 Good morning, everyone. I welcome you to the 19th meeting in 2015 of the Infrastructure and Capital Investment Committee. Everyone present is reminded to switch off mobile phones as they affect the broadcasting system. As meeting papers are provided in digital format, you may see tablets being used during the meeting. Apologies have been received from David Stewart and I also welcome Willie Coffey, who has joined us for our evidence session this morning. I also welcome the Reverend George White, clerk of the Presbytery and acting clerk of the General Assembly of the Church of Scotland, who will be observing our proceedings this morning. Agenda item 1 is digital single market. The committee will take oral evidence from Gail Kent, director of resources in DG Connect at the European Commission on the digital single market. I welcome Ms Kent to the meeting and invite her to make an opening statement. Good morning. Thank you very much for inviting me. I feel very honoured to be visiting the Scottish Parliament. It feels a little bit like I'm on the television because I've seen it so often on the television. I'm indeed a director of DG Connect, which is the digital DG of the European Commission. We have about 1,200 staff. I mainly deal with the budget for the huge research programme that we have and with staff matters and procedural matters internally. But of course I'm also part of the management board of DG Connect and therefore I'm involved in the policy decisions as well. So just to say of course that I'm therefore not a technical specialist, but I hope to give you a good overview and to answer your questions. But I promise to come back to you if I'm unable to answer any questions and send the answers through our Edinburgh office if I need to. So my objective here today is to confirm the commission's commitment to achieving a fully functional European Union digital single market. And to tell you a little bit more about the commission's plans for realising it. Digital technologies and the internet are transforming entire business sectors with major impacts on the labour market and society at large. Our European strategy for the creation of a digital single market provides the necessary strong and unitary European level action to address the scale of the economic and social changes brought about by digital in general. Our overall objective is clear. The digital single market must enable the free movement of goods, persons, services and capital. Citizens and businesses must be able to access and use online activities under the conditions of fair competition irrespective of their nationality or their place of residence. Today regulatory fragmentation is holding Europe back. In particular startups and SMEs who are the key to sustained recovery and job creation suffer from regulatory fragmentation. They don't have the resources of larger competitors to deal with up to 28 different regulatory regimes. Furthermore the lack of a digital single market is putting European players at a disadvantage at a critical time in the development of the digital economy. Now is the time when the shares in the new data driven economy based on the internet of things are being parceled out. It is also a critical time for the roll out of high speed wireless networks and services requiring more efficient coordination and enforcement at EU level. We've seen this happen before. Digital markets punish those who arrive too late. In certain segments like for internet search, communications and social media or e-commerce platforms, European players are largely absent. We cannot allow the same thing to happen with the infrastructure and services enabling connected cars, smart homes, smart grids, self manufacturing etc. We need to realise that for many issues the European level offers the right framework. European solutions ensure keeping the EU on equal footing with other major world economies. The European Commission adopted its digital single market strategy on the 6th of May. It is among the top three priorities of this commission and President Juncker and we therefore recognise the urgency to act. Clearly it has to be something of which we don't sit around for the whole of President Juncker's mandate because by then the whole regulatory framework and the technical framework will have changed. The strategy consists of three main pillars and 16 concrete policy actions which are mutually reinforcing. The first part of the DSM is improving access to online goods and services across Europe. We want in the commission to prevent unjustified geo-blocking and to modernise our copyright framework. We also need to adapt our consumer rules to the borderless nature of online trading. Secondly, digital networks and innovative services. We need to overhaul our telecoms regulations and address issues such as combating illegal online content or strengthening cyber security. We must also take a look at the increasingly central role that platforms have in the digital economy. And the third pillar is maximising the growth potential of the digital economy. We would like a strong data driven economy taking advantage of emerging technologies and boosting innovation. But we also want to ensure that European citizens have the necessary skills to work with and benefit from the significant advantages that ICT solutions bring in their day to day life. Our aim is to act swiftly and coherently across institutions to deliver on the digital single market strategy. We want to see real tangible change by 2017. However, we are conscious that we have to take into account all of the views of the member states and all of the legislative initiatives will undergo rigorous consultation and impact assessment before their adoption by the commission. We need the Scottish Government and Scottish citizens to get fully involved and present their views during the consultation process. So I'll just say a little bit word about the consultations. We have started implementing the digital single market actions and as a first step we will engage with the widest audience of stakeholders through public consultations. We have started to consult the public on the future of the Audiovisual Media Services Directive and a Satellite and Cable Directive. We have launched a public consultation on the future of the regulatory framework on telecoms and we have launched or are about to launch public consultations on prohibiting unjustified geoblocking and on online platforms. Including topics such as the economic and social impact of platforms, the liability of online intermediaries and the sharing economy. These consultations will feed into a rigorous assessment allowing the commission to find the best solutions to address the problems identified in the digital single market strategy. Before the end of 2015 the commission will come forward with a legislative proposal on the modernisation of the EU's copyright regime. In 2015 the commission will launch a comprehensive assessment of the role played by online platforms in European economy and society. In the first half of 2016 the commission will come forward with a legislative proposal on prohibiting unjustified geoblocking. In the course of 2016 the commission will also make proposals on the review of the telecoms framework and the Audiovisual Media Services Directive. All of these will be after having read the results of the consultations that are currently open. That is an overview of the situation. I have a small power point that I did not use today but which I will send to the Scotland office afterwards and which can be distributed. Thank you very much for that. Perhaps I could kick off just by asking you what success looks like. Obviously the digital single market strategy is in its infancy, having only been launched in May of this year. You said this morning that you expect to see real tangible change by 2017. How do you intend to measure whether there has been progress in the short to medium term? I think that what will be adopted in 2017 is more the framework. We are not so naïvet to think that we are going to change the world in the next couple of years. It is more laying out the groundwork for changing the world and also for changing the whole atmosphere in Europe. Towards the digital market. What we really want to do is to improve the situation for businesses within Europe. The strategy will reduce costs and uncertainty for online traders. Many online traders, in particular the small ones, are afraid of the costs and uncertainties of dealing with the law of a different country. 57% of online traders confirm that if the same rules were applied in Europe, they would start to increase their sales to other countries. We also, by dealing with the questions of cyber security of data protection, we want to give the consumers confidence. A lot of consumers say that their primary concern, although a lot of people put a lot of data out there without really thinking about it as well. But their primary concern is that a lot of data is circulating about themselves and they are not really very confident that the data is kept confidential. By the end of next year, if we put forward the proposals next year, then it has to go through the council and things like that. I think that the situation won't change immediately. Our aim is to give European businesses the confidence to move forward in the digital area, rather than relying on businesses from other countries like North America. You have set out some of the benefits of the digital single market. How will you measure progress in achieving the different pillars that you have outlined this morning? You have talked about the better online access to digital goods and services, an environment with digital networks and services can prosper. Digital is a driver for economic growth. How do we measure success in each of these? We have a number of scoreboards that we use in order to measure success. Things like the amount of cross-border trade that goes on in the digital market in Europe at the moment, which is only 4 per cent cross-border at the moment. We are able to measure things like that. Also, the broadband speeds and whether people are happy with the broadband speeds. We have an index thing called DESI, which I am not sure what it stands for to be honest. We are looking at the percentage of internet users which shop online, the percentage of people who access audio-visual content and also cross-borders, the number of people who are interested in watching or listening to content abroad and whether they are able to achieve it or not, information on whether businesses feel that delivery costs are too high or consumers think that delivery costs are too high, and a lot of information that is available on connectivity. Things to do with confidence. For example, what concern people have when using the internet for things like banking or shopping online, compared to world figures or comparing between different countries, percentage of people involved in digital skills, so that there is a whole wealth of indexes which will be looked at and which we aim to improve over the period of this commission and then onwards. Clearly, one of the biggest barriers to achieving all of this is the fact that the European Union single market is 500 million people and 28 member states, all of whom potentially have their own regulatory framework and rules. How do you tend to address that? This will be one of the hardest things to get through because if you look at the telecoms single market which only went through recently in the European Council, there has been a lot of resistance from the member states because there is a lot of individual interests within the member states. I think we have to get the member states to understand that it is in their interest to try to harmonise as much as possible or at least to agree standards which will be acceptable in all countries in order to open up the market because it is in nobody's interest if we keep the markets fragmented. Although some of the countries like the UK has very strong companies involved in competition in other member states, there are also often the countries which argue against the harmonisation but I think it will open up their markets so that is how we intend to convince people and then I think we have to have the consumers on our side so it is not just a matter of protecting strong individual countries in national administrations but also involving the citizens more fully in these decisions. Thank you for that. We are going to move on to some specific issues. Alec, you have some questions. I note that the European Commission considers that the take-up of a fast broadband is relatively low. Are you in a position to give us any indication as to how Scotland compares with countries across Europe in terms of the take-up of a fast broadband? We certainly see a risk of a divide between those member states that are developing ambitious broadband plans to develop a future-proof infrastructure and those that might be tempted by more modest upgrade of existing networks. As you know, the Commission's ambition is for all member states to provide access to speeds in excess of 30 Mbps, which is megabits per second, which I always have to look up each time, by 2020, with 50% of all European households subscribing to ultra-fast speeds of more than 100 Mbps. So some countries are more ambitious. Germany aims to provide speeds of 50 Mbps to all households by 2018, while Sweden aims to provide access to speeds of 100 to 40% of premises by 2015 and 90% by 2020. In comparison, the UK Government's rural broadband programme is more modest. I know that you have also set out your aim to establish a network making super-fast broadband available to 90% of premises across Scotland by this year and universally available by 2020. I have actually some information on Ireland. For example, in Ireland they have done something more radical. I can find the information which I read down somewhere. So Ireland, I think, are using a different system. They started more from scratch. Can you just give me a minute to look up the information? So in Ireland there's a joint venture between Vodafone and the Electricity Supply Board deploying fibre to the building using the existing electricity networks and they will soon launch a tender for an ambitious national broadband plan, with higher speeds, for example. So there's a lot of differences. At the moment, within Europe, the UK is relatively strong, I think, the sixth of the 28 countries. Other people have more ambitious plans, I believe. I was interested to hear some of the things you were saying about Ireland there. I have to say that within the last year I've had a case that involved someone moving into a new house that hadn't been wired for a traditional phone system. We're very disappointed here that we're not seeing new housing in particular being cabled with fibre, because it's the easiest thing to do. Have you any idea what standards are being imposed in other European countries as for the provision of cabling in new homes? No, not for new homes, I don't know, but I could find out for you. Thank you. Mike, thank you, convener. Good morning. I represent the Highlands and Islands and although it's a wonderful area to represent, one of the problems is that as soon as you step over what we used to call the Highland Line, you also step over the digital divide in as much as both fixed line and mobile broadband provision is very poor. It's the kind of medieval equivalent on the map of here there'd be dragons. Possibly, but we don't know that because we're unable to communicate properly. It's a big issue with my constituents. Quite recently, John Swinney, the Deputy First Minister and Cabinet Secretary for Finance, was giving evidence to the committee. He was talking about the provision of broadband or the fibre optic backbone, which will support high-speed broadband across the Highlands and Islands. The Scottish Government has spent £127 million on the provision of that for the Highlands and Islands. He agreed with me on that occasion that it would be better for this to be dealt with by regulation. Of course, telecommunications are reserved to the Westminster Government. Is there anything that can be done at EU level to encourage a universal service obligation or something similar that would allow my constituents access to high-speed connectivity, whether it's fixed or mobile? Moving on to the mobile side, is there anything that can be done to improve the encouragements of access to 4G across the Highlands and Islands and other rural parts of Scotland? Apologies for that being such a long question. I think in the Commission we are very conscious that there is an investment gap and that it needs to be filled. So there was an estimate done by myDG Connect on the gap that needs to be plugged if Member States are to reach the last broadband targets. The universal coverage and the subscription of 50% of households to faster coverage. According to these estimates, Europe needs €34 billion to reach the target of 100% coverage at 30 Mbps and £92 billion if we wanted to reach the 100 Mbps to 50% of households. So there are a number of things which are available, but we feel need to be better leveraged in the next few years to help these things out. So there's the European structural investment funds for broadband, which is currently estimated at 5.5 billion, can help plugging gaps. And we're hoping also to leverage £150 million to broadband under the Connecting Europe facility, which is the new programme which is looking at better connections in transport energy and connectivity across Europe. And then the Junker Plan, which is in its very early days yet, which is called FC, I think EFSI, which is looking to work with the European Investment Bank to leverage funds from the private sector in order to encourage people to invest in broadband and mobile phone provision in outlying areas. So these are something we would expect to come out as very substantial things as a result of the DSM strategy, so to focus these funds which have been existing for a while in some cases into the things which are more needed. But not any regulatory attempts to create some kind of universal service obligation then? Well, I think in terms of the telecoms, we're looking at the telecoms framework, and so I'm sure, well, you know, the commission loves to introduce it, regulatory things, but the member states aren't usually so keen on it. But I would think as we're doing this review at the moment, and as a result of that I would think we would also look at minimum standards that we would expect to be implemented. But this is something that we would find very interesting for you to feed into the consultations that are going on at the moment, whether that indeed would be helpful. OK, thank you. Are you aware of any innovative examples of 4G provision across the EU? You know, sometimes it's said that Scotland's geography, particularly in the Highlands and Islands, mitigate against the roll-out of high-speed broadband. So are you, but other countries have similar challenges and yet some of them seem to achieve better provision than we have here? Are you aware of any examples of good practice or innovative practice that could help us understand what's possible? Well, today investment is happening in Europe and private operators are investing, and so the surge of LTE long-term evolutions, so mobile phone coverage, is also very positive. But we understand that we can't expect private operators to go everywhere. We believe that we should support operators to reach those areas that would not be covered otherwise. I don't actually have any particular examples, but I'm sure there are examples. Again, I can find it out for you. Examples of where they've improved 4G coverage? Yes, just innovative examples, but perhaps they're dealing with difficult terrain, difficult topography, difficult geography. Maybe if I move on to another area, because I'm sure you'll be as horrified as I am continually to realise that my constituents get a double whammy, because not only have the difficulties of very few, very poor connectivity, but when they do manage to get a message through to a supplier and post another, they're then faced with very high delivery charges. That seems very much to be part of this equation. Will the commission's work address the issue of high delivery charges across the Highlands and Islands? In fact, in some cases, we get some suppliers that say, we don't like your postcode and we're not going to deliver there. It's a frequent complaint from my constituents. Once again, those matters are reserved to the UK Parliament, not this one. I wonder if there's anything that you can do to address this difficult issue. Indeed, recent studies confirm that the cost of delivery is still an obstacle to cross-border shopping, or even within, to a certain extent. Shipping costs are the most common reason in Europe, in general, for consumers not completing an online purchase. 62 per cent of companies that are willing to sell online say that too high delivery costs are a problem for them. It's on both sides. In fact, the consumers don't like it, obviously, because it's not interesting. The companies don't like it either, because the costs are high and therefore it becomes inefficient. Tarries for cross-border small-parsal delivery, charged by postal operators, are often two to five times higher than domestic prices. For example, it costs €32.40 to send a two-kilo parcel from Belgium to Austria, which is five times the price that it would cost to send within Belgium. The other way around, different prices, but also big differences too. The question is, are we planning to regulate cross-border delivery prices? We believe that competition appears to be the most appropriate and effective way of addressing today's concerns in terms of affordability. However, in order for the competition to work in a fair and efficient manner, all the market participants and retailers, delivery operators and consumers need to enjoy a certain degree of price transparency. Often you only discover these things when you're halfway through the purchase. We believe that price regulation is only a means of the last resort where competition doesn't bring satisfactory results. At the moment it's not being considered, but it could be considered. We consider it better to close monitor the situation and to try to address any market failures. The intention is to review it after a couple of years if it doesn't work. Again, it's something because there's a whole section to do with parcel deliveries in the consultation, so we're interested in knowing people's points of view. The final area, again, I'm just moving on to a slightly different aspect of this, but the committee recently undertook an inquiry into freight transport, the freight transport system that serves Scotland. One aspect of that inquiry was looking at how that industry might reduce carbon emissions. If we're looking at an increased online business, digital business, with increased shipping and freight that that implies, is the commission looking at how that can be based on in order to ensure that we're making best use of low-carbon transport? I would expect that the commission is looking at that, but it isn't in my DG, so I hadn't actually got an answer to it. The problem is that by having more online deliveries it will create more lorries than the cost. That's the logic, and I think it's probably an escapable logic. Obviously, given the low carbon agenda, we'll look at increasing freight, which is good, but decreasing the carbon output of that freight system if we can. Perhaps that's something that you can have a think about. There are five DGs working together on the digital single market strategy, so I'm sure that somewhere within that there is a policy on how to deal with the fact that there would be increased carbon emissions as a result of an increase in parcel delivery and delivering online, so I'll find out. Thank you. Thank you, convener. Good morning. I'd like to return to some of your opening remarks that you were highlighting the predicament of small SMEs, small businesses in particular. Only 7 per cent of SMEs in the EU sell cross-border, but small online businesses wishing to trade in another EU country face around 9,000 euro extra costs for having to adapt to national laws, including up to 5,000 for different VAT regimes. How are you going to tackle that? What are the immediate priorities in terms of establishing a fair crack of the whip for SMEs in terms of online business? Thank you very much for that question. The commission intends to propose, subject to the consultations as well, so these are the things that are in our mind at the moment, a solution that ensures that if traders selling across borders can apply a single set of terms and conditions domestically and in the internal market, whilst guaranteeing consumers in the European Union can enjoy the same high level of European consumer protection which they expect. So we intend to bring forward a proposal which introduces harmonised consumer protection rules for digital content and rules, which will allow traders to rely fully on their national laws with a set of key mandatory consumer protection rules for sales of physical goods. There's also the question which has already been related to do with deliveries, where we intend to deal with it. The DSM strategy is also providing for common cross-border thresholds for VAT to facilitate small start-up businesses. So the level and the type of the thresholds will be considered as part of the impact assessment for the proposal. We've also started preparatory work on preparing a comprehensive future initiative on reducing the VAT compliance costs for SMEs generally. But I think for us really the most important part and probably the most tangible part is the encouragement of the SMEs within Europe. So we see that as absolutely imperative to the success of the DSM process. And if companies are not wanting to operate to other countries because they feel that the administrative barriers are too high, then any digital strategy is a failure. So it has to be the absolute first priority. So what are you doing with individual member states to promote the benefits that this will bring, its move will bring, to reduce the barriers and allow trade to develop? Well, as I say, at the moment we're at the consultation stage. So what we've been doing, we have what we call going local teams in the DGs where they go out to individual member states. So there was a group of director generals had visited the capitals of various states and talked about the digital single market. And I know the UK government is very positive about the move. So at the moment we're more in the kind of marketing stage and the pre consultation stage of suggesting what we want to do. And for example, the UK government is very positive about the digital single market strategy. The difficulty will come when it actually comes to the individual regulations and people have to realise what has to be adapted. So I think the important part at the moment is getting people on board to the concept. Digital obviously is going to be the main cause of growth in the next 5, 10, 15 years and therefore we need people on board. But we haven't actually got to the stage of actually making specific proposals yet. There's also a lot of work going on to do with trying to encourage investment in these areas. There's a lot of research projects going on and also special schemes which exist for SME projects. The fact sheet that you provided the committee before today's meeting said that almost half of the EU population, so 47 per cent, is not properly digitally skilled and yet jobs for the future, 90 per cent of those jobs would require some level of digital skill. So how is the commission assisting the member states in closing the digital skills gap both in the general population and in the workplace, particularly in small businesses? You're absolutely right. There's a huge shortage of digital skills within the whole of the EU. In the UK, also in Scotland of course, there's a shortage of ICT professionals which is expected to increase in fact up to 2020 and demand is outstripping supply. And not enough young people are being trained for ICT careers. So education is a, what's the word they use? Anyway, it's not a commission, it's not a permission and prerogative, it's a member state prerogative. So we try to work with the member states to find solutions. We have a grant, what's called the grant coalition for jobs, which is getting the member states to work with different stakeholders in order to have a collaborative effort to increase the number of people working in these areas. We also have various member states including the UK introducing coding and things into school education. I mean the UK I think has been working on digital skills issues for a while and had the first national collaboration. There's a new computing curricular in schools and I know in Scotland you also have the skills investment plan and also plan C I think is it too. So these are the things that we see as very important to the future. In your answer you mentioned schools a few times and in Scotland we've got a problem recruiting and retaining computing teachers in particular at the minute. So I'm just wondering would the commission see themselves in that role to assist in helping to develop programmes in order to keep people in those skills and to promote those because obviously that's part of the STEM subjects that maybe females don't feel attracted to. Is that something that the commission would look at working with a member state on or do you feel that's a role simply for the member state? I think it is a role for the member states. I mean legally it's a role for the member states but I don't think the commission can kind of sit on the sidelines because it's absolutely very important. So we try to give a lot of publicity to things where we increase the number of ICT people and we also meet stakeholders and talk about women in tech for example and encouraging young people to go more into STEM subjects. But I think that we are reliant on working with the member states in terms of taking best practices from various member states and rolling them out into other countries and getting people to work with stakeholders in the particular member states. I mean we don't have funding per se for that. You just spoke about best practice. So are there examples of trying to close that digital skills gap in other member states that Scotland in particular could learn from? Well I think it's not much help because everything is a matter of perspective isn't it? I mean the big example that always gets given in Europe is in fact about the idea of introducing coding skills for primary schools which is actually a UK initiative in any case. I think that some countries have developed partnerships with local businesses to increase the number of apprenticeships and things like that but I'm not aware of any particular best practices but again I could ask and come back to you. That would be helpful. Willie, do you want to come in on the digital skills gap? Not on the gap itself but just other issues. I'll get you to hold your fire until other members have asked the questions. I have a couple of questions. There are really subjects we've touched on already and I just wanted to make sure that we've got all the information. The first one is, as you've said already, there's a good deal of what's going on to future proof digital networks but is there anything else that the commission's doing to ensure that the rollout to broadband in EU countries is future proofed? So future proofed in what sense that we've already thought about? As in that the networks are able to perform functions in operated rates that are significantly higher than the ones that we're currently talking about. The review of the telecoms regulatory framework is part of the digital single market and all digital services and applications depend on the availability. I think what we believe is that we need to understand better what kind of networks will be needed by 2025. So we know that new services ranging from e-health to connected cars will have the potential to become available quickly if the required connectivity is available. So we have to make sure that the regulatory framework provides the right conditions for operators to invest in those networks and for consumers and businesses to benefit from high quality connectivity. Again, this is one of the things we're looking at in the public consultation. We've started an evaluation of current rules by launching a public consultation of the framework. Although we haven't actually had the results of the consultation yet, we can see perhaps four areas for the forthcoming review. The first is investment in networks. EU telecoms rule book is often criticised for not having sufficiently promoted the transition towards high capacity next generation access for future needs. So we want to look now at how to make investments in higher capacity networks rewarding and adjustments to the current rules are probably necessary in order to increase the incentives. We need to also, in the regulations, take account of the state of technological development of networks and the number of networks available in a different area. Since the current market regulation doesn't provide effective tools to address those circumstances, we want to explore options to enlarge public authorities toolbox to incentivise operators to deploy networks in challenging areas. Since the last review in 2009, the last telecoms review, the sector has undergone significant structural changes characterised by the transition from copper to fibre. The more complex competition with the convergence of fixed and mobile networks and the rise of retail bundles. At the moment, voice is no longer the main service as an access to connectivity. The emergence of these over-the-top systems brought new dynamics into the services side and consumers' habits have changed and everyone is more dependent on high speed broadband. So what we need to do in the review, we believe, is to look at these particular areas and try and estimate what will happen in the next few years and make sure that we are ahead of the game rather than behind the game, which has always been the situation up to now. I can certainly voucher the fact that voice is no longer the most common use of landlines. The only voice calls that I get are unsolicited marketing calls. It's terrible, isn't it? The other thing that I wanted to ask about is that you've touched already on the common regulatory framework. I just wanted to explore that a little more. You suggested that, in some countries, perhaps this country was more the providers who were resistant to competition rather than the Government. In terms of European Governments as a whole, where is the common regulatory framework finding favour and where is it being opposed? I'm not actually sitting in the discussions in the council and I suspect that it's the bigger countries who are more resistant because they have the bigger companies with the most to lose. I suspect, but I don't actually know. If you look at the countries that have been the most innovative, they're often the ones with the least background in these things. Obviously, Estonia is the... My vice president, Ansip, is Estonia, so I'm always hearing about Estonia. Estonia is the country that has really started from scratch and has the most excellent system in terms of... Not only in terms of... Also in terms of the e-government, I think, where they're extremely advanced. My experience of mobile telecoms in larger European countries is that the trend has been for companies to extend their networks across borders and then offer single services that cross borders. So are we in a situation where perhaps the companies are making more progress than the countries are at the moment? Well, I can't answer that from a statistical point of view, but I think you may be right. I think that is the case. Still, that's quite a good thing. Oh yes, it's a good thing because companies in the end will push governments which are resistant, I think. OK, James. Thank you, convener. Good morning, Ms Kent. I've got a couple of questions around competition. Ofcom, I've told a committee that expects the commission to look at ways to simplify or reduce regulation where there's an infrastructure competition and seek to further incentivise the development of high-capacity networks through ensuring returns on investment reflect risks while protecting competition. Did you get all that? Does Ofcom's view match the commission's intended approach to the review of regulatory framework? And if not, where does it differ? Well, as I say, we're in the draft stages at the moment anyway. I can't see anything in the Ofcom statement that the commission would object to at all. So, we also see that it's very important to keep things as simple as possible and to deregulate where it's possible and to have more uniformity between the regulations that do exist. So, when there was a meeting at the UK government level earlier this year, there was very strong support for the digital single market and I think the UK is traditionally a country which is in favour of making things simple and minimising regulation except where it's absolutely necessary and promoting competition. So, we would be surprised if there was a lot of resistance. I'm sure we'll be keeping an eye on it to see if the two of you still have the same kind of views later on. I've got one other aspect of it. I think the devil is in the detail as they say. Well, I think that's also Ofcom's view. And the detail is yet to come, of course. There was a recent report on the media which highlighted a range of internet costs for consumers across Europe, with prices in the UK as much as 50 per cent more than other EU countries. Will the DSM help bring parity to internet costs across Europe or does the commission consider competition to be a matter for individual member states? Does the commission consider competition to be a member? I think the commission is in favour of competition, but it certainly doesn't consider it to be only a matter for individual member states because if we all took very individualistic views of the way that the market worked, then we'd be looking at these tiny little markets. I think the big thing about the successful computing internet companies is that they're operating in a huge market. I think we have to take the beliefs in the free market economy that exist in some member states more than others, but we also at the same time have to make sure that they're not protecting their own markets. So that competition to their markets is also open to companies from other countries and vice versa. That seems to be counterintuitive to what you're talking about, the digital single market. In any case, there's no border for digital services. It can be quite infuriating if you're moving around between countries when you find that you can't access something that you had in one country or that you even bought in one country and you can't access it in another country. Willie Coffey has been waiting patiently, so I'm going to ask him to come in. Thanks very much, convener, and thanks for allowing me to attend the committee today. Members may know that I'm a member of the European Committee and I also convene the cross-party group in digital participation and for my sins, I'm a former software engineer in another life. I have an interest in a number of those issues, but firstly I would say that I don't envy your task, Ms Kent, that you have ahead of you. A number of those issues have been raised at our European Committee over the past year or so. The first question I wanted to touch on with you is about the great roaming rip-off, the roaming charges rip-off. We're aware that roaming charges were supposed to have been abolished by December this year and that that has been pushed out. I now understand that it might be June 2017 before roaming charges are finally pushed out of the picture in Europe. What I cannot find out, convener, is where that decision was taken because it was certainly part of the commission's plans to end roaming charges. But where and when and who took the decision to push this out to 2017? Would you be able to tell us that? The final decision on the TSM, the TSM to TSM, we're all initials. The TSM package was actually taken just before the summer, by final agreement in the council before the summer. I remember in our DG we had a thing saying at the end, the death of roaming. We had a kind of celebration on our internet for the death of roaming. I don't actually know, but I would assume that the decision on the timing of it came out in the final decision, maybe part of the compromise to get it through because it stalled for a long time as you know the whole thing, was to actually push the dates out slightly. I'm afraid I don't actually have the information on it, but I can definitely find out. It was until next summer. Nobody seems to know. I'm sure somebody knows. I'm sure somebody knows, but roaming charges were meant to end in December. As you know... Yes, no, I knew there would be due to end. In fact, I wasn't even aware of myself that it was next year. As you know, convener, the first thing you do when you go abroad outside your jurisdiction is to throw your mobile phone in the drawer. That's far too expensive to use. It seems to me and others that the commission and perhaps the member states have buckled under the pressure of mobile companies to push this decision further out. Even the proposal now will still provide exceptions to this, but they haven't defined what these exceptions might be. As a consumer of mobile services, if you are lucky enough to be able to travel around jurisdictions, let's not forget that technology doesn't recognise borders, but mobile companies do. They exploit it to the health to make money at the expense of consumers. It was just to touch base with you on that, to see where the pressure might be coming from to finally get rid of roaming charges and a date that we can all look forward to actually happening in reality. There definitely has been an agreement, but perhaps the date is not. I will definitely find you out of the information, and I absolutely agree. My own personal view is that, yes, there has been buckling to pressure. You'll probably be aware, too, that the last agreement in the math framework we saw a £7 billion cut in the IT infrastructure provision that was intended at the time. It seems to me that, while the strategy quite correctly focuses on access to goods and services and making that all available throughout a single market, it seems to me that you really need to have almost a transport infrastructure for data that is capable of delivering those goods and services. The focus on goods and services without transport infrastructure for data seems a wee bit round the wrong way. It is to ask you, where are the pressures? Where is the technical expertise within the Commission and the European Union to make sure that decision makers and policy makers are aware of that? It's a bit, convener, like expecting goods and services to be transported around the motorway network without investing in the motorway transport system to get the goods and services there. I suppose that it's the best analogy I can think of, convener. So concerns made at decisions like that that are so crucial to the delivery of content and digital services are sometimes taken in reverse of the way that they perhaps should be. So the question to do, when you say the amount was cut, you mean from the multi-annual frame? Up until 2020. It's true that I think the original, I think it goes without saying that RTG is in favour of maximising expenditure on that kind of thing and minimising it on other policy areas where money is spent on the MFF. So I would absolutely agree with you. And there was definitely a cut in the amount that would be given to ICT infrastructure in the final decision on the MFF, which was taken by the Member States and the European Parliament. There will be a review of the MFF in 2017. We've already started working on that. And I think there is, as I understand it, this would also have to go through the same council in Parliament, of course. There is no intention to increase the amount of the MFF as a whole, but I would imagine there is some scope to move things between the various lines of the MFF. And I would suspect that President Juncker will be in favour of increasing expenditure on things related to which are necessary to the digital single market because it's really his number one priority. So I would expect there will be some changes, some increases put forward, but of course they will still meet the same resistance that they met the last time. However, life has moved on in the meantime. So perhaps now people will see digital as a more important investment than it was when it was discussed in 2012 and 2013. Can you believe it? It probably goes a long way towards explaining why you've got such a disparity in the Member States in terms of our ability to deliver digital services. You read out some examples of the targets at Germany and Sweden and so on and so forth have. That's why there's such a disparity in my view because their own investment in digital infrastructure is really largely up to them. This huge cut in the digital infrastructure budget clearly must have an impact, otherwise 7 billion pound euros must have an impact on that. Unless that kind of issue is addressed to investing in infrastructure right across the European Union, you're going to continue to see fragmented delivery in my view and different quality of service within the Member States, which is completely outwith the scope and the aims and purposes of the digital single market. I have a time for one last question. You mentioned the Internet of Things in your opening remarks there. For members, that's about devices communicating with one another in a much more sophisticated and intelligent way in the future. At our committee only a few weeks ago, we heard that the Europe's cyber security agency, NSER, I don't know if you're from NSER, they had admitted that it is unprepared for the advent of the Internet of Things lacking the money and expertise to meet those challenges. That would be a worry for me to hear something like that. When we're seeing such rapid progress towards communication and intelligent communication between devices, that cyber security agency within the European Union feels unprepared for its advent, could you tell us a wee bit more about that and perhaps what's being done to try to address it? Thank you very much. Just to return a minute to the MFF question, of course the amount spent on this has increased. What was cut was the amount proposed to be spent on it, and I guess probably that's where people got maybe confused when they were making the decision, because it seemed like an increase anyway. It wasn't a big enough increase, in my opinion, given the situation with the increase in the digital market. I absolutely agree with you where we see cyber security as a hugely important part of the digital single market framework. I think that it's also to do with people's confidence in the system, which we need in order to boost the market. We see that some kind of directive on internet security would be part of the DSM framework in order to give people reassurance in order to invest personally as businesses, but also to use the systems. I think you're right, they are unprepared. Inesu is quite a small agency anyway, as you know. Within the Commission, I think the responsibility for cyber security has been diffused a bit between various DGs, and now there's a big effort. It's extremely important to President Juncker that we bring all our work on this together. I think in our DG, after the digital single market team, it's the second hottest topic, so I expect it to have a lot of thought and input over the next few months. I sincerely hope so. I'm sure that the convener will be interested in following that up in cyber security. If the digital single market opens up and people do engage with technology much, much more than they're perhaps even aware of, the security aspect of that is absolutely crucial to read that there's an unpreparedness for this within the European Union is a wee bit concerning. It's interesting to me and I'm sure other members to follow progress with that agenda as it develops. Thank you very much, convener, for allowing me to attend and ask these questions. As I said at the outset, I don't envy the task that you have in front of you. Speaking on behalf of consumers and constituents, some of the issues that I'm raising are important to them about costs of accessing and using technology within the European Union and to read the aims and objectives of the single digital market are wonderful, but sometimes the delivery is a wee bit less than that. Thank you very much, Willie, for your attendance and for your questions this morning. Just bringing our session to a close, one of the points that Mr Coffey was making about the variation in the level of infrastructure investment and the development of broadband networks across the countries of the European Union is an interesting observation. Given that there are a number of factors that impinge on the development of broadband networks such as geography, particularly remoteness and rurality and the difficulty of achieving connectivity in rural and remote areas, population size and density and obviously legacy infrastructure, what is the attitude of the European Commission when it comes to determining what state aid might be made available and how does the commission take these different factors into account when arriving at those decisions? You are referring also, Mr Coffey, to the current situation of state aid that was made available in 2013 for two years to the UK in order for the rollout of broadband, which, if I understand correctly, has been stalled lately because neither OFCOM, confused between the different countries, neither of the Department of Competition anyway in the UK nor the competition department in the European Commission are happy with the way that the existing state aid situation has developed. However, having spoken, I tried to speak to the people who were involved in this before I came, and I understand that there is agreement between the UK and the EU that things need to change and they are confident that they will find a solution to the problems and therefore they still have hopes that the state aid will be re-granted for a further period. I think that it is the same for a state aid for this as for anything else. It just has to be clear that the procurement of the services is done in a competitive way and that it is not used by individual companies in order to increase their turnover rather than putting things out properly to the market, if I understand correctly. We are not against the state aid but we feel that there are various ways of improving the infrastructure so either state aid or leveraging private funds using the EIB so what we are trying to do at the moment for the Junker Plan is to put together a portfolio of possibilities for which companies and which countries can use in order to improve their connectivity. The Scottish Government has the ambition of achieving the roll-out of superfast broadband to 95 per cent of premises by the year 2017-18. That means that we still have the 5 per cent of hard-to-reach premises in Scotland. Does the commission have a view on what novel or innovative solutions or approaches might be helpful in closing that 5 per cent gap of hard-to-reach premises? I am really not an expert on state aid and on these things but I understand that there are particular schemes for areas that have very low connectivity and that can be used but I would have to refer back to you. Is it to do with white areas or something? There are schemes where you can use money in order to help areas that are particularly badly connected but I am sure that your digital Scotland has already looked at those. Perhaps we can encourage you to talk to each other so that we can get the benefit of your expertise as they take those issues forward. Do you have any other questions? Are there any other points that you would like to put on the record? No, not at all. It has been really interesting for me and to hear your concerns when you are in the commission. One of the reasons why we have this local team is to make sure that we are less cut off from the member states because we tend to sit in our policy ivory towers. We are very pleased that you have come out of your ivory tower to visit the Scottish Parliament this morning. I am very happy in this different tower. Thank you very much. I thank you for your attendance this morning and for your comprehensive evidence. I hope that this will be the first of a number of sessions where we can have a useful and constructive dialogue with the European Commission. I look forward to receiving some of the follow-up information that you have referred to this morning and to hearing of the further progress that is made towards achieving the digital single market. Once again, thank you very much. Thank you very much for having me. That concludes today's committee business. I now close this meeting of the committee.