A draft EU telecoms law could cause major economic growth and create jobs, but there is a high risk it could be diluted by the Brussels compromise machine, write Steven Tas and Lise Fuhr.
Steven Tas is the executive chairman and Lise Fuhr the Director-General of ETNO, the association representing Europe’s telecom operators.
What if a law you didn’t expect saved the EU? The European Parliament and member states are now reviewing the Electronic Communications Code, a reform of telecoms law that sets new rules for developing future digital networks and services. As we face historic challenges, the vision for a European digital single market can ignite confidence and help turn the political climate by boosting growth, job creation and social cohesion.
However, digital reform might be soon stuck in the shifting sands of Brussels’ compromise. We call on members of the European Parliament and on EU governments to save the pro-investment spirit of the law.
Europe wants superfast 5G connectivity, but spectrum reform could effectively be blocked. As the whole world gears up to launch the new standard for fixed and mobile connectivity, most European national governments are resisting draft legislation on spectrum. This means that they expect telecoms operators to deliver 5G connectivity, but do not want to give them the tools to do so.
Those include longer license duration, proper auction design as well as timely allocation of more spectrum for mobile services. What is more, even constituents that have traditionally been supportive – such as the European Parliament – are becoming less vocal in their support to the European Commission’s ambitious approach to spectrum.
Europe also wants fibre networks, but competition risks taking a back seat to regulation. Many in Brussels actually think the two terms are synonymous. For years, the investor community has been clear. Investment will increase when commercial agreements have precedence over regulated solutions, when network regulation is technology neutral and when it incentivises all investment models. Competition should result in a race to invest.
Too many voices in the Brussels debate are still favouring the interest of companies seeking network access as opposed to broader consumer interests. Favouring resellers means defending a business model that artificially maintains network investment low. Consumers want high-quality broadband so they can use more digital services; just think of the convenience of mobile wallets or e-IDs.
Let us not take new services away from citizens by misunderstanding today’s historic challenge. We need massive broadband deployment to ensure that we reach every European citizen, and not only those living in the wealthy urban areas of north-western Europe.
Finally, Europe wants innovation, but new legislation is likely to choke it. Many people in Brussels recognise that European start-ups and businesses have great ideas. However, the gap separating Europe and other world regions in tech and digital investments remains high. Brussels is often big on the innovation rhetoric, but then legislators give in to the temptation of over-regulating digital services.
In the Electronic Communications Code, they maintain sector-specific regulation on telecoms operators and extend part of it to tech companies. By proposing this, the Commission intentionally forgot that many aspects are already dealt with in general laws such as the consumer rights directive. The same applies to privacy: we already have a general data protection regulation that sets strong safeguards for citizens, but newly proposed legislation has re-launched a sector-specific tool: the e-Privacy Regulation. This risks limiting telecoms companies’ ability to improve consumer services and carry out data analytics.
In the age of tech giants and global competition, digital can be Europe’s new coal and steel. For the second time in history, we can re-launch the European project and encourage a societal leap resulting in more opportunities for citizens, more economic growth and increased consumer choice.
But the bigger picture should not be lost in the Brussels compromise swamp. Beyond the stakeholders’ chatter – including our own – we ask EU politicians to focus on the end goal and act now. Europe has a chance to lead, but regulatory choices should follow the political objectives.