IBC
The European Commission (EC) is pressing ahead with plans to create a Digital Single Market for pan-continental telecoms networks, cross-border digital services and a wave of innovative European start-ups.
The initiative, published earlier this month, is intended to lift the barriers to online trade and thereby increase GDP among member states by a whopping €415 billion a year by giving access to 500 million citizens. But the plan has been met with a mixed reception.
Digital trade remains provincial across the EU, split into 28 sets of national contract laws. The EU reported that only 4% of internet traffic from EU countries goes to online services in another European country, whereas 54% of it goes to services in the U.S., the EU reported.
“People must be able to freely go across borders online just as they do offline,” declared EC Vice President, Andrus Ansip. “Innovative businesses must be helped to grow across the EU, not remain locked into their home market. This will be an uphill struggle all the way, but we need an ambitious start. Europe should benefit fully from the digital age: better services, more participation and new jobs.”
The most controversial of the Digital Single Market's (DSM) 16-point proposals is to “end unjustified geo-blocking” - the process by which businesses in one country restrict access to websites or content based in another.
A related aim is to rewrite copyright legislation to recognise the “portability of legally acquired content.” In other words, if you have legally paid for an online service while at home you should be able to access it in another EU country.
That may make sense and the EC provides research to back it up. It suggests that one in three Europeans is interested in watching or listening to content from their home country when abroad, and that one in five EU citizens would like to access content from other EU countries.
However, the practicality of seeking to abolish geo-blocking while continuing to protect territorial copyright has been questioned.
While a single digital market would benefit global players like Netflix, the proposal as it stands could be challenged by rights holders and distributors whose business model is built on charging different rates for downloads and streaming services depending on demand in each nation.
“This is empire building,” analyst Alice Enders told The Telegraph. “It’s a long-standing ambition of the EC to take control of copyright, but there is just no real evidence of cross-border demand. Britain has a very mature and well developed media market where companies can make a good return compared with most other European countries.”
The ambiguity is at least recognised by the EC which states that: “Financing of the audiovisual sector widely relies on a system based on territorial exclusivity, which as such cannot be considered as unjustified geo-blocking. Being able to access online content legally across borders will help deal with geo-blocking concerns, while respecting the value of rights in the audiovisual sector.”
"The aim is to improve people's access to cultural content online – thereby nurturing cultural diversity – while opening new opportunities for creators and the content industry,” the DSM proposal reads. “In particular, the EC wants to ensure that users who buy films, music or articles at home can also enjoy them while travelling across Europe. The EC will also look at the role of online intermediaries in relation to copyright-protected work. It will step up enforcement against commercial-scale infringements of intellectual property rights."
The Digital Single Market strategy is further intended to lift Europe's digital businesses, an an area in which Europe “has dropped from world leader to second-tier player in only a few years.”
In the EC's opinion, European start-ups have been hindered from becoming internet giants because they have lacked the scale of a single market - unlike their US counterparts.
The EC said it would launch a “comprehensive assessment” of the role of “platforms” like Facebook, Amazon, Microsoft and Google and potential abuse of market power by the end of 2015.
This has raised alarm across the Atlantic. “It appears (the proposals) would create a single market for Europe at the expense of the global digital economy,” commented Robert Atkinson, president of Washington-based think tank the Information Technology and Innovation Foundation. “The digital single market should be a pathway towards integrating Europe into the global Internet economy, not a strategy for isolating Europe from the rest of the world. In particular, the EU should avoid developing European-only, government-led technology standards.”
The lack of a single market has also plagued comprehensive rollout of 4G services.
Ansip added there would be no possibility of a DSM without “deep cooperation in the field of spectrum”.
Innovations such as cloud services, data analytics improving efficiency in industrial processes and intelligent connected machines could add more than €2000 billion to Europe’s GDP by 2030, said the EC.
“Europe cannot be at the forefront of the digital revolution with a patchwork of 28 different rules for telecommunications services, copyright, IT security and data protection,” declared EC Commissioner for Digital, Economy and Society, Günther Oettinger. “We need a European market which allows new business models to flourish, start-ups to grow and the industry to take advantage of the Internet of Things.”
The proposals for the DSM will be on the agenda of the European Council meeting on June 25-26 2015. A final draft of proposals will then go to individual European parliaments to be debated and potentially amended. The European parliament will then vote on a final draft but it could take several years for legislation to come into effect.
Having hosted major speeches from Europe's previous digital commissioner Neelie Kroes last year, IBC will be the place where the business, technology and politics of Europe's media plays out.
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