Select Committee on European Scrutiny Twenty-Fifth and Twenty-Sixth Report


BENCHMARKING eEUROPE 2002


(23259)
6107/02
COM(02) 62

Commission Communication: eEurope Benchmarking Report eEurope 2002.


Legal base:
Document originated:5 February 2002
Deposited in Parliament: 5 March 2002
Department:Trade and Industry
Basis of consideration: EM of 20 March 2002
Previous Committee Report: None
Discussed in Council: 22 February 2002 Informal Council of Information Society Ministers
Committee's assessment:Politically important
Committee's decision:Cleared



Background

  13.1  The eEurope Action Plan was drawn up following the March 2000 Lisbon European Council as part of a comprehensive strategy to transform the European economy. It consists of 64 targets allocated between Community institutions, Member States, and the private sector, all for completion by the end of 2002. The object of the Action Plan is to bring the EU on-line as fast as possible. It targets three areas:

    1  a cheaper, faster and secure internet;

    2  investing in people and skills; and

    3  stimulating use of the internet.

  13.2  We have cleared two previous reports on the Action Plan[31] and an up-date prepared for the Nice European Council which sets out how a benchmarking of eEurope is to be carried out[32]. 23 indicators were subsequently agreed by the Internal Market Council on 30 November 2000.

The Commission Communication

  13.3  This is the first time that progress on the Action Plan has been systematically benchmarked against some, though not all, of the 23 indicators. The data analysed was collected by the Commission and cross-checked with existing data sources such as national statistical authorities and private sector studies. Eurobarometer telephone surveys were also used.

  13.4  Internet penetration, the headline indicator, is measured in two ways:

  • how many private households have access; and

  • how many people use the internet regularly whether at work, home, school or elsewhere.

  13.5  In November 2001 almost 50% of the population over 15 years used the internet. Over 80% go on-line at least once a week. There are nearly as many users in the EU as in the USA but growth in Europe was slower last year than in the US. By far the highest growth has been in use at home. Rates of take-up in households vary significantly, from 60% in Scandinavia and the Netherlands to 10% in Greece, but have increased rapidly from 18% in March 2000 to 28% in October 2000, 36% in June 2001 and 38% in December 2001. The recent plateau in growth could be caused by some countries reaching saturation, added to the fact that the availability of PCs in households acts as a natural ceiling in the absence of internet access through TV sets and mobile devices. The Commission says that efforts to increase internet use in countries well below the EU average are therefore needed, as is the development of alternative methods of access.

  13.6  Penetration in businesses is far higher than the household rate. Almost 90% of businesses with more than 10 employees have an internet connection and more than 60% have a website. A notable exception is Portugal, where penetration is much lower.

  13.7  The Minister for E-Commerce and Competitiveness (Mr Douglas Alexander) summarises the rest of the report as follows:

    "—  Cheaper, faster and secure internet

    "The report highlights that its goal was not simply to produce a cheaper internet, but rather to stimulate competition to drive prices down and away from monopoly or subsidised prices. It notes some success here with the price of standard telephone connections having fallen substantially and continuously since March 2000. However, this has only affected dial-up connection costs. Broadband has generally remained expensive, with citizens limited to choosing between two platforms (ADSL[33] or cable) from a limited number of suppliers. As a result, broadband penetration in the EU (6%) falls far behind the leaders (Korea, Canada and the US). The UK is shown to have one of the lowest internet dial-up access costs, and to have generated new 'unmetered access' pricing models as a result of open competition. The report recognises the added impetus that the new communications regulatory package agreed in December 2001 will give to fuller competition in all convergent markets.

    "The report sees the speed and interactivity of the Internet, or rather the lack of it, as a major obstacle to its full commercial and social exploitation. It highlights the legacy of narrowband infrastructure as the factor restraining rapid progress and sees broadband access as the answer. Whilst listing the options for such high-speed access — satellite, digital TV, fibre to the home and fixed wireless access — it sees ADSL and cable as the leading solutions. It notes varied degrees of success in broadband rollout across the Member States, with Germany having 2 million ADSL subscribers to the UK's 250,000.

    "R&D networks: Significant progress has recently been made in Europe's GEANT network of high-speed interconnections between over 3000 research and educational institutions across Europe. It is now the fastest research network in the world, offering the widest geographic coverage — 32 countries, including all candidate countries.

    "Security: With the adoption of 'always on' broadband networks, the need for security is rising. The report shows an increase in virus attacks, while the number of secure servers per capita for electronic commerce is still 50% of the US average. It notes that the use of electronic signatures is slow, but recognises the success of the industry-led smart card initiative. It also highlights that the Council Resolution of 6 December 2001[34] achieved renewed commitment to awareness-raising, technological and regulatory support and coordination.

    "—  Investing in people and skills

    "In education, eEurope focussed on access and infrastructure, and not the new ways of learning taken up by the eLearning initiative. The report says the target of having all schools online by the end 2001 was all but reached. However, it recognises the majority rely upon a narrowband connection and that little use is made of the internet for teaching purposes.

    "The report notes a lower than expected proportion of workers having received computer training, with implications for the expansion of e-business, and the exploitation of gains in productivity. It notes the continued digital divide between men and women[35], high- and low-incomes, highly and less educated, the young and the old.[36] However, it also recognises the success of the growing number of Public Internet Access Points in reaching the disadvantaged.

    "—  Stimulate the use of the Internet

    "Growth in both consumer and corporate e-commerce has been slower than expected. Only 4% of users classify themselves as frequent online purchasers. There is a North/South split in the use of the internet for buying online. Only around 20% of European companies buy and sell online, with larger companies dominating, which suggests that small European companies are not yet taking advantage of e-commerce within the Single Market. The report highlights trust as a major barrier to e-commerce and calls for a wider use of self-regulation and codes of conduct. It also identifies a link between high internet penetration, low access costs, and high numbers of companies buying and selling online.

    "The report finds that nearly half of EU internet users are visiting government sites. However, under 10% have actually interacted with their administration electronically, and most can only download documents. The eEurope target — 100% of basic services on-line by the end of 2002 — will require substantial efforts by Member States, as the overall average range from almost 70% to under 20% (with the UK at 50%).

    "—  Conclusions

    "Overall, the report states that while the eEurope Action Plan 2002 was a successful short-term tool to get Europe online quickly, and that overall the eEurope Action Plan is well on track, just being connected is not enough to achieve the Lisbon target. A new focus on effective usage of the Internet is required to bring the benefits of the Information Society to European society.

    "The report makes the following recommendations:

  • More policy attention to alternative platforms such as mobile and digital TV;

  • Removal of the obstacles to e-commerce;

  • Widen the availability of broadband platforms;

  • Close the gap between Member States, particularly the north-south divide;

  • Integration of the internet into teaching, not just schools;

  • Rapid creation and implementation of a cybersecurity taskforce

  • Expansion of digital skills and IT training;

  • Promotion of e-Inclusion, particularly to the disabled;

  • More interactive eGovernment, including following up the November 2001 Ministerial Declaration, and exploitation of public sector information;

  • Establishment of quality criteria for health-related websites; and

  • Full integration of candidate countries into the eEurope process.

    "Last but not least it calls for the benchmarking process to be continued, improved, and made long term so that it helps drive through the changes needed for achieving the Lisbon target — becoming the most dynamic, knowledge-based economy in the world by 2010."

The Government's view

  13.8  The Minister comments:

    "This document was presented to an informal Council of Information Society Ministers on 22 February. The Government indicated that although the Action Plan is to some extent only a repackaging of existing EU or Member State activities, it has made an impact in a short time over a wide range. It has focused EU commitment and effort on the necessary acceleration of legislation for the information society, e-commerce and communications markets; prioritised financial support from EU funding programmes; and raised awareness. The result is that the Internet has entered the mainstream of European economic and social life.

    "The Government also agrees that the report shows that the benefits of eEurope need to be spread more deeply and evenly across the economy and society. This will come through the more interactive and interdependent use of the Internet and ICT. And this cannot be done without a step change in the availability and use of broadband communications.

    "It is expected that the Commission will be asked by the Barcelona European Council to produce a new draft Action Plan, running to 2005, and present it to the Seville European Council on 21-22 June. The document concerning this Action Plan can therefore be expected to come forward for Parliamentary scrutiny at short notice in early June.

    "The new Action Plan can be expected to reflect some of the conclusions of this benchmarking report, as well as issues that came up in the Informal Council in February. There are two conclusions in the present document to which the Government will pay special attention:

  • The need to give continued support to investment in broadband networks. The Government believes that the key support measures by governments are the maintenance and enforcement of technology-neutral open competition between broadband platforms, as provided in Europe's new regulatory framework; and encouragement of the use of broadband technologies.

  • The need for an urgent review of the obstacles to e-commerce, to systematically assess the extent to which existing legislation is adequate to address the needs of the e-Economy. The Government agrees that regulation should facilitate, not hinder, e-commerce and e-business. It also recognises the need to encourage self-regulation, which has an important role in establishing trust and confidence between partners. The UK is ready to share its experience in launching the 'E-Policy Principles' in December 2001, which consists of guidance to all legislators on how to consider the practical implications on the Internet and e-commerce."

  13.9  The Minister says that the Government is undertaking a formal consultation on the document but that it expects to ensure that a wide range of views are taken into account in the discussions which will precede agreement on a future phase of the eEurope Action Plan. He adds that the Commission will hold a workshop to which businesses and others will be invited, and that the Department of Trade and Industry expects to hold consultative events with other Departments and third parties.

Conclusion

  13.10  The report is important in providing policy-makers with a measure of what has been achieved since the eEurope Action Plan was endorsed at Feira in June 2000 and an insight into where progress has not been made. What is, of course, difficult to judge is just how much difference Governments have made. Certainly there are areas where a favourable legislative climate is important, and this includes refraining from any temptation to over-legislate. The Minister highlights two conclusions to which he says that the Government will pay special attention — the need to give continued support to investment in broadband networks and the need for an urgent review of the obstacles to e-commerce, systematically assessing the extent to which existing legislation is adequate to address the needs of the e-Economy. He places importance on self-regulation and draws attention to the Government's guidance to legislators, E-Policy Principles.

  13.11  As we note in our paragraph in this Report on the new Internet Protocol, IPv6, the Barcelona Council does, as the Minister expected, ask the Commission to produce a new draft Action Plan for presentation to the Seville European Council in June. Because of the Recess shortly before that Council, we ask the Minister to submit an Explanatory Memorandum on the draft Action Plan, on the basis of an unofficial text if necessary, by 16 May, in time for us to consider it on 22 May.

  13.12  We clear this document, but ask the Minister to inform us, either in the Explanatory Memorandum on the Action Plan or by separate letter, if any differences emerge between Member States in their attitude to legislation and self-regulation which are likely to result in a more legislative approach being adopted than that called for by the UK.


31  (21346) 9097/00; see HC 23-xxix (1999-2000), paragraph 45 (15 November 2000). Also (22013) 14195/00; see HC 28-v (2000-01), paragraph 18 (7 February 2001). Back

32  (21911) 14203/00; see HC 28-v (2000-01), paragraph 18 (7 February 2001). Back

33  Asynchronous Digital Subscriber Line. This offers high-speed connectivity to the Internet over existing copper telephone wiring. Back

34  Not deposited. Back

35  40% of women use the internet compared to 56% of men, compare to rates of 35% and 50% respectively in October 2000. Back

36  Usage is particularly high amongst young people, those with higher education and those who live in a city. Back


 
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