EU plays catch-up with US digital economy

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EU telecoms ministers came to an agreement yesterday (31 May) to boost Europe's digital competitiveness and prevent start-ups from migrating to the US to reap the benefits of a market that is easier to navigate.

In a Brussels meeting dedicated to enhancing the EU's digital economy, the telecoms ministers said time was running out to catch up with the USA's booming digital economy.

Their comments came after the EU's commissioner for the 'Digital Agenda', Neelie Kroes, personally presented them with her 39-page plan to boost the EU's ICT industry by rolling out more and faster Internet connections and eliminating obstacles to cross-border eCommerce (EurActiv 19/05/10).

Getting start-ups to stay in EU

France in particular took a hard line against the EU's lacklustre competitiveness compared to its American and Asian counterparts.

"We don't want our start-ups to run away to the US because our markets are too fragmented," said Nathalie Kosciusko-Morizet, the French minister of state responsible for digital affairs.

Kosciusko-Morizet said she wanted to see a more coherent market for the "Facebooks and YouTubes of the future".

Diplomats said that Kroes' plan was warmly welcomed by ministers who said it echoed their own national objectives to boost both connectivity and competition in electronic communications.

The German minister for economics and technology, Rainer Brüderle, also climbed on board, saying that he would be pushing for progress on the EU's Digital Agenda, which was very much in line with his country's own policy on boosting growth in electronic communications.

Brüderle also told the press he hoped countries struggling with austere budget cuts and deficits, like Greece, were just as committed to a plan that would boost their own economies.

Start-ups in the US have many reasons to be happier than their European counterparts, including cheaper patents, more forgiving bankruptcy rules and a livelier venture capital market.

The cost of a European patent is almost five times that in the US and three times the cost in Japan, according to figures from a study by the Association of Competitive Technologies.

The French minister also urged her colleagues to work harder on defining policies to preserve net neutrality, a way of preventing Internet Service Providers from imposing restrictions on users' access to desired content on the Internet.

"We do not have the same lively discussion on net neutrality in the EU as they do in the US," the French minister said.

Next generation internet

The EU's veritable bone of contention – how to get investors interested in upgrading the EU's Internet infrastructure – was barely mentioned by the ministers, who are awaiting a policy proposal from the European Commission.

Kroes has been biding her time on the contested Next Generation Access proposal, with an ongoing stakeholder consultation delaying its actual publication date from June to September.

In theory, the plan is to write a policy that encourages large telecoms companies to invest in infrastructure in rural areas, while creating the right conditions for smaller operators to get their share of the market.

Previous drafts fell after incumbent network operators felt their position in the market was under threat (EurActiv 03/03/10).

Riga to host EU telecoms regulator

Ministers also gave a token nod to putting the new seat of the EU's Body of European Regulators for Electronic Communications (BEREC) in Riga, Latvia, a suggestion made by the country's Minister of Transport and Communication Kaspars Gerhards in March.

Latvia is one of the few EU member states that does not yet have an EU agency.

A smaller item on the ministers' agenda was a plan to create an EU code of online rights.

According to Kroes' Digital Agenda, the Commission will publish a Code of EU Online Rights by 2012, summarising existing digital user rights in the EU in a clear and accessible way,

"Community law regulating the electronic network and services sector provides a high level of protection of rights for the users of these services. However, European citizens are often not aware of all these rights or how to exercise them as they are scattered in a number of different instruments," read a statement from yesterday's meeting.

  • Sept. 2010: Commission to table proposals on Next Generation Networks.
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