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In praise of the Digital Single Market strategy for Europe… and the world

May 6, 2015

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The European Commission's strategy for creating and strengthening a Digital Single Market in Europe is one of the most forward-looking documents to emerge from Brussels in years.

The plan aims to make the Information Communications and Technology (ICT) sector the foundation of the Continent's innovation economy, bolstering European consumers and businesses' ability to accomplish nearly everything in the digital world they do in the physical world. The result, however ambitious and however long it could take, would be the kind of borderless ecosystem the European Union has strived to achieve for decades.

"Our Strategy is an ambitious and necessary program of initiatives that target areas where the EU can make a real difference,” said Andrus Ansip, Commission vice president for the Digital Single Market. “They must be delivered quickly to better help to create jobs and growth. The Strategy is our starting point, not the finishing line."

For now, the plan warns, "fragmentation and barriers that do not exist in the physical Single Market are holding the EU back."

But the Commission estimates removal of the union's digital barriers would contribute an additional 415 billion euros to EU gross domestic product, while the potential benefits to Europeans' lives go beyond the numbers. If the right policies and legal safeguards are put in place and a sustainable infrastructure is built, citizens of all Member States would share equal access to digital goods and services, while businesses would share equal access to consumers regardless of which Member State they're in.

"Our economies and societies are going digital. Future prosperity will depend largely on how well we master this transition,” Commissioner for the Digital Economy and Society Günther Oettinger said. “Europe has strengths to build on, but also homework to do, in particular to make sure its industries adapt, and its citizens make full use of the potential of new digital services and goods."

As governments and economies around the world try to figure out how to turn into reality the Internet of Things -- and a universally connected environment -- the EU is one of the first trying to lay out concrete plans to do so.

And if some of the policies suggested by the plan are likely to provoke debate, several themes seem irrefutable, most notably the following: Dependable high-speed wireless networks built on secure and trustworthy infrastructure will be the key.

That's where the Commission's strategy for the so-called DSM seems to be confronting globalization and economic realities as they are rather than how officials wish they'd be in a perfect world.

The Importance of Standards in the 5G Era

The Commission rightly believes that "digitization of all sectors will be needed if the EU is to maintain its competitiveness, keep a strong industrial base and manage the transition to a smart industrial and services economy."

“Creating the right conditions for digital networks and services to flourish … requires high-speed, secure and trustworthy infrastructures and content services, supported by the right regulatory conditions for innovation, investment, fair competition and a level playing field,” according to the plan.

The strategy goes on to note that the key to incentivizing this investment and nurturing a competitive environment will be an integrated standardization process, strong protection of intellectual property -- for the tech inventions and content that define the new age -- spectrum policies that foster optimum use of the airwaves, and data privacy rules that put control in the hands of the consumers.

Merit-based standards will help make Europe competitive in the sectors responsible for equipping the global sectors for the Internet of Things, and they will better position European players to meet the demands of consumers and the business world. They will also make possible higher levels of interoperability -- assuring, among other things, the safety and security of consumers' data as it flows from device to device, environment to environment.

Standardization “can help steer the development of new technologies such as 5G wireless communications, digitization of manufacturing (Industry 4.0) and construction processes, data driven services, cloud services, cybersecurity, e-health, e-transport and mobile payments,” the plan says.

Incentivizing Inventors and Creators

The Commission also recognizes how much the success of standardization is closely tied to strong intellectual property protection, and that rock-solid copyright and patent protection will be needed to draw the investment and resources from invention and media companies to engineer new technologies for the next-generation networks and create the content users will access over those networks.

“In the digital economy, standard essential patents (standards that are based on patents as proprietary rights) are an increasingly important feature in standardization and an important element of the business model for many industries in terms of monetizing their investment in research and innovation,” the plan says.

And for the content the flows along new networks, “an effective and balanced civil enforcement system against commercial scale infringements of copyright is central to investment in innovation and job creation,” the Commission notes. “Measures to safeguard fair remuneration of creators also need to be considered in order to encourage the future generation of content.”

In this sense, the DSM emphasis on intellectual property protection suggests policy decisions will aim to support European engineering and creative talent as the strongest bastion against global competition.

“Copyright underpins creativity and the cultural industry in Europe. The EU strongly relies on creativity to compete globally and is a world leader in certain copyright-intensive sectors. Digital content is one of the main drivers of the growth of the digital economy,” the plan says. “Fifty-six percent of Europeans use the internet for cultural purposes and spending on digital entertainment media is predicted to see double digit growth rates (around 12%) for the next five years.”

It’s All About Mobility

Moreover, the plan recognizes that “behavior is changing as consumers increasingly view content on mobile devices and expect to be able to access content from everywhere and wherever they are.”

This usage and growing bandwidth demands of cloud computing and new tools for big data, according to the strategy, highlight the need for "reliable, trustworthy, high-speed, affordable networks and services that safeguard consumers' fundamental rights to privacy and personal data protection while also encouraging innovation.”

This, in turn, “requires a strong, competitive and dynamic telecoms sector to carry out the necessary investments, to exploit innovations such as Cloud computing, Big Data tools or the Internet of Things.”

"Radio spectrum is a vital building block for the deployment of broadband services," the plan adds. Specifically, in a bid to give Europeans residing in rural areas equal access to 4G wireless service, the strategy includes a plan to make specific proposals for action on the "coordinated release of the 700 MHz band."

A ‘Level Playing Field’

And an important imbalance to fix: Currently, "Telecoms operators compete with services which are increasingly used by end-users as substitutes for traditional electronic communications services such as voice telephony, but which are not subject to the same regulatory regime,” the plan says. “The review of the telecoms rules will look at ways of ensuring a level playing field for players to the extent that they provide competing services and also of meeting the long term connectivity needs of the EU.”

Last but not least, data privacy: Europeans worry about how much personal data search engines, online services and mobile apps sometimes ask of them and sometimes harvest from their digital activities without asking.

The plan envisions new privacy rules, and it would be great to see the Commission’s implementation of the DSM create a user-centric era where users can control how their data is used and valued.

On all of these issues, "a key aim of the Digital Single Market Strategy is to establish a supportive investment climate for digital networks, research and innovative business,” according to the plan. “Setting the right framework conditions will help to mobilize private investment and generate investor confidence.”

It is a worthy goal.

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William Bold

Senior Vice President, Government Affairs, Qualcomm Incorporated