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EU unveils five-year digital economy plan

Published 19 May 2010 - Updated 05 January 2011
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European Commission Vice-President Neelie Kroes today (19 May) unveiled her strategy to create a "virtuous and self-replicating digital economy". The five-year plan concentrates on infrastructure for high-speed Internet and fostering a borderless market for online music and film.  

Kroes, who has held the Commission's new 'digital agenda' portfolio for almost three months, presented a 39-page plan to boost the digital economy.  

The plan aims "to put the interests of Europe's citizens and businesses at the forefront of the digital revolution and maximise the potential of Information and Communications Technologies (ICTs) to advance job creation, sustainability and social inclusion," Kroes said in a statement. 

Creating a single market for the EU's cultural content and innovations, with interoperable standards and greater network security, are also high on the Commissioner's political priorities.

A proposal on high-speed networks is expected to make an appearance soon as previous attempts failed after pressure from disgruntled lobbies (EurActiv 03/03/10).

This year, the commissioner has also vowed to tackle the bugbear of rights management in the EU by introducing a pan-European system of collecting royalties for the use of creative content like music and film.

The following is a list of further targets that were unveiled in today's plan:

  • Ultra-fast broadband by 2020: 50% of European households should have subscriptions above 100Mbps (no baseline).
  • Promoting eCommerce: 50% of the population should be buying online by 2015.
  • Cross-border eCommerce: 20% of the population should be buying across borders online by 2015.
  • Single market for telecoms services: the difference between roaming and national tariffs should approach zero by 2015.
  • ICT R&D increase: Double public investment to €11 billion.

Critics say the Commission's proposal is a careful reconciliation of lobbyists and internal concerns, especially with regard to copyright, which lately has become a bone of contention between Kroes and her French colleague, Internal Market Commissioner Michel Barnier, who is an advocate of a clampdown on copyright violations.

In the final hours, Kroes resisted pressure from Barnier to take a tough line on copyright violation, according to sources close to the Commission.

The EU executive has long been trying to write rules to prevent piracy of intellectual property and is also engaging in international trade talks to forge an Anti-Counterfeiting Trade Agreement (EurActiv 22/03/10).

Drafts seen by EurActiv show that the wording on possible new laws to fight copyright violations has been watered down and that, as far as Kroes is concerned, nothing will be done before 2012.

However, Barnier - a Frenchman - has had the text of the EU's Intellectual Property Rights Enforcement Directive (IPRED) on his desk for a while, with a review in mind shortly.

Kroes' decision to overrule Barnier's position has received praise but also harsh criticism from industry sources, who argue that she will do little to address Asia's dominance in ICT without stricter rules on copyright enforcement.

The paper admits that only one of the nine ICT application companies present in the Financial Times Global 500 list is European and only four of the top 54 websites visited across Europe are of European origin.

"Do we have cheap labour in Europe? No. We have intellectual capital, which if overlooked implies there is no need to protect our comparative advantage," Franciso Mingorance from the Business Software Alliance - a trade group - told EurActiv, criticising Kroes' decision.

Mingorance referred to a Chinese law which has been deemed protectionist and harmful to European innovation by the EU's ICT lobbies.

The law's provisions stipulate that in order for foreign companies to gain access to the Chinese market, at least some of a product's parts or technology should be home-grown (EurActiv 10/12/09).

Positions: 

Welcoming the Commission's plan, German liberal MEP and European Parliament Vice-President Silvana Koch-Mehrin (ALDE), who takes a close interest in the digital economy, said: "It is good that Commissioner Kroes has quickly come through with this important and comprehensive document. The text makes very clear that Europe now needs impulses for growth that may derive in particular from the digital economy. We have to intensively explore new sources to boost the economy, therefore the European Union should take coherent action, e.g. by the creation of a digital internal market."

"A fully functioning single market would benefit consumers and businesses by bringing wider choice, lower prices and higher broadband speeds," said Hubertus Von Roenne, chairman of ECTA, the European Competitive Telecommunication Association.

Commenting on the European Commission's Digital Agenda, Frédéric Donck, director of the European Bureau of the Internet Society (ISOC), said: "This eagerly awaited first flagship of the Commission's 2020 strategy includes welcome moves on interoperability and network confidence."

"In addressing the issue of cyber security, we would encourage the European Commission and European member states to focus primarily on enforcing laws that already exist in the non-digital world rather than focusing on creating new legal systems that only address criminal behaviour in cyberspace. European policymakers and governments should also work with the Internet community to ensure that users have the information and skills they need to use the Internet safely and within the law," Donck's statement continued. 

"We are actually delivering ultra high-speed broadband networks today and see a quickly expanding reach among our 72 million customers across Europe. We want to reach more citizens and the EU wants us to as well," said Cable Europe President Manuel Kohnstamm.

"We share these strategic goals with the Commission, and we'll keep up the pace for Europe's digitisation. Our continued network investments keep pushing the competition," Kohnstamm said. 

"The whole Digital Agenda is the partly the equivocal result of ongoing tensions within the Commission, but it also reveals intense pressure coming from corporate lobbies. While parts of the agenda are somehow disappointing for open standards and free software users, the proposals are quite encouraging overall," said Jérémie Zimmermann, spokesperson for citizen-advocacy group La Quadrature du Net

"That said, the Digital Agenda is not binding for the future of EU legislation. It should be an invitation for every citizen to ensure that this constructive document turns into a continued commitment to the public interest. We congratulate Ms. Kroes and hope that she will be able to stand strong against special interests in order to pave the way for a true knowledge society, respectful of people's fundamental freedoms," Zimmerman added. 

The European Committee for Interoperable Systems (ECIS) also welcomed the Commission's tough stance on creating interoperable standards in ICT. "As our name suggests, interoperability is a central tenet of our group," said Thomas Vinjecounsel and spokesman for ECIS

"We're pleased the European Commission has given broad support to interoperability, and gratified it believes government acquisition of software should adhere to open standards," Vinje added. 

Bridget Cosgrave, director-general of trade group DIGITALEUROPE, responded by saying: "The Digital Agenda for Europe together with the 'Europe's Digital Competitiveness Report' published this week by the European Commission, are required reading for all ministers in all member states."

"Alongside budget-cutting programmes, we should be seeing digital agendas from every EU head of state," said Cosgrave.

Ross Biggam, director-general of the Association of Commercial Television Europe, said: "There are very important policy initiatives laid down in the document, on which we are very much looking forward to working with the EU institutions. In particular, we look forward to the opportunity of explaining to the Commission, in the context of the new Green Paper on Audiovisual Content, how copyright is evolving – as indeed it has done for the past 300 years – to meet the new technological challenges."

Jonathan Zuck, president of the Association of Competitive Technologies, stated: "Developing European digital services and products is crucial. European SMEs are not only users but often pioneers in developing new and original services which are critical for EU employment, competitiveness and growth. If we talk about our digital future, then innovative SMEs have to be a focal point. Policies should protect users and consumers, but also promote the innovative creators behind successful technologies."

"ETNO applauds the focus on the need to accelerate the deployment of fast and very fast fixed and wireless broadband access networks and to reinforce incentives for private investment," said Michael Bartholomew, director of the European Telecommunications Network Operators association (ETNO).

"The forthcoming NGA Recommendation should now reflect the priorities of the Digital Agenda by allowing for a more targeted regulatory approach for next generation access networks. Any regulatory approach to NGA should take into account the high investment risks, the varying levels of competition in different geographic areas and promote a fair sharing of risks between investors and access seekers," added Bartholomew.  

The European Broadcasting Union welcomed the Commission's plan to simplify copyright clearance, management and cross-border licensing.

"The modernisation of the current copyright clearance system for audiovisual media would encourage innovation and ensure that audiences can legally access media content on a range of new digital platforms, therefore facilitating the development of a successful Digital Agenda," the EBU said.

When updating the existing framework, the EBU urged the Commission to adopt a sectoral approach respecting all rights holders.

"It is with great interest and anticipation that we take note of the European Commission's plans to put interoperability, inclusion and consumer trust at the centre of the Digital Single Market," said Stephen Russell, secretary-general of consumer group ANEC.

"In particular, we welcome the adoption of the principle of 'privacy by design' to ensure the fundamental rights of privacy and data protection are respected," Russell added.

"It is a well-structured plan that recognises the role of all stakeholders in delivering the Digital Agenda," said Martin Whitehead, director of the European association for the mobile telecommunications industry, GSMA Europe

"In particular at this point in time, we would like to re-emphasise the need to fix a date for EU countries to commit to the harmonised release of the 790-862 MHz digital dividend band for wireless broadband services – as this will provide one of the key building blocks to helping the digital economy flourish," Whitehead added.

Background: 

On 1 June 2005, the European Commission presented an i2010 action plan, which is still in force today. Entitled 'A European information society for growth and employment', this new strategic framework defines the general policy guidelines for information society and media.

One of the priorities of i2010 is to avoid a 'digital divide' between the richest and poorest regions in the EU – which have less access to the Internet or new digital services – and between member states.

For his second term in office, European Commission President José Manuel Barroso created a new 'digital agenda' portfolio, which was handed to Neelie Kroes.

Kroes was competition commissioner in the previous EU executive and led antitrust investigations into ICT industry giants Intel and Microsoft, which were fined record amounts on antitrust charges (EurActiv 14/05/09).

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