THE BLOG
18/07/2011 06:41 BST | Updated 16/09/2011 06:12 BST

EU Telecoms and the next generation Internet

The FT reported on Thursday that the CEOs of Alcatel-Lucent, Deutsche Telekom and Vivendi called on the European Union to help cut costs and ensure investment in order to meet the aggressive EU broadband rollout targets. The European Commission wants at least 30 mps broadband into every European home by 2020.

The report, commissioned by Neelie Kroes the European commissioner for telecoms, brought together forty different stakeholders and companies to provide for a wide ranging view of how to achieve the targets through investment and innovation. In the end, only Alcatel-Lucent, Deutsche Telekom and Vivendi signed the report owing to tensions between US and EU companies.

The report calls for wide ranging proposals to foster investment in the next generation Internet infrastructure citing that it will cost €290 billon to bring new, superfast broadband to Europe. One proposal suggests the use of current cable and electricity infrastructure - namely ducts and poles - to lay fibre instead of creating new ones. Another proposal put forth advocates the lifting of regulatory burdens and taxes in order to increase investment. But the most contentious proposal is that ISPs start charging for guarantee delivery of high bandwidth content like YouTube videos. This is likely to cause great debate among all sides of the net neutrality debate.

European ISPs are looking at news ways to raise revenue in order to invest in the next generation Internet. This will mean that the Internet infrastructure will be fit for purpose as data applications, streaming video and new, yet unseen web services continue to grow. The suggestion that content providers pay for delivery of their high bandwidth content is not outrageous - it is already happening in the UK. It is more than reasonable to expect those companies who use more bandwidth to 'pay for play' and contribute to the investment of an even faster Internet.

Let's take a quick example. If I were a heavy player of World of Warcraft I might get very frustrated that my online gaming was slow or even resulted in disconnection, thereby losing my place and content in the game. If, as a gamer, I could pay to have a guaranteed higher quality of service, I might do this and, in return, those charges would contribute to building new infrastructure that would provide a dedicated connection for online gaming.

It is important to note in this debate that if ISPs charge content providers to pay for faster or guaranteed delivery of their content, this doesn't mean that it would necessarily impact the current flow of Internet traffic or impeded the delivery of email, among other services. This means that more and greater investment would be made into developing new infrastructure which would add to the current infrastructure and create better and better services. This also means that time sensitive, critical services like tele-medicine would have better infrastructure to run on or new, innovative products could develop as a result of delivering a bigger and better Internet.

Building the next generation Internet infrastructure is important to Europe. Ensuring that this happens means ensuring that ISPs have incentives to invest in building that infrastructure. Numerous business revenue streams underpinned by investment incentives and reduced regulation can improve the chance that the next generation Internet infrastructure will happen in Europe.