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National Operational Broadband Plan NATIONAL OPERATIONAL BROADBAND PLAN MINISTRY OF INFORMATION SOCIETY AND ADMINISTRATION April 2019 1 DOCUMENT OBJECTIVE Republic of North Macedonia, being a candidate country for EU membership, is obliged to harmonise its national policies on electronic communications development with EU policies, in line with which an obligation was imposed to adopt a National Operational Broadband Plan (NOBP), which will be harmonised with the strategic objectives of the EU 2010 initiative on Digital Agenda for Europe1, as an umbrella strategy for information society development, and the EU 2016 strategy Towards a European Gigabit Society2 for 2025. Also, the development of the National Operational Broadband Plan took into consideration the EU recommendations and regulations on the development of the next generations of broadband networks, recommendations for using state aid in broadband development, EU 2018 strategy for enlargement with Western Balkan countries3, EU reports on the broadband market development, reports from international institutions on the electronic communications development in the region (World Bank etc.), reports and experiences of EU member states in using state aid for broadband development, etc. The National Operational Broadband Plan, succeeding the National Strategy for Development of the Next Generation of Broadband Internet, sets the national broadband4 targets that are to be achieved over the next period of time, and defines the measures and activities required for achieving those targets. DEVELOPMENT, REVISION OF THE NATIONAL OPERATIONAL BROADBAND PLAN AND ACTION PLAN FOR ITS IMPLEMENTATION In order the prepare the National Operational Broadband Plan, in early January 2018 the Ministry of Information Society and Administration set up four working groups: - A working group for ensuring improved coordination in the process of mapping of the territory of the country with existing and planned future broadband networks by operators, - A working group for identifying the free capacities and their future use in existing electronic communication networks and facilities constructed with public funding, - A working group for defining the measures and activities required for introducing the 5G mobile technology, and - А working group for defining the draft measures for encouraging and increasing the interest among the citizens for using broadband. The working groups gathered representatives from state authorities and bodies, regulatory bodies, universities, municipalities, operators, economic chambers, public enterprises, private companies, etc. TAIEX technical assistance was also provided for the development of the National Operational Broadband Plan. A web page was launched (http://mioa.gov.mk/?q=mk/node/1313), where all suggestions and comments by all stakeholders, as well minutes from meetings, were posted. As part of the implementation of the NOBP, the Ministry of Information Society and Administration will conduct, every two years, revision of the implementation process, adjust the existing ones or introduce new measures based on the current situation in consultation with all stakeholders. After the adoption of the NOBP by the Government of Republic of North Macedonia, an Action Plan for implementation of the NOBP will be adopted. 1Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, COM(2010) 245 final, A Digital Agenda for Europe 2COM(2016) 587 3 https://ec.europa.eu/commission/sites/beta-political/files/communication-credible-enlargement-perspective-western-balkans_en.pdf 4http://mioa.gov.mk/sites/default/files/pbl_files/documents/strategies/Nacionalna_strategija_za_razvoj_na_sledna_generacija_shirok opojasen_internet_09.pdf 2 NATIONAL BROADBAND TARGETS Taking into consideration the broadband targets of EU5, the mapping that was carried out6 and the announced future investments by operators over the next three years, the national broadband targets of Republic of North Macedonia are as follows: - By the end of 2023, at least one larger city to be covered with 5G signal. - By the end of 2025, the main corridors in accordance with the Treaty establishing the Transport Community on the basic and comprehensive road network in the country should be covered with an uninterrupted 5G signal. - By the end of 2027, all towns in the country are covered with uninterrupted 5G signal. - By the end of 2029, anyone can have the opportunity to access the internet through 5G with a minimum speed of internet access of at least 100 Mbps. - By the end of 2029, at least 50% of the total number of household subscriber contracts across the country are for internet access of at least 100 Mbps. - By the end of 2029, all households will have affordable opportunity to access a network that allows for a download speed of at least 100 Mbps, with a possibility for upgrade to Gigabit speed. - By the end of 2029, all public institutions (schools, universities, research centres and other education institutions, healthcare facilities, ministries, courts, local self-governments and other state authorities and bodies) have symmetrical internet access with a speed of at last 1Gbps. MEASURES AND ACTIVITIES FOR ACHIEVING THE NATIONAL BROADBAND TARGETS FOUR PILLARS: A. USE OF STATE AID B. ADDITIONAL MEASURES FOR ENCOURAGING THE USE OF ACCESS TO ULTRAFAST INTERNET C. IMPROVED LEGAL FRAMEWORK AND REGULATION D. 5G INTRODUCTION AND DEVELOPMENT PLAN ANNEXES - ANNEX 1: EU BROADBAND TARGETS - ANNEX 2: IMPLEMENTED MAPPING - ANNEX 3: SELECTION OF BROADBAND INFRASTRUCTURE - ANNEX 4: SELECTION OF AN INVESTMENT MODEL - ANNEX 5: SELECTION OF A BUSINESS MODEL - ANNEX 6: THE USE OF STATE AID FOR THE DEVELOPMENT OF BROADBAND NETWORKS 5 See Annex – EU Broadband Targets 6 See Annex – Implemented Mapping 3 A. USE OF STATE AID, INVESTMENT MODEL According to the European Commission (Digital Agenda for Europe), in order to achieve the broadband target of ensuring 30 Mbps speed of internet access, it has been estimated7 that EUR 60 billion of investments will be required, whereas for reaching the target of at least 50% of households having internet connections of above 100 Mbps up to EUR 270 billion will be necessary8. Such investments are primarily made by the commercial investors. However, broadband targets defined with the Digital Agenda for Europe cannot be achieved without the support from public funding. Because of this, the European Commission called upon member states to use “public funding in accordance with the EU rules for competition and state aid”9, so as to achieve the broadband targets stipulated in the Digital Agenda for Europe. In line with this, the purpose of using the state aid in the Republic of North Macedonia is to reach the national broadband targets i. to achieve a higher level and a faster rate of coverage and use of broadband connections, compared to a situation without the state aid, thereby supporting greater access to services, higher quality of services and pro- competitive investments. There are various ways for public bodies to be involved in supporting the development of broadband networks in the country. Depending on the broadband networks investment model, public bodies may have a different role in terms of implementation, operation, ownership, and broadband network management. In general, the following investment models are most often represented: - Subsidizing an operator (granting non-refundable public funds) to upgrade its network. - Indirect investment: Privately managed municipal network (also known as concession model). - Direct investment: Publicly managed municipal network. In the Annex – Selection of an investment model, a brief overview of the specific investment models and their features is given (see Table 1). The practice shows that if the implementation of a particular investment model has given positive effects in a particular country, this does not necessarily mean that the same effects will be achieved by implementing that same model in another country. Which investment model will be implemented in the country depends on the cultural and socio-economic situation, the medium and long-term development plans of the area in which the state aid should be used. Specifically for Republic of North Macedonia by applying the investment model - Direct investment: A publicly managed municipal network, in the long run, may be expected to achieve the national broadband targets set by this NOBP. This is so, particularly for the following reasons: - In the rural areas of Republic of North Macedonia, where most of the white zones are located, due to the process of population aging, immigration of the youth, lower education level, poor ICT skills of the population, larger percentage of small and medium enterprises, lower level of innovation, etc., broadband penetration may slow down, thus slowing down ICT penetration as well. Such circumstances could in most cases benefit the models with long-term investments (for instance, direct investment model, i. public body managing the infrastructure), since they allow sufficient time to increase penetration, thus ensuring a gradual socio-economic impact. 7Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, European broadband: investing in digitally driven growth, COM(2010) 472 final. 8 Investment costs could be significantly lower depending of the reusability of the existing infrastructure and depending on the developments
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