EU digital single market: Death by compromise

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EU digital single market: Death by compromise

A user’s guide to the Commission’s latest brainstorm.

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The long-awaited, much-ballyhooed Digital Single Market strategy is set to be published at noon Wednesday by the European Commission.

Reaction will be quick, loud and vociferous, but look for clues to the answer to one key question: Will this document really change anything?

For the plan, which (according to the latest leaked draft) will include 16 initiatives across issues such as copyright, e-commerce, telecoms rules, free flows of data and value-added taxes has shaky roots in failed past attempts. It outlines the importance of a single digital market, but doesn’t take a strong stand on some of the efforts that many observers consider essential to get there, such having a single telecom and digital regulator for the European Union.

For years, the Commission has beat the same drum: Europe is falling behind in the digital revolution after a great start with Nokia and the GSM standard. Businesses and consumers can both suffer in a deeply fragmented market.

Past policy initiatives have often foundered because of the Commission’s inability to strike political bargains with the European Council. The question this time is: “Do member states have enough incentive to give up the money or powers to vote yes?” If not, the proposals that will follow from this strategy risk the same deadlocked negotiations.

We handicap those odds, acknowledging that in the world of politics, anything can change:

Digital single market scorecard

1. Delivering on the premise (5/10)

It’s digital but it’s not strategic. The Commission does not explain how or why this plan will work better than the ones before it.

But by all accounts the positive tone of the strategy, which was leaked repeatedly, has been well received.

Chris Sherwood, head of public policy for the Polish-headquarted e-commerce giant Allegro is “very optimistic” about the strategy, because it “rejects the politics of despair and embraces the opportunities provided by digital.”

Telecoms operators, who tended to be disappointed by the previous Digital Commissioner Neelie Kroes, were also upbeat. Alessandro Groppelli, from ETNO, said, “We are delighted that investment in broadband networks will be in the focus of the activities of the new commission.” Other telecoms sources, however, worried about the slow legislative process.

2. Level of ambition (6/10)

Many of the ideas (though recycled compromises) could reshape the digital landscape for the better, but they aren’t revolutionary.

One start-up insider, who previously worked in policy, says: “Here in Europe, we don’t come with really ambitious ideas, we just come with worse than the lowest common denominator, just so we won’t annoy anyone. But that doesn’t win the EU any support, and it doesn’t help Europe.”

3. Political plausibility (4/10)

There’s no roadmap to show how they’ll win over EU national governments, while wandering in national legal competences like postal services and spectrum. There is attempted appeasement of the French and German governments by discussing the regulatory environment of “platforms,” but that will not satisfy.

4. Technical plausibility (8/10)

The practice of setting different prices in different regions or restricting access — known as geo-blocking — could be banned or limited, but it will be very hard to enforce without intrusive surveillance.

A European cloud could work in a research context, but could also become a transatlantic political nightmare if extended beyond this.

5. User friendliness (7/10)

Possible wins for consumers include content portability and interoperability, as well as more guarantees for online shoppers. Businesses and consumers may also cheer increased investment in broadband networks, but are likely to be skeptical about whether the EU deserves all of the credit.

6. Affordability (10/10)

None of the proposals require significant EU investment; there would be incentives for extra broadband investments, but not funded by the EU.

This seems to be good enough for the telecoms companies.

7. Supporting evidence (5/10)

While the strategy is full of statistics, it seems things haven’t moved far since the Commission was heavily criticized for its 2013 telecoms reforms.

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Stan McCoy, president of the Motion Pictures Association in Europe, had issues with the geo-blocking proposals, which he said aren’t based on evidence.

CCIA, an industry group representing some of the largest tech firms including Google and Microsoft, agreed: “What is missing in this whole debate, which is what makes it unclear, is the evidence.”

On the upside, this has also meant that a lot of the strategy is geared towards evidence gathering.

8. Level of policy innovation (4/10)

Some of the current initiatives read as if recycled from past announcements and efforts, such as reviews on copyright, e-privacy, audiovisual and media services, and telecoms. Vague language is likely to fuel debates on topics ranging from copyright, cloud computing and platform regulation.

Regulating geo-blocking, a “free flow of data initiative” (except personal data), and the “platform regulatory environment” are the only genuinely new talking points.

9. Rhetoric matching substance (6/10)

The rhetoric of earlier drafts is toned down, but there is more talk than action in this document. Andrus Ansip, Commissioner for the strategy, has cornered himself by whipping up expectations about ending the “geo-blocking” of digital content, without defining what would still be allowed.

This is likely a relief to some technology companies, worried about heavy-handed regulation of Internet platforms and cloud computing.

Netflix Chief Executive Reed Hastings told POLITICO: “The Commission is dealing with a great frustration people have with the balkanization of content within a single market. (But) we cannot wait for the Commission… What we are trying to do now is all pan-European and global licensing so everyone can get to our content. We’re trying to solve it commercially.”

10. “Shovel-ready” (3/10)

The strategy comes with no legal texts or immediate actions, though official are optimistic proposals can roll off the production line in rapid succession from October 2015. Warning: it could take up to 3 years to be agreed and a further two years to be transposed into national law.

Editor’s note: Before joining POLITICO, Ryan Heath was the spokesman for Neelie Kroes, a former commissioner for the digital agenda. 

Update: this article was updated at 12:00 6 May to reflect that the Commission announced 16 (rather than 15) initiatives in its Digital Single Market plan.

Authors:
Ryan Heath 

and

Zoya Sheftalovich 

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