INFO-Document is encrypted Journal of Intellectual Property rights Vol 10 january 2005, p 34-43 Intellectual Property rights and Innovation in SMES in OECD Countries
The rise of the information and telecommunications industries and the increasing importance of the services sector in the economy of OECD countries
Information on the Internet â'European Patent office (EPO), Utilization of Patent Protection in Europe, EPO script
6 See †Best practices†section of WIPO€ s website www. wipo. int/sme/en/best practices
from A to B †typically on the web †can save people time and money,
website is to be set up giving an overview of and links to existing multimodal journey planners.
using state-of-the-art technologies such as radio frequency identification and EGNOS-or Galileo-based location devices e-Freight >A c T I O N 2. 2
ITS solutions making use of satellite positioning and mobile communications offer new opportunities for infrastructure
manufacturers, mobile network operators and EU Member States †and to facilitate the deployment of a Europe-wide
mobile networks; specifications for PSAPS, under the ITS Directive; and measures to mandate the introduction of ecall
phones and portable navigation systems, the so-called †nomadic†devices. It is important that such systems be used
information and communication systems †the European statement of principles †and is looking potentially to develop a set of regulatory measures to facilitate
principles on safe and efficient in-vehicle information and communication systems Safe onboard human†machine interfaces
Telecommunications Standards Institute †http://www. etsi. org) and CEN (the European Committee for Standardisation †http://www. cen. eu
http://www. cen. eu) and ETSI (the European Telecommunications Standards Institute †http://www. etsi. org) continued their
Secure Vehicle-to-X Communication systems, 2011†14) is now addressing this topic as well http://www. esafetysupport. org/en/esafety activities
in the form of a new web-based decision-support toolkit that will make it easier to find relevant and up-to-date
You can obtain their contact details on the Internet (http://ec. europa. eu or by sending a fax to+352 2929-42758
Priced publications •via EU Bookshop (http://bookshop. europa. eu Priced subscriptions (e g. annual series of the Official Journal of the European union
Internet: http://ec. europa. eu/research/research-eu EUROPEAN COMMISSION Directorate-General for Research Directorate H †Transport
Office CDMA 04/188 B-1049 Brussels Tel. 32-2) 29-68329 E-mail: Patrick. Mercier-Handisyde@ec. europa. eu
More information on the European union is available on the Internet (http://europa. eu Cataloguing data can be found at the end of this publication
•Various forms of wireless communication for both short-range and long-range data exchange UHF, VHF, Wimax, GSM, etc
•Computational technologies †the present trend is towards fewer and more costly microprocessors, allowing for more sophisticated applications such as model-based process
data (from devices such as radar, RFID readers, infrared-and visible-band cameras) and infrastructure-based data (from similar devices,
of publications issued by the European commission (see website: http://www. ec. europa. eu /information society/activities/esafety/index en. htm). However, the specific purpose of this
Website www. cvisproject. org/download/roadsense. pdf Safety was aâ major focus of automotive research in the latter
The in-vehicle technologies needed 3g telecom -munications for the accuracy and speed of delivery to make
Website http://www. transport-research. info/web/projects /Otherwise collectively described as Advanced Driver Assistance Systems (ADAS), these typically employ
Website http://www. transport-research. info/web/projects /As coordinator Luisa Andreone (CRF †Fiat Research Centre
Website http://intro. fehrl. org MISS Monitor Integrated Safety Systems The objective of MISS was to enhance the safety and
Website http://www. transport-research. info/web/projects /REACT Realizing enhanced safety and efficiency in European road transport
Motorola (Israel Total budget EUR 3. 70 million EU funding EUR 2. 00 million Start/end 01/01/2005 †31/12/2006
Website https://www. eurtd. org/quickplace/project-react IN T E L L IG E
Communication systems benefit increasingly from the multi-channel wireless connectivity offered by mobile telecommunications, low cost satellite technology, dedicated short range
communication (DSRC) and mobile wireless local area networks (WLAN. In conjunction with satellite positioning, this will support personalised applications such as emergency calls and
messages, traffic alerts, accident warning, speed alerts and eco-driving guidance Much can be accomplished using mobile communications alone,
but telecoms are unlikely to provide the split-second speed to react if aâ vehicle immediately ahead suddenly swerves or brakes.
Galileo and UMTS systems. Under the SAFETRIP project, low cost receivers installed in vehicles will provide aâ range of
Website www. safetrip. eu SARTRE Road awareness for driving via a strategy that evaluates numerous systems
Website www. sartre-project. eu EU (for which aâ deployment roadmap has been set out under the DG Mobility and Transport project EASYWAY
units, routers and antennae, so that they can exchange data with roadside infrastructure, display information to the
entertainment content delivered via theâ Internet IN T E L L IG E N T
-strations are advanced already well at project sites in Heathrow Airport (PRT), London, Rome†s new exhibition
Website www. citymobil-project. eu Following eventual take-up on aâ sufficient scale, traffic management systems will for the first time have the ability to
between city centres and airports or peripheral parking sites †ready for pick-up by customers
Website www. i-travelproject. com Trip advisors Another important direction for ITS research is the promotion
Website www. access-to-all. eu WISETRIP Wide scale network of e-systems for multimodal journey planning
Hellenic Telecommunications and Telematics Applications Company (Greece Total budget EUR 2. 12 million EU funding EUR 1. 44 million
Website www. wisetrip-eu. org IN T E L L IG E N T T
Website www. conduits. eu IN T E L L IG E N T T R
Website www. city-log. eu Intelligent freight distribution Optimisation of the movement of freight, both within the EU
through global telecommunication networks that support aâ wide range of information services for transport operators
Website http://heavyroute. fehrl. org Damage limitation The high weight of long range trucks poses some threats to
Website www. simbaproject. org Research cooperation with countries beyond the EU itself † inâ ITS,  as in many other fields †is aâ central element of
Website www. viajeo. eu STADIUM Smart transport applications designed for large events with impacts on urban mobility
Website www. stadium-project. eu/site IN T E L L IG E N T
On the positive side, ITS will enable connected vehicle-infrastructure communication systems to deliver real-time and context-sensitive information to enhance safety,
The evolution of mobile communication networks to 4g and beyond will deliver continuous connectivity to vehicles and travellers, giving access to on-line services via mobile Internet links
Multimodal traffic and travel information services will grow in quality and quantity †with mobile handsets becoming increasingly powerful personal mobility terminals.
on-line booking and payment facilities will be combined with location-based Web 2. 0 applications to facilitate ride-sharing,
mushrooming social networking websites C H A p T E R 8 Conclusions and the way forward
from the success of portable navigation systems and Web 2. 0 social networks •enhanced geo-localisation and guidance, also able to function in indoor/underground areas
GSM Global system for mobile communications HMI Human-machine interface I2v Infrastructure to vehicle ICPC International cooperation partner countries
RFID Radio frequency identification device RIS River information system RTTI Real-time traffic information SESAR Single European Sky air traffic management research program
UMTS Universal mobile telecommunications system V2i Vehicle to infrastructure V2v Vehicle to vehicle VHF Very high frequency VTMIS Vessel traffic management information system
WIMAX Worldwide interoperability for microwave access WLAN Wireless local area network Glossary IN T E L L
IG E N T T R A N S P O R T S Y
on the Internet (http://ec. europa. eu) or by sending a fax to+352 2929-42758
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PAGE 1 Raising European Productivity Growth Through ICT BY BEN MILLER AND ROBERT D. ATKINSON JUNE 2014
Internet, although that itself drives growth. 31 They include hardware, software applications and telecommunications networks, and increasingly tools that incorporate all three
components in them, such as computer-aided manufacturing systems and self-service kiosks These tools and can be used in the internal operations of organizations (business
the emergence of the Internet age is that it has had lower productivity gains from ICT
On a firm level, the benefits of Internet and computer use for productivity are also well
increased revenues 8. 6 percent and decreased costs 2. 6 percent through the use of Internet
Internet boom as well. In a study of 1, 955 European firms, Nurmilaakso finds that Internet access and standardized data exchange with trading partners contributed to
found that access to broadband Internet is associated with increases in productivity of 3. 6 percent for manufacturing and services firms and 62 percent for ICT firms. 69 Belgian firms
trail behind the United states in ICT adoption, business-to-business Internet use, business -to-consumer Internet use,
and staff ICT training. 97 (See Figure 12 Figure 12: Average of 4 indicators of ICT use (1-7, where is 7 highest use;
reducing the revenue for websites that rely on ad-based business models. 106 This appears to be one reason the EU lags behind the
United states in Internet companies. Campbell et al. examine the impact of privacy regulations in specific markets, finding that regulation may keep out new firms, some of
the effectiveness of IT investment include the new law requiring websites to obtain â€oeexplicit consent†before placing web cookies,
and the requirement that companies provide external human involvement as needed in any automatic, IT-enabled process that produces
particularly to smaller websites, while the latter is likely to delay progress in the emerging area of big data analytics
prevent or delay the adoption of new technologies, such as 4G LTE mobile broadband networks. The European union has been hampered by regulatory mandates that specified
and LTE was not initially allowed by these mandates; a similar problem occurred with the European 3g
rollout. Moreover, the United states was the first nation to take advantage of the â€oedigital dividend†from the DIGITAL TV transition.
spectrum for LTE and modifying regulations to permit LTE use on previous allocations is still underway in Europe.
less robust mobile communications infrastructure Labor market regulations have a large negative impact on ICT investment and the benefits
proposed data mining and data collection taxes, directed specifically at large internet companies such as Google and Facebook. 125 Higher taxes on ICT-producing companies
may raise the price of ICT goods and services for everyone else. Moreover, the existing
computers or telecommunications equipment and achieve service quality or efficiency gains. Instead they go through a process of organizational redesign
With the great success of some of the world ICT leaders, such as Apple, Google, Intel, and
technology industry areas such as high-speed broadband telecommunications, smart cards radio frequency identification devices (RFID), geographic information systems, mobile commerce, and the Internet of things.
In these cases, EU governments should use a wide PAGE 29 THE INFORMATION TECHNOLOGY & INNOVATION FOUNDATION JUNE 2014
including broadband telecommunications, Internet usage, and data. They should allow companies to more rapidly depreciate ICT investments
available revenue for websites and can cripple the growth of useful services Another example is the â€oeright to be forgotten†rule implemented by the European
and Daniel Castro, The Internet Economy 25 Years After. com (Information technology and Innovation Foundation, March 2010
http://www. itif. org/publications/internet-economy-25-years-after-com; Matthieu PÃ lissiã du Rausas et
ilibrary. org/docserver/download/9204051e. pdf? expires=1398953382&id=id&accname=ocid43017007& checksum=04b30d1bfc36e957bcfd995ccb443898. See also: Robert D. Atkinson and Andrew
http://www. persee. fr/web/revues/home/prescript/article/tiers 0040-7356 1988 num 29 115 3718 49. OECD Statextracts, Country Statistical Profile 2012 (Contributions to GDP growth:
Economic Benefits of the Internet In the United states, United kingdom, France, and Germany, Version 2. 0†(Cisco systems, Inc.,January 2002
http://www. netimpactstudy. com/Netimpact study report. pdf; Donald A. Johnston, Michael Wade and Ron Mcclean, â€oedoes E-business Matter to SMES?
Internet Business Solutions on European and North american SMES, †Journal of Small Business Management, 45,3 (July 2007): 354-361
Technological Diffusion and Economic growth under Network theory, †Telecommunications Policy 2014), doi: 10.1016/j. telpol. 2013.12.003
97. â€oenetworked Readiness Index 2014, †on the World Economic Forum website, accessed May 7, 2014
https://www. uschamber. com/sites/default/files/legacy/reports/020508 economicimportance final revi sed lr. pdf 109. L. Christensen et al.
February 2013, http://www. isg-one. com/web/research-insights/talking-points/archive/1302. asp 116.
Greg Sterling, â€oefrance Wants To Tax Facebook, Google †Personal data Collection, ††Marketing Land
January 21, 2013, http://marketingland. com/france-wants-to-tax-facebook-google-personal data -collection-31196; Jacob Albert, â€oefrance Wants to Tax Data mining,
http://citeseerx. ist. psu. edu/viewdoc/download? doi=10.1.1.278. 3739&rep=rep1&type=pdf 129. Taxation Trends in the European union:
See for example the sectoral focus on this European commission website: European commission Enterprise and Industry â€oeict for Competitiveness & Innovation, †(accessed May 16, 2014
An Input-Output Analysis, †Telecommunications Policy 37, no. 4†5 may 2013: 387†399 doi:
or Uber, or Google, or...†Bloombergview February 12, 2014, http://www. bloombergview. com/articles/2014-02-12/france-loves-tech-but-not
-amazon-or-uber-or-google-or -152. Miller and Atkinson, â€oeare Robots Taking Our Jobs, or Making Them?
United states, †Telecommunications Policy 29, no. 8 september 2005: 595†613 doi: 10.1016/j. telpol. 2005.06.002
in the EU€ (Oxford Economics/AT&T), accessed October 3, 2013 http://www. corp. att. com/bemoreproductive/docs/capturing the ict dividend. pdf
Commission website, last modified January 16, 2012, accessed April 18, 2014 http://ec. europa. eu/enterprise/newsroom/cf/itemdetail. cfm?
Part 1, †Innovation Files (blog), June 22, 2012 http://www. innovationfiles. org/in-praise-of-big-business-part-1
-ilibrary. org/sites/entrepreneur aag-2013-en/02/02/index. html 177. Ibid 178. Danny Leung, CÃ saire Meh,
â€oewill Not Let Norwegian Enterprises use Google Apps, †Datatilsynet, January 25, 2012 http://www. datatilsynet. no/English/Publications/cloud-computing/Will not-let-Norwegian-enterprises
-of-Google-Apps /184. â€oemerkel Proposes Secure European Web, †BBC News, February 15, 2014 http://www. bbc. com/news/world-europe-26210053
185. For example, Catherine Tucker has found that the EU privacy directive lowered online advertising effectiveness by 65 percent relative to the rest of the world.
http://www. ftc. gov/sites/default/files/documents/public events/fifth-annual-microeconomics -conference/tucker. pdf
David Streitfeld, â€oeeuropean Court Lets Users Erase Records on Web, †New york times, May 13, 2014 sec.
Mark Scott, â€oeuber Faces Rebukes in Europe, †Bits (blog) New york times, accessed April 18, 2014 http://bits. blogs. nytimes. com/2014/04/17/uber-faces-rebukes-in-europe
/191. â€oepillar I: Digital Single Market †Digital Agenda for Europe, †Enterprise and Industry, European
Commission website, accessed May 15, 2014, http://ec. europa. eu/digital-agenda/en/our-goals/pillar-i
Enterprise and Industry, European commission website, accessed May 15, 2014 http://ec. europa. eu/digital-agenda/en/our-goals/pillar-vii-ict-enabled-benefits-eu-society
FOR MORE INFORMATION, CONTACT ITIF BY PHONE AT 202.449.1351, BY EMAIL AT MAIL@ITIF. ORG, ONLINE AT WWW. ITIF. ORG, JOIN ITIF ON LINKEDIN
OR FOLLOW ITIF ON TWITTER@ITIFDC AND ON FACEBOOK. COM/INNOVATIONPOLICY EU and U s. Productivity Trends
Why Europe Needs to Accelerate Productivity Growth BOX 1: PRODUCTIVITY, INNOVATION AND COMPETITIVENESS ICT and Productivity Growth
FOR MORE INFORMATION, CONTACT ITIF BY PHONE AT 202.449.1351, BY EMAIL AT MAIL@ITIF. ORG,
ONLINE AT WWW. ITIF. ORG, JOIN ITIF ON LINKEDIN OR FOLLOW ITIF ON TWITTER@ITIFDC AND ON FACEBOOK. COM/INNOVATIONPOLICY
E-HEALTH flexible systems to be implemented in a relatively short time, with a focus on training and on integrating systems into the realities of the
Fax:++34 9544 88300 http://ipts. jrc. ec. europa. eu /http://www. jrc. ec. europa. eu
Telecommunications Manufacturing and industry Basic metals and of fabricated metal products Basic pharmaceutical products and pharmaceutical preparations
A great deal of additional information on the European union is available on the Internet It can be accessed through the Europa server http://europa. eu
You can obtain their contact details by sending a fax to (352) 29 29-42758
Global Internet consumer traffic growth trends over time 16 Figure 2: Global consumer Internet traffic 17
Figure 3: The evolution over time of consumer bandwidth demand during the busy hour 20
Predicted 100 Mbps FTTC/VDSL European household coverage in 2020 31 Figure 7: Percentage of households passed by cable (2010) 36
Predicted LTE coverage in 2020 39 Figure 12: Broadband adoption (lines) by technology and Member State 40
needed to achieve 4 Mbps download and 1 Mbps upload speed 42 Figure 15: The broadband deployment â€oegap†in the United states 43
Figure 16: Cost of covering different geotypes, from most dense to least dense, in Spain 44
Cost and ARPU per customer per month for FTTH P2p Ethernet at 70 %penetration 45
for a guaranteed 10 Mbps 61 Figure 25: Cost of meeting DAE objectives with and without cable in various scenarios 63
Internet households by average traffic per month 18 Table 2: Average and busy hour global consumer household bandwidth requirements 19
Typical maximum achievable speeds for various wireless solutions 33 1 EXECUTIVE SUMMARY The goals of the Digital Agenda for Europe (DAE),
only fibre but also cable and fixed and mobile wireless Cable can and does serve (1) as an alternative to making FTTX upgrades, especially in
broadband for all Europeans in 2013,2) deployment of 30 Mbps broadband capability to all Europeans by 2020,
and (3) adoption of 100 Mbps broadband by 50%of European households by 2020 The detailed meaning of these goals is,
ultra-fast broadband) is less than 2 Mbps The evolution over time of consumer bandwidth demand during the busy hour
Eurodocsis 3. 0 cable systems already comfortably exceed the 100 Mbps called for in the DAE. Even with current technology, cable networks are capable of meeting realistic
Mbps 3 Similar considerations apply to 4g wireless systems. There are surely limitations on the ability of wireless solutions alone to meet DAE objectives in dense population centres
but wireless might play a greater role in low-to-medium density areas than many have
assumed Broadband coverage in Europe today There are many different technologies that could be used to meet DAE objectives, notably
including the fixed telecommunications network, but also including cable television networks, as well as fixed and mobile wireless services
•Wireless systems benefit from deployment of LTE, and eventually from the deployment of LTE-Advanced
The relative cost of achieving each of the DAE objectives with each of these technologies
•For the fixed telecommunications network, there are significant uncertainties as to the quality of currently available data.
•For wireless broadband, the footprint of LTE and LTE-Advanced can be expected to be at least as broad in 2020 as that of 2g and 3g networks today
Achievement of full broadband coverage (and especially of ultra-fast broadband) in Europe is complicated by (1) variations in population density from region to region
solely on fibre-based telecommunications solutions is unlikely without some degree of public policy intervention and/or subsidy
of both (and, for that matter, also the evolution of the mobile network) is to a significant degree fibre-based
characteristics of coaxial cable systems with those of a high capacity fibre optic-based distribution system The upgrade to HFC cable systems to enable state-of-the-art bandwidth is comprised of
is substantially less expensive than deploying new fibre-based telecommunications networks, thanks to the benefits of sharing existing coaxial cable to multiple
LTE was more expensive than fixed solutions where population density exceeded 3, 000 inhabitants per square
DOCSIS 6/12/30 Mbps LTE-2. 6 GHZ EUR 6 Rethinking the Digital Agenda for Europe (DAE
Aggregate incremental cost of achieving DAE objectives for the EU as a whole, with and without cable Source:
and mobile compete Facilities-based inter-modal competition, even if limited to discrete geographic areas may have the tendency to constrain prices to reasonable levels across much larger
A more technologically neutral approach to the DAE, drawing on cable and LTE, could provide real benefits
device that is commonly provided by telecommunications operators; it connects multiple costumer digital subscriber lines to
KPN â€oekoninklijke KPN N. V. â€, Dutch telecommunications company 10 Rethinking the Digital Agenda for Europe (DAE
LTE/LTE -Advanced Long-term-Evolution, the newest standards for wireless communication of high-speed data Mbps Mega bit per second (one million bits per second
MDF Main distribution frame MDU Multiple Dwelling Unit MHZ Megahertz NBN National Broadband Network (Australia
PSTN Public Switched Telephone Network P2p Point-to-Point; an architecture based on a single dedicated fibre
RSPG Radio spectrum Policy Group RSPP Radio spectrum Policy Program SMP Significant Market Power; a firm is deemed â€oe†to have significant
market power if, either individually or jointly with others, it enjoys a position equivalent to dominance, that is to say a position
Wimax Worldwide Interoperability for Microwave Access WTP Willingness to Pay 4g Fourth-generation mobile communication standard
11 1 INTRODUCTION Key Findings â The goals of the Digital Agenda for Europe (DAE),
â Wireless also functions in a useful complementary role (1) to provide coverage in low density and/or high cost areas,(2) as a competitive alternative to fixed
The DAE includes full broadband availability in 2013,100%availability of 30 Mbps henceforth called â€oefast broadbandâ€) in 2020,
and 50%adoption of 100 Mbps (henceforth called â€oeultra-fast broadbandâ€) by 2020.2 The rationale for promoting widespread deployment
ultra-fast (30 Mbps or more) broadband, seems clear enough. Widespread availability of broadband is viewed widely as an important contributor to European economic well
telecoms broadband? To what extent do the existence and/or upgrade of cable infrastructure accelerate the deployment of telecoms broadband
Section 2 reviews the DAE objectives. Section 3 considers the benefits to Europe of achieving DAE objectives.
of broadband for all Europeans in 2013,2) deployment of 30 Mbps broadband capability to all European by 2020,
and (3) adoption of 100 Mbps broadband by 50%of European households â The detailed meaning of these goals is less clear.
is less than 2 Mbps â Ultra-fast broadband access is useful, but it is not necessary to assume that every
â Eurodocsis 3. 0 cable systems already comfortably exceed the 100 Mbps called for in the DAE.
â Similar considerations apply to 4g wireless systems. There are surely limitations on the ability of wireless solutions alone to meet DAE objectives in dense population
centres, but wireless might play a greater role in low-to-medium density areas than
•by 2020, to ensure that all Europeans have access to much higher Internet speeds
of above 30 Mbps, and •by 2020, to ensure that 50 %or more of European households subscribe to
Internet connections above 100 Mbps. 6 These goals would seem to be clear, but in fact a great deal of complexity and ambiguity
-fast broadband at speeds of 100 Mbps or more †to what degree might it be acceptable if they were concentrated in urban areas
growth in European Internet traffic over time, notably including the annual Cisco Virtual Networking Index (VNI.
estimate current and future Internet traffic by region, by application, and fixed versus mobile (see Figure 2). There is of course uncertainty with any projection of the future, but
Global consumer Internet traffic Source: Cisco VNI (2012). 9 Internet traffic growth trends in Western europe are expected not to differ greatly from
global trends. Western European IP traffic is forecast to grow at a CAGR of 27%per year
Web/Data Internet Video 29%CAGR 2011-2016 Petabytes per Month 22 %23 %54 %18 Rethinking the Digital Agenda for Europe (DAE
Table 1: Internet households by average traffic per month Number of households by Traffic per Month (Millions
of Households 2010 2011 2012 2013 2014 2015 CAGR Households generating more than 50 GB per month 62 79 105 126 150 175 23
Translating the above Cisco data into Mbps demand, during the average hour and during the busy hour, we have depicted the results in Table 2. Data networks are generally
>Mbps Busy Hr BW >Mbps 2010 2011 2012 2013 2014 2015 ---552 555 540 512 465 419
50 0. 15 0. 27 62 79 105 126 150 175 100 0. 31 0. 53 35 49 61 77 103 125
the average demand during the busy hour is well below 2 Mbps. This has important
share of total Internet traffic is expected to remain fairly constant over the next five years while the Central and Eastern European share grows somewhat.
Mbps 21 •Ultra-fast broadband access is useful, but it is not necessary to assume that
•Eurodocsis 3. 0 cable systems already comfortably exceed the 100 Mbps called for in the DAE.
•Similar considerations apply to 4g wireless systems. Key questions relate to the number of individual users (not households) who must be served by each tower
centres, but wireless might play a greater role in low-to-medium density areas than many have assumed
to do things that they were not previously able to do (e g. with slow dial-up Internet
Internet applications, services and content benefit by selling services to consumers or by selling advertising to a wide range of firms.
Telecommunications Policy, vol. 33; P. 471-485 20 See Fornefeld, M.,Delauney, G. and D. Elixmann (2008:
presented at the International Telecommunications Society 17th Biennial Conference, Montreal, Canada 22 See Liebenau, J.,Atkinson, R.,Kärrberg, P.,Castro, D. and S. Ezell:(
Impacts of Internet connectivity on irm productivityâ€; Motu Working Paper 09-15; Motu Economic and Public Policy Research, October;
and Internet Policy (TPRC), Arlington, Virginia September 23-25; 2005; revised January 17, 2006 25 Howell, B. and A. Grimes (2010:
Countries with large Internet economies, including the United States, Japan and Germany, are receiving large benefits from broadband.
countries with substantial competition between the fixed telecommunications network and cable. Hungary, where cable competition is strong,
and telecommunications for years) does not do conspicuously well. It may well be that these differences in broadband surplus are primarily a function of the level of competition
conventional broadband (at speeds of less than, say, 10 Mbps) and ultra-fast broadband at speeds of 30 Mbps or greater.
A notable exception is a study that Analysys Mason and tech4i2 completed on behalf of the European commission. 29 The report has not yet been
which takes into account the respective investment expenditures for electronic equipment, construction and telecoms 30 Intermediate results were presented at a public workshop in Brussels in February 2012.
Household Demand for Broadband Internet Service Final report to the Broadband. gov Task force, Federal Communications Commission;
notably including the fixed telecommunications network, but also including cable television, as well as fixed and mobile wireless services
â Wireless systems benefit from deployment of LTE, and eventually from the deployment of LTE-Advanced
â The relative cost of achieving each of the DAE objectives with each of these
â For the fixed telecommunications network, there are significant uncertainties as to the quality of currently available data.
â For wireless broadband, the footprint of LTE and LTE-Advanced can be expected to be at least as broad in 2020 as that of 2g and 3g networks today
â Achievement of full broadband coverage (and especially of ultra-fast broadband in Europe is complicated by (1) variations in population density from region to
that full achievement based solely on fibre-based telecommunications solutions is unlikely without some degree of public policy intervention and/or subsidy
30 Mbps deployment and 100 Mbps adoption, it is necessary to begin with a discussion of capabilities of the broadband technologies that are likely to be suitable for meeting
of conventional broadband (Section 4. 3) and of ultra-fast broadband at 30 Mbps and 100
Mbps (Section 4. 4 4. 1 Technologies for fast broadband Some have attempted to limit the discussion of Next Generation Access (NGA) in the
functionally equivalent to telecom fibre-based NGA today. Fixed and mobile wireless solutions also deliver capabilities that are relevant to the DAE,
and rapidly improving. It is thus useful at this point to briefly put these diverse technologies in perspective
they are able to deliver 50 Mbps provided the copper sub-loop is shorter than about 400-500 meters.
is based on fibre optic technology. In a Multiple Dwelling Unit (MDU), each home has a fibre access. 36
Alcatel-lucent antwoord op Ontwerpbesluit van de Raad van het BIPT van 20 december 2010 betreffende de
36 In a Gigabit Passive Optical Network (GPON), the typical bandwidth is up to 2. 5 Gbps downstream and up to 1, 25
Gbps upstream. In a GPON system, however, the bandwidth is shared by all users connected to a given splitter
Many have assumed consequently that FTTC/VDSL is relevant to 30 Mbps DAE objectives, but no more;
100 Mbps should be achievable. 38 Figure 6: Predicted 100 Mbps FTTC/VDSL European household coverage in 2020
Source: Yardley et al. 2012b 37 See RTR, â€oeconsultation input from RTR Gmbh (Austrian Regulatory authority for broadcasting and telecommunications) â€
input to â€oe European commission Consultation on costing methodologies for key wholesale access prices in electronic
4. 1. 3 Wireless solutions Wire less solutions based on Orthogonal Frequency Domain Multiplexed (OFDM technologies such as LTE or Wimax are becoming progressively more capable over
time, but they are ignored sometimes in discussions of the DAE because they are felt to
In the European Union†s Radio spectrum Policy Programme (RSPP), this is explicitly reflected in Recital 4:
which aims to deliver fast broadband internet in the future network-based knowledge economy, with an ambitious target for universal broadband coverage with speeds of at
least 30 Mbps for all Europeans by 2020. †39 See Chapter 5 for more details
â€oethe Mobile Communications Role in Next Generation Networks: The Case of Spainâ€, 22nd European Regional ITS Conference, Budapest
The Radio spectrum Policy Group (RSPG) has looked also at the issue, and observed â€oe The RSPP is also a key action in the Digital Agenda for Europe
fast broadband internet in the future network-based knowledge economy, with an ambitious target for universal broadband coverage with speeds of at least 30 Mbps for
all Europeans by 2020. †42 Steady technological improvements are noteworthy. The migration to LTE, and then
to LTE Advanced, represents a substantial increase in the nominal speed of wireless data transmission, and also in efficiency in terms of bits per Hertz.
Typical realistically achievable speeds are less than those that are theoretically achievable, but are nonetheless impressive.
LTE 10-100 Source: TNO/WIK. 43 As we explain in Section 4. 2. 4,
expected that substantially all wireless infrastructure in Europe will have been upgraded to either LTE or LTE Advanced
42 RSPG, â€oerspg Report on Improving Broadband Coverageâ€, RSPG11-393 Final, 16 november 2011 43 Nooren, P. J.,Marcus, J. S. and I. Philbeck (2012:
â€oestate-of-the-Art Mobile Internet connectivity and its Impact on e-commerceâ€, presentation to the IMCO Committee of the European parliament, 28 june 2012, WIK and TNO, available at
telecommunications lines is heavily dependent on upgrading the existing fixed network which in turn depends on the coverage footprint
47 A DSLAM is a network device that is commonly provided by telecommunications operators. It connects multiple
4. 2. 2 Coverage of telecoms networks In the Western European EU-15 Member States, we believe that the coverage of the
Cable Internet penetration as%of all households 2010 100 %80 %60 %40 %20 %0 %38 Rethinking the Digital Agenda for Europe (DAE
Remainder of internet-capable network DOCSIS3. 0 Percentage of premises passed 39 4. 2. 4 The potential for wi reless solutions
-effectively covered at 30 Mbps with the fixed network. Since the 100 Mbps target refers
only to adoption by 50%of households, we assume that there is no need for mobile to
meet this need. The 100 Mbps users can be located in areas that have higher density
In Australia, where an ultra-fast government-owned National Broadband Network (NBN is being deployed, 7%of the population is expected to be served by wireless or satellite
The coverage of LTE or LTE Advanced wireless in Europe can be expected to be at least
as great as that of 2g and 3g wireless today. 50 This seems to imply that most remote, low
density, or hard to reach locations can be served using LTE or LTE Advanced; however there will predictably be locations that cannot even be served cost-effectively by LTE
Figure 11: Predicted LTE coverage in 2020 Source: Yardley et al. 2012b 49 Nomadicity is the ability to use the service at different locations at different times,
but not the ability to use it while in motion 50 See Yardley, M. et al.
telecommunications (copper and in some cases fibre), cable, and sometimes other technologies as well. Note that Figure 12 reflects adoption rather than coverage
OPEX that would be required to deploy broadband (with 4 Mbps download and 1 Mbps upload speed) to all households in the United states. Underserved areas tend to be
OPEX needed to achieve 4 Mbps download and 1 Mbps upload speed Source: FCC: â€oethe Broadband Availability Gapâ€, April 2010
A striking finding is that a disproportionately large fraction of the â€oegap†is associated with covering a tiny fraction of the population.
Four fibre-based telecommunications architectures were considered: PMP GPON, P2p Ethernet, P2p GPON, and FTTB P2p DSL. 55 Neither cable television infrastructure nor
wireless was considered. The national territory was segmented then into twenty different areas (geotypes) based on population density
A key driver is the Average Revenue per User (ARPU. An ARPU of â 38 for ultra-fast
Ethernet covering the full national territory, an average ARPU of â 44 would be required see Figure 17.
Cost and ARPU p er customer per month for FTTH P2p Ethernet at 70 %penetration
network, close to the customer premises,(2) P2p Ethernet is Point-to-Point fibre access network with single fibres
per home and Ethernet switches concentrating the customer traffic at the central MPOP (ODF) sites.
but GPON splitters and OLT at the central MPOP sites, and (4) FTTB P2p DSL is Point-to-Point fibre access network with single fibre per building
remaining 30%of each cluster is assumed to be served (if at all) by mobile or cable This analysis (which is based solely on copper and fibre-based telecommunications
and does not otherwise reflect cable or mobile) has many implications that are probably relevant not only to Germany,
but to most of the Member States. Full achievement of the three DAE objectives based solely on fibre-based telecommunication technologies
without intervention or subsidy is unlikely in many Member States. Factoring cable broadband and wireless broadband into the analysis can help significantly to close this
for that matter, also the evolution of the mobile network) is to a significant degree fibre-based â Cable systems today have evolved into Hybrid Fibre Coaxial (HFC) networks that
high capacity fibre optic-based distribution system â The upgrade to HFC cable systems to enable state-of-the-art bandwidth is
deploying new fibre-based telecommunications networks, thanks to the benefits of sharing existing coaxial cable to multiple customer premises.
of both (and, for that matter, also the evolution of the mobile network) is to a significant degree fibre-based
The Cisco VNI report (2011) notes that Internet traffic demand, contrary to what many have assumed, is becoming more asymmetric
over time, not less. â€oewith video growth, Internet traffic is evolving from a relatively steady stream of traffic (characteristic of P2p) to a more dynamic traffic pattern. †With the
exception of short-form video and video calling, most forms of Internet video do not
gateways to the Internet (IP routers), and servers for providing a range of services. 60 Where there are multiple headends,
-regional backbones based on fibre optics •Regional headends (also called â€oearea hubsâ€: These headends are data
60 Examples are DHCP (Dynamic Host Configuration Protocol), games, web, e-mail (SMTP, Simple Mail Transfer
Internet International Gateways ON 2 ON n Fiber Ring HE1 Euro DOCSIS CMTS +Telephony equipment
+Router Connections Secondary IP Backbone Secondary Telephone Backbone Ring Primary Telephony Backbone Connections /Conversions Primary
IP Backbone NIUCM Teleph modem Telephony Switch Gateway Server Farms NOC Router 52 Rethinking the Digital Agenda for Europe (DAE
CMTS (Cable Modem Termination System. The CMTS is the intelligence of a broadband cable system. Key functions include (1) addressing the receiving party
A Eurodocsis 2. 0 system can deliver raw downstream bit rates of from 38 Mbps (64
-QAM) to 51 Mbps (256-QAM) in an 8 MHZ channel, and raw upstream bit rates of about
30 Mbps (64-QAM) in a 6. 4 MHZ channel. 64 61 Splitters are bidirectional passive components used to split
more than 200 Mbps through the bonding of four channels, or more than 400 Mbps through the bonding of eight channels;
and •Upstream: more than 100 Mbps through the bonding of four channels Technical progress as to DOCSIS capabilities is,
however, very dynamic. It is therefore to be expected that substantially higher raw bit rates will be available downstream and
This yields 400 Mbps of usable throughput downstream. Development of CPE capable of 16 channels downstream and 8 channels upstream is already under way.
Indeed, Virgin Media has announced plans to offer 1. 5 Gbps service to selected customers on a trial basis, 66 and other cable operators have demonstrated
65 Moreover, DOCSIS 3. 0 supports Internet Protocol Version 6 (IPV6 66 â€oevirgin Media ups broadband pace to 1. 5gbpsâ€, Seek Broadband, 20 april 2011
is able to broadcast download speeds of up to 4. 7 Gbps. See KDG Press release May 31, 2012
broadcasting infrastructure to a fully Internet-capable state-of-the-art Eurodocsis 3. 0 cable network, the first of which has long since been completed substantially throughout Europe
A number of Liberty Global networks, for example, are constructed using fibre rings that contain redundant fibre.
the 100 Mbps access speed threshold addressed in the DAE, even though a migration from today†s traffic patterns
LTE was more expensive than fixed solutions where population density exceeded 3, 000 inhabitants per square kilometre (Km2.
speeds of 6, 12 or 30 Mbps, and using wireless (LTE at 2. 6 GHZ
Population density plays a huge role in these costs. They found that LTE was more
expensive than fixed solutions where population density exceeded 3, 000 inhabitants per square kilometre (Km2.
DOCSIS 6/12/30 Mbps LTE-2. 6 GHZ EUR 61 If, however, one assumes that there is a requirement for guaranteed bandwidth of 10
Mbps, then the fixed solutions are greatly superior to wireless. LTE costs are highly sensitive to overall bandwidth requirements,
and thus even more sensitive than fixed network costs to the number and density of users in type of geographic area (geotype
Figure 24: Annualized cost (Present Value) of CAPEX per user (â) with a requirement for a guaranteed 10 Mbps
Source: Feijoo/Gomez-Barroso (2010a It is worth noting once again that Cisco VNI data strongly suggest that average data
consumption per household during the busy hour will be less than 2 Mbps, even in 2020. We are thus much closer to the situation of Figure 23 than that of Figure 24 for the
DOCSIS 6/12/30 Mbps LTE-2. 6 GHZ EUR 62 Rethinking the Digital Agenda for Europe (DAE
6. 2 Overall incremental deployment costs The recently published study by J. Hätã nen of the European Investment Bank (EIB), 76
Theoretical (advertised) download speed, with Internet centres in rural areas •Base: Theoretical (advertised) download speed
•Advanced: Actual (guaranteed) download speed •Maximum: Actual (guaranteed) download and upload speed In all scenarios except the first â€oeminimum†scenario, coverage to the household is assumed
to be required. These differing scenarios each implied different feasible solutions. For example, the Advanced scenario could be met with ADSL2, LTE, VDSL2, Eurodocsis
3. 0, FTTB, and FTTH, while the Maximum scenario could be satisfied only with pure fibre
solutions The EIB analysis considers the incremental cost in each Member State of achieving each of the three DAE objectives under each of the four scenarios.
incapable (at present, at least) of providing 30 Mbps, to say nothing of 100 Mbps, of usable symmetric capacity. 77
whether Europeans would accept the use of Internet centres (as envisioned in the Minimum scenario), except perhaps in the most exceedingly remote
30 Mbps of guaranteed symmetric bandwidth seems to be enormously in excess of the average busy hour of residential consumers, even in
The Basic scenario, where 30 Mbps and 100 Mbps can be interpreted as advertised speeds, are probably somewhat below the level of realistic consumer expectations in
the Cisco VNI 2011 analysis finds that Internet data traffic is become less symmetric over time, not more,
due to the increased use of video. â€oewith video growth, Internet traffic is evolving from a relatively steady stream of traffic (characteristic of P2p) to a more dynamic traffic pattern. â€
With the exception of short-form video and video calling, most forms of Internet video do not have a large upstream
Feijoo/Gomez-Barroso also found that completing the network with LTE would cost â 10.5 billion;
however, the more realistic design would use LTE only in low density areas below 50 inh/Km2
areas of â€oe2+†competition, where the fixed network, cable and mobile all compete versus â€oe1+†competition, where only fixed
and mobile compete. Facilities-based inter-modal competition, even if limited to discrete geographic areas, may have the
telecommunications network. 79 Deployment of a fibre-based National Broadband Network NBN) in Australia comes at the expense of inhibiting inter-modal competition in order to
79 Both NTT East and West have an FTTB/FTTH market share of more than 95%in their respective geographical footprints
internet accessed over legacy telephone copper and TV cable networks. †70 Rethinking the Digital Agenda for Europe (DAE
wireless helps deliver them. Already, wireless solutions are essential for getting basic broadband to those in rural areas where wired
Already today, in some places, 4g offers those speeds †if not higher. I also want at
particular Fibre-to-the-Home, upgraded Cable, Fibre-to-the-Cabinet and LTE. †81
can be very cost-effective in delivering higher download capacity. †82 7. 2 Societal welfare benefits from facilities-based competition
telecommunications incumbents, but it is a valuable complement to traditional regulatory mechanisms. Notably, since facilities-based competition is market-based,
Mobile Broadband Boost, †2012 Mobile World Congress Barcelona, 27 february 2012, available at http://europa. eu/rapid/pressreleasesaction. do?
In Germany, Deutsche telekom writes: â€oe†Cable network operators are no longer small players. They acquire every second new customer. †Therefore,
such as LTE. †85 They go on to provide concrete examples of their intent to threaten the
http://blogs. telekom com/2012/08/16/telekom-bringt-wettbewerb-in-monopolstrukturen/./â€oeauch auf diesem Markt sind die Kabelnetzbetreiber
Breitbandtechnologien wie LTE. †86 Interview with Swisscom CEO Carsten Schloter, Edition 28/2008: Die Weltwoche, â€oewir haben ja teilweise massiv
between areas of â€oe2+†competition, where the fixed network, cable and mobile all compete
and mobile compete. Facilities-based inter -modal competition, even if limited to discrete geographic areas, may have the tendency
89 Feijoo and Barroso, op cit. Note that the figure shows a maximum speed of 30 Mbps
today, however, cable broadband offers of 100 Mbps or more are commonplace in many European countries
Impacts of Internet connectivity on irm productivity; Motu Working Paper 09-15; Motu Economic and Public Policy Research
The economic impact of fi xed and mobile high-speed networks, in: Producti -vity and growth in Europe:
Telecommunications Policy, vol. 33, P. 471-485 Lehr, W.,Osorio, C.,Gillett, S. and M. Sirbu (2006:
State-of-the-art Mobile Internet connectivity and its Impact on e-commerce, presentation to the IMCO Committee of the European Parli
Internet Service; Final report to the Broadband. gov Task force, Federal Communications Commission, 3 february Radio spectrum Policy Group (2011:
RSPG Report on Improving Broadband Coverage RSPG11-393 Final, 16 november 76 Rethinking the Digital Agenda for Europe (DAE
Austrian Regulatory authority for broadcasting and telecommunications) November 2011 available at: http://ec. europa. eu/information society/policy/ecomm/doc/library/public consult
impacts, paper presented at the International Telecommunications Society 17th Biennial Con -ference, Montreal, Canada FCC (2010a:
Alcatel-lucent antwoord op Ontwerpbesluit van de Raad van het BIPT van 20 december 2010 betreffende de Analyse van de Breedbandmarkten, 18 february 2011
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