sharing, pursuit of
public-private partnerships to promote adoption of
technology, and, in cases of demonstrated market
failure, making available targeted public funding to
support broadband network deployment. For more than
two decades, Microsoft has worked cooperatively with
representatives of the disability community,
nongovernmental organizations, industry leaders, and
governments to create a vibrant and healthy accessible
technology ecosystem. To that end, Microsoft supports
efforts to ensure that persons with disabilities have
Broadband
Broadband should be included in the definition of
universal service. Microsoft supports the goals laid out in
the European Commission’s Digital Agenda for Europe:
broadband access for all by 2013 and access for all to
much higher Internet speeds by 2020. Microsoft suggests
that the Commission add a goal for the majority of
European households to be subscribing to broadband
connections with actual download speeds of at least 100
Mbps and actual upload speeds of 50 Mbps by 2020. The
European Commission should begin by including
broadband in its definition of universal service.
Establishing broadband definitions at the Community
level is critical to ensuring that some broadband baseline
is available to consumers throughout the Community.
Including broadband in the definition of universal service
is appropriate in light of current and foreseeable market
conditions in the European Union. The Commission has
explained that, in the EU, universal service in e-
communications means “ensuring that all those who so
request are provided with those services essential for
participation in society and already available to the great
majority of citizens, either by the market or in the case
of market failure by public intervention.” Broadband
The Commission and Member States should primarily rely
on the market to advance broadband development and
can rely on a variety of other policies prior to resorting
to public funding, which has the greatest likelihood to
distort the competitive marketplace. Such a tiered
approach will minimize negative impacts to competition,
competitiveness, investment, and innovation. However,
as the Commission has recognized, in instances of clear
market failure, targeted public funding can promote a
single market, investment, and employment.
Please see our answer to Question 6.
While the Commission should include broadband in the
definition of universal service (for the reasons discussed
in our response to the Question 3), Member States should
remain free establish their own, more aggressive
broadband definitions and to target universal service
obligations to those areas where the market and other
policies fail to deliver affordable broadband to
consumers. Indeed, by including minimum data rates in
the definition of broadband, we are not proposing that
the Commission “mandate a specific data or bit rate at
Community level.” We would oppose any proposal that
would lock undertakings or consumers into a Commission-
specified broadband speed. The Commission should
continue giving Member States the flexibility to deploy
very high speed next generation access (NGA) networks,
in both unserved areas and those areas already served by
basic broadband infrastructure. A new recital introduced
in the EU Citizens’ Rights Directive allows Member States
to define nationally the minimum data rates of the
connection “which are sufficient to permit functional
internet access . . . taking due account of specific
circumstances in national markets, for instance the
prevailing bandwidth used by the majority of subscribers
ncing of universal service
Please see our response to Question 8.
Regardless of whether funded at the Commission or
Member State level, we support a model of targeted
public funding paid for through general taxation where
there is market failure to provide broadband services.
[Please see our response to Question 4 .] Funding
through general taxation is necessary to ensure that
competitive distortions are kept to a minimum and
market entry is promoted. Funding through general
taxation will also minimize social costs, leading to more
efficient allocation of resources. By contrast,
assessments limited to market players in the e-
communications sector will artificially suppress demand
for the very services that the Commission is trying to
promote. This is especially the case for the most novel,
innovative services and applications that tend to display
higher demand elasticity.
Any other issues
Please see our full response, with an introduction and
conclusion, in the attached document.