New Beginnings

  
Fausto Pinto de Matos

With a new legislative cycle about to start, we need to lay down the foundations for an economy that grasps the future, beginning with the digital single market, writes Fausto Pinto de Matos.

Fausto Pinto de Matos is a Portuguese legal advisor running Think Europe – a blog on European issues @fpintodematos

As a new European cycle begins, with a new Parliament and, soon, a new Commission, it provides a good time to pause and reflect on the state of the Union. The past five years were spent in an economic recession, with overwhelming social consequences, namely youth unemployment. Recent signs show we are beginning to turn around. Without disregarding fiscal consolidation, Europe should focus on ensuring that this trend continues – and continues at a faster pace. We need to lay down the foundations for an economy that grasps the future.    

Of all the industries that have the potential to create economic growth, the information and communications technology sector is without a doubt our best opportunity to spur new companies, new jobs and increase productivity.  The need to accomplish a single digital market has already become one of those self-evident truths among European policy makers. Most recently, the new trio of presidencies has repeated the pledge to achieve it by 2015.

Only last week, during the “Digital Venice”, Italian Prime Minister Matteo Renzi echoed Jean Claude Juncker in calling for a European authority in order to push for a truly European digital single market.  But we cannot reach the full potential of a digital single market if most Europeans don’t have Internet access. Italy is a paramount example: 1 out of 3 Italians has never used the Internet. For this status quo to change, we need to allow continental telecom players to flourish.

Looking into the United States market, the importance of continental players is evident. Recon Analytics notes US wireless carriers spent roughly $109.58 per citizen to upgrade wireless infrastructure in 2013, while the 28 states in the European Union spent $27.681 billion, or $54.75 per citizen.  A University of Pennsylvania paper by Christopher Yoo looked at a number of different broadband performance indicators, including network coverage, deployment of fiber and LTE technology investment per household, adoption, speeds, utilization, and price. Among other points, it noted that the US led Europe in national 25 Mbps coverage (82% to 54%) and the U.S. led Europe in LTE coverage (86% to 27%).  

This is not only a problem for the ICT sector. It’s a problem for Europe’s future economic health. Without private investment or access to next-generation technologies, it’s much more difficult to drive innovation, digital literacy or job creation. It’s much more difficult for the continent to achieve a single digital market and all its positive effects, let alone to be a leader in the digital economy.   

Mr. Juncker, was the sole Spitzenkandidat with a comprehensive approach to the digital single market and a clear understanding of the negative impacts of having 28 fragmented markets. During his campaign, the former Luxembourg PM defended competition rules in the digital markets should allow pan-European mergers, along with eliminating “regulatory national silos”.

This includes, I’m sure, a different approach to spectrum auctions. It has been clear for a while how national approaches are closely related to a slow deployment of infrastructures, as they hinder the ability of telecom companies to invest and, sometimes, lead to artificial competitive advantages. I also hope this means re-evaluating copyright rules. Internet is all about content - better content - and for a world audience! As young person myself, I also expect that Jean-Claude Juncker  is able to make Europe attractive to the best young minds, making this continent of ours as innovative as other parts of the world.

Let us just hope the new European Parliament also makes these a priority, in order to deal with the issues that are stifling jobs, investment and growth! 

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