Demand for digital infrastructure is increasing. The potential of the modern digital economy can be realised only if digital infrastructure keeps pace.
Communications service providers (CSPs), digital service and content providers, hardware and software manufacturers, industry groups and governments all play critical roles in the development of the digital economy. However, the delivery of this modern economy has a heavy reliance the availability of communication / optic fibre infrastructure capable of delivering, carrying and transmitting the increased amount of traffic.
In fact, without infrastructure investment, it is difficult to see the EU capitalising fully on the benefits of the internet economy. All industries must adapt their business models to grow digital services and a true single digital market. This need represents a real convergence of technology and communications and will have an impact upon all levels of society from central government to the requirements of citizens going about their everyday life, for example, we expect to see:
- European governments striving to meet the legal requirements contained within the EU 2020 targets;
- Local Authorities ensuring that their cities and/or regions can compete within the world economy and achieve recognition as a 'Smart City' (read on for more on Smart Cities);
- electricity, gas, wind and water companies within Europe and around the world recognising that they have to implement improvements to their networks. This will involve the upgrade of their 'legacy infrastructure' to 'Smart Grid' infrastructure which uses information and communication infrastructure / technology to monitor and actively control generation and demand in near real time;
- health authorities increasingly requiring technology to monitor a patient's physiological status and health remotely and to reduce the need for costly human interaction;
- transport and logistics companies dealing with increased demand and wishing to improve passenger experience and streamline cargo transportation;
- construction companies recognising the need for buildings to better monitor and control their energy performance, to be better served in respect of communication services and to avail themselves of and install renewable energy sources such as solar panels and wind turbines. It is becoming increasingly clear that 'green buildings' can only become commonplace if communication infrastructure leads the way;
The World Economic Forum, in its recent report, identified that the effective delivery of a modern digital economy rests on three pillars:
- commitment of governments to actions that promote the long-term growth of the digital economy;
- removal of impediments to and encouragement of the expansion of roll out of infrastructure capable of supporting the modern digital economy (i.e. optic fibre roll out); and
- modernisation of policies and regulations to encourage investment and innovation throughout the internet ecosystem.
Taylor Wessing's prediction for 2015 and beyond is that there will be a market shift to increased infrastructure roll out. This comes at a cost: it is generally accepted that the 80% of the cost of a roll out is in the civil works and this will encourage initiatives in respect of infrastructure sharing arrangements. Two recent developments will be key going forward, the EU Regulation in respect of reducing cost of roll out of broadband infrastructure and the 'Smart Cities' standards.
EU Council adopts Directive designed to reduce broadband roll-out costs
The EU Commission recognised that there is a need to encourage the pace of the roll-out of infrastructure capable of supporting the modern digital economy and significantly boost and backing for investment in broadband infrastructure in Europe. This is driven by industry concerns that the EU 2020 targets will not be achieved because of the following:
- the high costs connected with civil infrastructure works (it is widely quoted that 80% of the costs of a broadband roll out is incurred in the civil works);
- the lack of transparency in respect of existing infrastructure;
- the inefficiencies and lack of centralisation of administrative procedures; and
- the lack of co-deployment of infrastructures between industries.
The Directive is addressed not only to telecommunication network providers but also to "any owner of physical infrastructures, such as electricity, gas, water and sewage, heating and transport services suitable to host electronic communication network elements". This means that local authorities, train companies, utilities, port authorities and airport operators can be caught.
The Directive looks at ways to facilitate and reduce the cost of rolling out high-speed electronic communications networks by eliminating:
- inefficiencies or bottlenecks concerning the use of existing physical infrastructure (such as, for example, ducts, conduits, manholes, cabinets, poles, masts, antennae, towers and other supporting constructions);
- bottlenecks related to co deployment;
- inefficiencies regarding administrative permit granting; and
- bottlenecks concerning in-building deployment.
The Directive establishes the following:
- general right to offer access to physical infrastructure – network operators can offer access but will also be obliged to meet reasonable requests by undertakings authorised to provide electronic communication networks for access to infrastructure. Such access is to be under fair terms and conditions (including price). Refusals of access must be based upon objective criteria including the technical suitability of the physical infrastructure, availability of space, integrity and security, risk of interferences of the planned electronic communications services, or the availability of alternative means;
- transparency concerning physical infrastructure – every undertaking authorised to provide an electronic communication network, will have the right to access upon request via "a single information point" a minimum set of information concerning the existing physical infrastructure of any network operator. The information shall include:
- location and route;
- type and current use of infrastructure;
- name of the owner or of the holder of the right to use the physical infrastructure.
- coordination of civil works – every network operator shall have the right to negotiate agreements concerning coordination of civil works with undertakings authorised to provide an electronic communication network in view of deploying elements of high-speed electronic communication networks. Every undertaking performing civil works fully or partially financed by public means shall meet any reasonable request from undertakings authorised to provide electronic communication networks, provided that this does not entail any additional costs and any request is made in a timely manner;
- permit granting – every undertaking authorised to provide an electronic communication network shall have the right to electronic access (via a single information point) to any information concerning the conditions and procedures for granting permits for civil works needed in the roll out of a high speed network;
- in-building equipment – all new buildings, as well as buildings that undergo extensive renovation, must be equipped with high-speed ready, in-building physical infrastructure up to the network termination points. All new multi-dwelling buildings and old ones undergoing extensive renovation must provide a concentration point located inside or outside of the building that is accessible to electronic communication providers. There is an exception available in respect of buildings that undergo extensive renovation where the cost of fulfilling these obligations would be disproportionate.
Member States must adopt national provisions to comply with the new Directive by 1 January 2016, and they must apply the new measures from 1 July 2016.
"Smart Cities" Standards announced
In In May 2014, a new ISO standard was announced with the intention of giving cities common performance indicators so that they could assess their performance against their neighbours / competitors and on a global basis.
While the formal name of the newest smart city standard (ISO 37120:2014 Sustainable development of communities – indicators for city services and quality of life) is certainly not a snappy and succinct title, ISO 37120 is important in that it is the first ISO standard for smart city indicators which will help city leaders guide their smart city decisions and investments.
In fact city leaders worldwide look to benchmark their service performance, learn best practices from other cities and compare their city against other cities. The ISO 37120 effort was launched in 2012, by city representatives from over 20 countries. According to the President and CEO of the World Council on City Data (WCCD), Patricia McCarney, the WCCD is now piloting ISO 37120 conformance with 17 cities globally.
The standards include the following themes:
- fire & emergency response;
- solid waste;
- telecommunication & innovation
- urban planning;
- waste water; and
- water and sanitation.
The indicators and associated test methods in this International Standard have been developed in order to help cities:
- measure performance management of city services and quality of life over time;
- learn from one another by allowing comparison across a wide range of performance measures; and
- share best practices.
From the list above, it is clear that this ISO Standard and assessment of where a city is within a league table has significant reliance on digital infrastructure and, as such, will spur on the cities to consider how they can encourage the roll out of infrastructure or leverage the infrastructure they hold within their own estate.