Gunnar Hökmark - Opening speech at the Fiber-to-the-Home conference, London 20 February 2013

Checked against delivery

Ladies and Gentlemen,

I am very glad to be here today to present my views on why Europe needs a real push for the deployment of ultrafast broadband. I have three messages to deliver here today.

First of all, new services, innovations and information flows must grow, flourish and create economic growth without being dependent on technological speeds and capacities of the past.

Secondly, Europe needs to raise its game and ambitions if we are going to reap the benefits of the new digital revolution.

Thirdly, Europe must talk less about megabytes and more about gigabytes.

It took us 30 years from Thomas Alva Edison's invention of the electric bulb until we started to turn the lights downwards. The mindset of the candle light still kept us captured in the same way as cars and trains for a long time looked like horse carriages. Most new products or inventions use the design and logic of the past simply because our perceptions about the future are based on our experiences from the past.

Our minds and understanding about the future have been shaped by the last 30 years. That’s why we underestimate the pace and magnitude of change and overvalue the structures of the past

We still talk about emerging economies although they already have emerged. In Sweden we still talk about the Swedish car industry although it is mainly Chinese.We still talk about the US as the number one economy although European Union thanks to enlargements and the internal market is de facto the world's biggest economy. We still take it for granted that we are leading prosperity and welfare levels although the current crisis suggests that we are leading the global crisis.

The emergence of telecoms follows the same pattern regarding the 30 years delay. We still talk about distributing and coordinating frequencies every 4th year in the framework of the International Teleunion, although the market is changing so much faster. Our logic and understanding about the future in telecoms sometimes still seems to be based in a time when an International call was more exciting than Christmas.

If we look at the development over the last 30 years we have seen a new rapid emergence of telecoms connecting the world in a pace that no one could have believed, with capacities that no one would have dared to plan for and with services

that we either didn’t foresee or rather saw as phenomena's in the world of Flash Gordon. Just look at the figures:

Mobile devices will outnumber humans this year,

50 billion devices will be connected to the Internet in 2020.

In 2016 networks will be carrying 130 exabytes of data each year, equivalent to 33 billion DVDs.

The Internet has changed the logics of media, politics, revolutions, culture, businessand finance as well as the global economy and individual access to knowledge and information. The Internet has changed the world in the same way that electricity and the light bulbs changed the world more than 100 years ago.

The remarkable thing is that we now for the first time are seeing a development where technical devices and services no longer are designed and created from the logic of the past. Contrary to typewriters that later became computers, or mobile phones that were inspired by the traditional phone, today's tablets, smart phones or smart devices have been designed in line with the opportunities and the logics of today's modern information technologies. It is the information and knowledge services of today that are forming the design of the devices, not the logic of the past.

This leads me to my first conclusion that new services, innovations and information flows must be able to grow, flourish and create economic growth without being dependent on technological speeds and capacity of the past. We need new digital highways that can accommodate the growth generated by new services.

If Europe wants to be in the lead that is.

Because we all know what's at stake. We all know the enormous growth prospects for those economies that manage to tap into the new opportunities offered by the Internet. For example:

A doubling of mobile data use leads to an increase of 0.5 percentagepoints in GDP per capita growth rates

On average, ICT accounts for 6% of the EU’s GDP and the digital economy is growing at 7 times the rate.

Internet economy has accounted for 21 % of GDP growth in the world’s most advanced economies in the past five years. If Internet was a national economy, it would rank in the world’s top five

But the big potential of the Internet economy lies in the productivity gains that it can offer to other sectors. When moving towards a cloud based economy these productivity gains will be even bigger in the future

Europe needs to act now if we want to lead this development. if we want to transform the competitiveness of our industries and our services sector, if we want the telecom and Internet industry to prosper and invest in Europe, if we want to kick start European economy out of the crisis, if we want to attract investments from all over the world. If we want to create growth in Europe

Only if we want that of course. If we are happy to be number three or four we can just follow what others are doing. And they will do and do, and do and do.

This leads me to the second conclusion that Europe needs to raise its game and ambitions if we are going to reap the benefits of the new digital revolution

Just look around the world.

Only 20 % of the, 2.1 billion Internet users in the world comes from Europe.

Economies such as South Korea, Japan and Hong-Kong are connecting their markets with fiber reaching around 50 % of the households today.

China now has over 1 billion of mobile phone users

Russia has emerged as a clear fibre leader in our region. adding 2.2 million new fiber subscribers in the second half of 2012 – more than all of Europe’s 27 Member States combined.

This is all happening while only 1.3 % of Europeans use lines that deliver 100 Mbps or more

This is all happening while Europe's political vision is to deliver 30 Mbps to all and 100 Mbps to 50% by 2020.

This is all happening while Europe's telecom market is fragmented, suffering from 27 different rules, whether it is about copyright regimes or content distribution

Is this the right answer to getting Europe back on a growth path?

Is this the right answer to ensure that Europe becomes the leading global hub for the Internet economy?

Is this the right answer to drive investments to Europe?

No. It is not! The true logic of the global economy is convergence which means that everything can happen anywhere. And it will happen were the best conditions are available. I want Europe to be home to this new digital revolution that will develop even more rapidly in the next 10 years than what we have seen in the last 10 years.

This leads me to the third conclusion today; Europe must talk less about megabytes and more about gigabytes. In Japan we have already seen laboratory experiences transmitting information via fibre with a speed of 14 trillion bytes a second. That will not be the everyday reality tomorrow but tells us something of how rapidly the boarders and the limitations are changing. In South-Korea one Gigabyte is becoming normal. In the rural village of Sunne in the forests deep in Sweden they have one

Gigabyte. In a small community in Arkholme — a tiny village in the UK, they have one Gigabyte. And when I am at my country house in the most Southern Sweden I have a higher speed by 4G than at home in the centre of Stockholm with fixed broadband.

If Europe wants to be a global leader in the new Internet economy we must set ambitious targets. In 2020 I want all European to be connected to 100 Mbps, with at least 50 % of the households connected to 1 Gbps.

We have already done a lot...

The radio spectrum program for which I was responsible will play a crucial role in releasing more spectrum for mobile services. Europe has set a world leading target of identifying 1.200 MHz for mobile broadband. Europe must now deliver on these targets.

We have put new rules in place to get rid of the roaming problem. From 2014 consumers will be able to connect their ipad och iphones directly to a local operator within any Member State, without having have to roam back via their national network.

We have put in place some important competition triggers such as local loop unbundling

...But we need to do much more.

Investments in fixed lines are crucial if we should reap the benefits of the new digital revolution. As we move towards a cloud based universe consumers and business wants to access high-speed internet anywhere and everywhere without caring about the particular access. The fixed network needs the mobile and vice versa.

Take the example of Stockholm, the pre-existence of an extensive fibre network throughout Stockholm has allowed 4G mobile broadband competition to a degree not seen anywhere else in the world yet.

I have received the Industry Committees support for ensuring that networks which are funded via the EU budget should deliver 100 Mbps to rural areas and 1 gigabyte to urban areas. Although the money for funding telecommunication infrastructure has been severely reduced by heads of state in the latest EU budget compromise, I want these criteria's to be a template for (apply for all public) broadband investments in Europe.

At the same time, it is the market players that should continue to be the main drivers in Europe's broadband deployment. A fully competitive landscape is the best way to nurture innovations, lower consumer costs and better user experience

Updating old copper networks is not a long term solution. Instead of continuing invest in the copper network we must drive investments from the copper network, to fibre networks with unlimited speeds and capacity.

The fibre networks must be open and accessible for all services that want to use it.

We need to continue to open up spectrum for mobile services. The 700 Mhz band should be opened up for mobile services and licenses should be awarded on a pan European basis. More capacity is also needed in the 5 GHz band to enable a continued growth for short-range connections such as WiFi.

Finally, we need reforms driving content such as combating fragmentation in European digital markets, addressing especially fragmented IP rights

If Europe is to be home to the new digital revolution where new services and innovations create prosperity and economic growth, we need to have the fastest broadband speeds in the world. To generate growth and to get out of the crisis -Europe must display leadership regarding the internet, broadband, mobile data traffic and other services. All governments know that. The European Commission knows that. The industry knows it. And the rest of the world knows.

All we have to do is to act, and we have to act now.

END

GUNNAR HÖKMARK has been a Member of the European Parliament since 2004, where he is vice-chairman of the EPP Group. He is an active member of the ITRE Committee dealing with industry, research and science, telecom and energy. He was the European Parliament's rapporteur on the Radio Spectrum policy program and is currently shadow rapporteur for the eTEN report, which is part of the connecting Europe facility. Mr Hökmark is as well a member of the ECON committee dealing with economic policy public finances and competition legislation. He is Chairman of the Delegation to the EU-Croatia Joint Parliamentary Committee and in the EPP Group responsible of Neighbourhood and Enlargement policies. He is also chairing the working group on economic and social affairs in the EPP Party. Prior to his role in European politics, he was Secretary General of Sweden’s Moderate Party from 1991-2000.