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					                     … including satellites

                              Stefano AGNELLI
             Institutional Markets Development Director, Eutelsat
                       Coordinator of Space Policy, ESOA


                                  www.esoa.net


Digital Agenda Assembly
Financing and facilitating broadband projects
Brussels, 16 June 2011
                               Facilitating wide-scale broadband investment
                               DA broadband targets: the role of the market



        “In order to reach the ambitious DAE high speed
        broadband targets it is necessary to secure
        investments from all players - incumbent, new
        entrant, mobile, fixed and satellite. The different
        models pose different obstacles and
        challenges”



Source: Vice-President N.Kroes @ Every European Digital, European Parliament, Brussels, 31 May 2011
                                         Digital Agenda Scoreboard 2011

                 95% of Europeans now have access to broadband internet
                 infrastructure. That's a great achievement. But it still leaves a lot of
                 people - 10 million households, in fact - who we are still to reach.


                 […] all Europeans, 100% of them, should have access to basic
                 broadband by 2013. This is not the only target of the DA. But it is
                 perhaps one of the most important: it will be a solid foundation on
                 which we can build to deliver the remaining targets […]


                  […] we cannot forget about social inclusion. […] the benefits of the
                 internet must be spread to include everyone.



Source: Vice-President N.Kroes @ Every European Digital, European Parliament, Brussels, 31 May 2011
                                                               Rural broadband in 2009

Proportion of rural population
 covered by broadband (DSL)
           More than 95%
           80‐95%

           60‐80%
           Less than 60%


         Remark:
    Rural coverage still
      stands at only
          82.4%
     (Digital Agenda
       Scoreboard
      31 May 2011)


Source: P.Dunn (Cullen) @ Every European Digital, 31 May 2011 + comment
                                                                                  Do solutions exist?

                  The 10 M unserved households are, by definition, those which it has proved
                   the most difficult and expensive to cover, by and large rural and isolated


          Complementarity of networks to the benefit of the final EU citizen

          Infrastructures providing the same services with different architectures

                 Technologies like […] satellite […] can be the most cost-effective in such
                 areas where more common, landline solutions are not an option
                 Although wireless technology does not have the same performance as
                 advanced wired networks, it is good and getting better


          Answers exist: unserved citizens, especially in rural communities are being
          connected very quickly in some Member States



Source: Vice-President N.Kroes @ Every European Digital, European Parliament, Brussels, 31 May 2011
                                                 Total cost per home connected




Source: Innovative Satellite Technology Delivery for Digital Britain, S.Watts (Hughes), February 2010
                                                                              Can terrestrial wireless
                                                                                provide the answer?



                                           Low                                   High
                                           Cost                                Capacity




                                                           High
                                                         Coverage


Source: R.Womersley (Helios) @ Every European Digital, European Parliament, Brussels, 31 May 2011
                                                                                 Satellite broadband

                  New satellites offer downloads at 10 Mbps per second, which compares well
                       against many of the wired ADSL speeds consumers now receive

          ESOA operators (e.g. SES, Avanti) have invested in broadband satellite solutions
          For instance, the new BB generation satellite, Eutelsat’s KA-SAT enables immediate
          connectivity (up to 10 Mbps broadband service including triple-play) to over
          1million European households for 15 years




Source: Vice-President N.Kroes @ Every European Digital, European Parliament, Brussels, 31 May 2011
                                              Evolution of satcoms

                                        Classic                 Present
               One way
                                       Two Way               New Generation

How it works




Satellite




       Satellite technology evolves (cycles of 3-5 years) to meet user expectations,
      providing consistently better performance + lower terminal / subscription costs
                   Private investment for infrastructures

The satellite and its related terrestrial infrastructure (the most expensive
part of the solution) based on private investment (350M€ for KASAT)




                           LOCAL
                         EXCHANGE


              ACCESS                BACKHAUL         BACKBONE
                 Public subsidies for user access

The only investment required
for ubiquitous and immediate
broadband is in the purchase
and installation a user terminal

Still a high upfront expense
especially for low-income
users (one-off cost €300-500)

Subsidizing terminals, a
sound, user-focused way of
using available EU funds to
quickly and cost-effectively
reach the 2013 target of the
DA
                                                                                 State aid

Satellite broadband noted as:

    A complementary solution, alternative to the terrestrial backhaul, to
    overcome the digital divide
    Financing of users' access in areas where morphologic conditions
    make either impractical or economically unviable the set up of
    terrestrial facilities
State aid 646/2009 – Italy – National broadband plan for rural areas in Italy


    Where the costs of deploying fibre […] were prohibitive […] the
    preferred bidder will provide basic or advanced basic broadband
    services via satellite […] typically where existing broadband
    infrastructures […] cannot provide minimum download speeds of 2
    Mbps at affordable prices
State Aid 461/2009 – UK – Cornwall & Isles of Scilly Next Generation Broadband
Yes, you can …
… and it is simple …
            … to implement!




Your region has engaged in a series of public
initiatives with France Telecom to serve white areas
These initiatives do not allow us to interconnect
all citizens in an economically viable manner
Therefore, the Auvergne region subsidizes your
upfront expenses for a satellite kit and its installation
up to of 600€ TTC (subject to ineligibility to ADSL)
                                 ERDF absorption in Member States


                                                                                                           Allocated to selected operation / Adopted OPs
140%
                                                                                                           Average

                                                                                                            Countries which has adopted satellites as
120%                                                                                                       a complementary solution to the terrestrial
                                                                                                            backhaul to overcome the digital divide


100%



80%



60%



40%



20%



 0%
       AT   BE   BG   CB   CY   CZ   DE   DK   EE   ES   FI   FR   GR   HU   IE   IT   LT   LU   LV   MT     NL    PL   PT    RO    SE    SI   SK    UK




 Source: R.Niessler (DG REGIO) @ Every European Digital, European Parliament, Brussels, 31 May 2011 + comment
                                        Why is this not happening in all MSs?


          Imbalanced allocation of funds between the two targets 2013 vs. 2020

          Misinterpretation of EC rules such as market failure, technology neutrality,
          cost-effectiveness and in-place infrastructure

                 The EC takes a technologically neutral approach to promote innovation and competition.
                 […] keeping a close eye on state aid practices to ensure that certain wireless
                 technologies do not suffer undue discrimination.


          Lack of knowledge, both at political and operational levels, of technologies
          and the services they provide to the final users, and how to implement
          within the EU rules

                 Overcome the lack of technological awareness we often see in remote and rural areas.
                 I am confident that this can be done – but only if we use the full range of options. To
                 deliver that last 5%, we are going to have to get creative about the technology solutions.


Source: Vice-President N.Kroes @ Every European Digital, European Parliament, Brussels, 31 May 2011
                                                                                                      Our asks
    Guaranteeing level playing field for different technologies

          Clarity on eligibility of user access to subsidies in all Member States

          Recognition of the differences between satellite and terrestrial networks architecture - which yet
          provide the same services to the citizens (within EU, including guidelines for State aid for
          broadband networks, and MS official texts)

          Provide guidance and promote exchange of best practice on efficient and cost-effectively
          implementation (e.g. on the occasion of the EC bilateral meetings with MS)

          Use up-to-date data when identifying the most cost-effective and affordable solutions (e.g. in the
          State Aid notifications)

          Pragmatic, results-oriented, use of available EU / other public funds to achieve the 2013 objective

          Pay due attention to implementation and procurement processes to avoid unintentional
          discrimination (e.g. different performance requirements in the access and the backhaul portion)

                 The market and public investors cannot afford to rule out viable solutions
                 I am clear that to deliver "broadband for all" by 2013, to get 100% coverage at lowest
                 cost, we need to use all of the tools at our disposal. Only if we do that will we achieve
                 our goal, and get every European Digital
Source: Vice-President N.Kroes @ Every European Digital, European Parliament, Brussels, 31 May 2011
                                                            Secure future investments
                 With that clear mandate on basic broadband I hope the satellite industry will also have
                 an incentive to continue longer-term investment.
                 In the years to come we may even see speeds significantly higher – a possibility that
                 indicates satellite has a major and long-term role to play also in delivering higher
                 speed broadband in the future.



          Substantial investments required for development and procurement of
          future satellite generation will depend on

                    Avoidance of market distortion with fiber-only subsidies

                    Creation of a favorable EU policy framework for planning future
                    investments in satellite broadband

                    Clear market pull (user needs) and availability of funds

                    Adequate future EU budget dedicated for satellite broadband?

Source: Vice-President N.Kroes @ Every European Digital, European Parliament, Brussels, 31 May 2011

				
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