Presentation
Policy and Regulatory Approaches for Developing Telecom and IT Infrastructures to Address the Digital Divide

Mrs. Alison Birkett
Head of Sector, A5, DG Information Society, European Commission

The e-Europe Initiative represents efforts to ensure that the digital opportunity is available to all and that the new economy is realized. It is a substantive area of political action at the highest levels, having been supported by leaders in March 2000, with an action plan adopted in June 2000. E-Europe 2002 establishes an umbrella, involving common actions that member states, the EC and the private sector, with follow-up based on the benchmarking of national initiatives and progress, which are in turn based on data collection initiatives within the framework of the Action Plan.

EU leaders are convinced that a knowledge-based economy will be of great benefit for all, promoting business and jobs, as well as human progress, health, education and culture, and social inclusion. However, in order to achieve this, some essential conditions must be in place, including a powerful communication infrastructure, digital literacy among SMEs, a robust regulatory authority to structure competition, and a new mind-set.

The regulatory framework is seen as a key to the e-Europe 2002 Initiative. If the infrastructure is not in place, then no one can have access to the Internet or cheap telephony. In order to achieve some of the points of the e-Europe Action Plan, such as cheaper Internet access and accelerating access to high-speed Internet access, there are certain things that have to done in the area of the Telecom Regulatory Policy to ensure that competition is increased and prices are reduced, and in order to allow access in the last mile, through initiatives such as the unbundling of the local loop. This is expected to aid access to the Internet for schools and access to healthcare online, for example.

The overhaul of the existing telecom regulatory framework was called for to amplify the benefits of competition for users. In addition, the adaptation of the regulatory framework to convergence was required, because the existing framework, even though it was only put in place in 1998, had already been overtaken by the pace of technology-driven market change. Between 1995 and today, the communications sector has completely changed.

A new policy package has been proposed by the EC, which is currently being deliberated on by the Council of Ministers and the European Parliament. This new policy package looks at increasing the benefits of competition for users and catering to the new markets developing, which are largely unpredictable with many new players. New elements in the package include a technologically neutral approach, in the context of full competition, accompanied with a lighter regulatory burden. The question of lighter regulation is very important, because existing regulation could be too heavy-handed in the context of Internet services. New elements are streamlined licensing procedures and interconnection obligations linked to market dominance in particular markets. The main thrust of the new regulatory approach is, therefore, to regulate only where competition is not effective.

The European Union is also interested in bridging the digital divide between developed countries and developing countries, and also bridging the digital divide within developed and developing countries. Notably, the G8 dot force and the United Nations Secretary General's High Level Advisory Group on ICT are particularly active on efforts to bridge the digital divide. The European Community is convinced that ICT policy and a sound regulatory framework are key to bridging the digital divide and taking advantage of digital opportunities. The EC is also an active donor, with 132 million euros donated in grant for the restructuring of telecommunications from 1992-99. There is a European Program for Asia called Asia IT&C, a program launched in 1999, with a 19 million euro budget to fund approximately 100 projects over a five-year period.

Telecommunications and ICTs can make a tremendous impact on development in encouraging inward investment by international businesses, and enhancing the effectiveness of provision of services. In all cases development projects either depend on basic telecommunications infrastructure being in place, or their operation would be greatly improved if infrastructure was upgraded, made cheaper, or expanded geographically.

Many countries have already gone a long way in finding solutions to the digital divide. Much remains to be done to overcome skepticism on the role of IT in development, both in donor countries and partner countries. Donors and partner countries should work together to integrate IT into development programs.