A digital single market for Europe – what’s the recipe for getting it right?

A digital single market for Europe – what’s the recipe for getting it right?
08/06/2015 Cable Europe

Matthias Kurth

Executive Chairman,
Cable Europe

If the European Commission was aiming for high visibility with the Digital Single Market Strategy, they certainly hit their mark.  Before the full text of the document was even published, the topic had been embraced by mainstream media with debate stretching way beyond the infamous Brussels Bubble.  Why the leap from specialist to mainstream?  Because the digital economy is not about a set of issues which impact only those engaged in telecoms and media policy.  It’s quite simply about an economy which is digital.  If you live, breathe, work and play in or with Europe, then you’re a stakeholder in the Digital Single Market Strategy.

The Commission’s objective is to be applauded.  With a digital single market, consumers will have more choice, and businesses will have a bigger market.  An economic and societal win-win.

Broadband operators are the enablers of this strategy:  let’s face it – you need great broadband to create a great digital single market. As the saying goes: no broadband, no app.  And the surest way to get great broadband infrastructure is to foster a competitive and innovative market.  Cable operators are the main challengers and competitors to the incumbent telco operators, stimulating a dynamic and fast moving market where the stakes are high.  In fact, half of all European households have the option of connecting to high speed broadband via cable networks.   Competition with telco operators has resulted in various investments cycles which Europe can be proud of.  And there are more investments to come with cable speeds soon to hit 10 Gpbs for download and 2 Gbps for upload.  Doubtless telco incumbents will gradually upgrade their networks too, so we can safely say there’s no cause for alarm when it comes to investment levels in Europe.  Only in rural areas, where we have particularly low population density, is there a potential role for state aid.

Crucial though this investment is to a DSM vision, arguably what matters even more is the interconnection between networks.  When you want to give a call to a friend abroad you can reach him by phone.  You can send a message from France to Finland by email or SMS and get a reply.  Networks both interconnect and compete against each other in any given region – to access the internet you can subscribe to a telco incumbent, a cable operator, a mobile operator or a satellite provider. Once you have accessed the internet you can then use new types of services to communicate with friends and colleagues.  It’s this dynamic between the networks and the services which produces a vibrant and competitive market, which in turn delivers the optimal choice for the consumer.  All these technologies are constantly improving and, as the Commission has previously acknowledged, it is this mix of technologies that will get the best results.  Better speeds, better quality and greater coverage.  We want the Commission to keep this view: recognise the networks as the “enablers” of the DSM and do so in a technology neutral manner – which means not over-regulating networks, and not pre-empting the market by picking out winners.

What matters most regarding the networks is the need to address the question of what businesses and their customers will do with these fantastic networks.

One of the most widely debated topics is whether or not to ban practices like geoblocking, so that customers can access websites that are located in another country (just pick up your ipad in Belgium and try to download an app or a film from the itunes store in the UK).  At first pass a ban on these restrictions sounds both simple and logical.  But a potential ban on geoblocking is of great concern for content owners and producers.

Distribution of content on a territoriality basis is fundamental to the financing model of premium content.  I therefore understand their concern.  Content providers such as TV channels or film studios are organisations with whom cable has a long standing business relationship: they have great content – cable has fast and innovative networks.  Whereas the objective of a single market is of course a positive one, if a DSM strategy seriously weakens the means Europe has to produce and sell quality content we would all be shooting ourselves in the foot.

There is a solution which solves the consumer question without undermining the funding ecosystem: portability of content.  Once a customer has bought content (for example through a cable subscription) this customer should be entitled to view the content “out of home” or when travelling abroad.  The technology is ready for portability to happen. But clearing such rights can sometimes be very complex.

This brings me to a final point: copyright.  This is a key right for authors and composers – copyright protection is of course extremely important.   But the markets have evolved tremendously since the last Directives were adopted.  A review of the EU copyright framework is therefore welcome with the following principles in mind:  technology neutrality, whereby all copyright “users” are treated in a similar way, simplification of the rights and licensing processes, and legal predictability of the rules.

A mix of technologies.  Portability.  Enabling the enablers.  With these cornerstones in place, and by holding firm to a vision of a digital economy which can innovate and flourish through light touch and future proof regulatory policies, the digital single market can deliver its potential.