Incentivising network investment, helping telcos compete with over-the-top (OTT) players, and coordinating spectrum rules together form the basis of one of 16 proposals contained within the European Commission’s Digital Single Market (DSM) plan launched on Wednesday.
Some claim the plan lacks substance though. Industry observers and lobby groups cheered the announcement but called on Brussels to explain how it will accomplish its objectives.
The far-reaching and ambitious strategy has three principle goals: to improve cross-border access to digital services; to create a level playing field that will foster growth in digital services and networks; and to maximise the growth potential of the digital economy.
"Today, we lay the groundwork for Europe’s digital future," said European Commission president Jean-Claude Juncker, in a statement. "I want to see pan-continental telecoms networks, digital services that cross borders and a wave of innovative European start-ups. I want to see every consumer getting the best deals and every business accessing the widest market – wherever they are in Europe."
For the telco sector in particular, Brussels wants to introduce common rules that will encourage investment in new fixed and mobile networks.
"The absence of consistent EU-wide objectives and criteria for spectrum ass ignment at national level creates barriers to entry, hinders competition and reduces predictability for investors," the Commission noted. "Therefore, the radio spectrum should be managed by member states under a more harmonised framework that is consistent with the need for a digital single market."
The Commission said the "slow and still incomplete" release of 800-MHz spectrum has impeded the rollout of 4G networks. To avoid a repeat, it will make proposals for the coordinated release of the 700 MHz band.
On the fixed side, the DSM package aims to strike a balance between simplifying regulation in areas where infrastructure competition exists, and incentivising the deployment of new networks while ensuring effective competition and return on investment in areas where infrastructure competition is lacking.
"The Commission will review all of the existing legislation and make proposals for changes where necessary," the EU said.
The DSM plan also acknowledges that consumers increasingly use OTT communication services as substitutes for traditional telco services.
"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," the Commission said.
Industry observers broadly welcomed the announcement, but called for Brussels to press ahead with its plan and provide further details about exactly how it will achieve its goals.
"At the moment all we have seen are media-friendly sound bites about creating a level playing field, rather than any concrete measures," said David Thomas, partner in KPMG’s telecoms team.
"We need to create an environment that incentivises the big digital infrastructure providers to make significant investments in what is an essential utility in our working and personal lives. The EC’s proposals to undertake an a mbitious overhaul of the telecoms regulatory framework have the potential to play a crucial role in this," he said.
"If we are to ensure that Europe leads the digital race, swift and urgent action is needed as a follow-up to the strategy paper and ahead of the broader review of telecom rules, currently planned for 2016. The main drivers of such swift action should be further harmonisation as well as the removal of barriers to investing in network deployment," said a statement from telco-backed lobby group ETNO.
Afke Schaart, vice president of GSMA Europe, said the EU "urgently needs to press ahead with the telecom review, ideally this year.
"The GSMA is calling for clearer, investment-focused signals from the outset that indicate rapid action to bring about a fair and competitive EU telecom policy framework."
Meanwhile, as well as calling for a more ambitious timetable, Vodafone also urged the Commission to allow more cross-border and in-market consolidation.
"Europe’s vision of a true digital single market necessitates rules fit for the digital age," the U.K.-based telco giant said in a statement.
The European Council is set to debate its DSM proposals on 25-26 June. As well as measures to stimulate network investment, the Commission also wants member states to adopt harmonised rules governing e-commerce, data protection, privacy, and copyright, among others. This will make it easier for companies to attract customers in other countries, and broaden the availability of content and services to people throughout the EU.
According to the Commission, today only 15% of consumers shop online from another EU country, while only 7% of SMEs sell cross-border. A fully functional digital single market could contribute €415 billion per year to the European economy and create hundreds of thousands of new jobs.
"Our strategy is an ambitious and necessary programme of initiatives that target areas wh ere the EU can make a real difference," said Andrus Ansip, vice president for the digital single market.
"[The proposed rules] will give people and companies the online freedoms to profit fully from Europe’s huge internal market," he said. "They must be delivered quickly to better help to create jobs and growth. The strategy is our starting point, not the finishing line."
