Pierre Louette. :
It can affect us all but the effects of digitalisation can also be as disruptive as they are constructive. Europe already faces considerable political challenges, and now the rapid rate of technological change is calling into question its existing social, economic and regulatory structures.
In order to strengthen its competitiveness and leadership on the world stage, Europe must turn this challenge into an opportunity.
As we set out to establish a regulatory framework for the digital era, two goals should take priority: guaranteeing state-of-the-art fixed and wireless connectivity for all European citizens and businesses, and promoting the right to digital services innovation for all market players.
Incentivising investment in very high capacity networks is key to achieving the first of these goals, while clear, fair and more horizontal rules will enable the second.
In this regard, the European Commission’s proposal for a new European Electronic Communications Code is an important step forward. With a mandate to deliver greater connectivity, drive infrastructure-based competition and support innovation, this new piece of legislation could secure the long-term interests of all European citizens.
The Code establishes a more targeted approach to regulatory measures and increases the role of symmetric rules and long-term commercial or co-investment agreements. Experience in Spain and France shows that such co-investment models can indeed accelerate fibre rollout.
The Code also aims to improve coordination around spectrum; essential for creating a truly single market. However, there are certain aspects of the Code which should be reconsidered, lest they inadvertently put the brakes on digital progress.
When it comes to regulation, less is often more. For instance, mobile markets remain fiercely competitive while staying largely unregulated, which inherently means that mobile network sharing should remain voluntary.
Investing in high-capacity networks is a significant undertaking, and if those who do so are obliged to open up their mobile network beyond what may have been agreed in their license terms, the incentive to invest may quickly dwindle. For similar reasons, the EU’s existing system of competing mobile licenses should remain the cornerstone of our spectrum policy.
Another cause for concern within the draft Code is how to ensure that all players can provide innovative services under the same conditions. To achieve this goal, the Code should focus solely on sector-specific consumer protection rules – namely related to regulating internet access and use of the telephone numbering plan. Existing consumer protection and e-commerce rules are sufficient to cover other areas.
As a general principle, rules should be based on the nature of the service being provided, rather than on the technical means being used. This is simply common sense. On the contrary, the Code’s current wording on services implies that rules designed for traditional telephony may also apply to the brave new world of the Internet of Things (IoT).
This means one could apply rules on number portability – which allow you to keep your phone number when you switch providers – to any IoT service, such as a connected fridge or car, sold alongside an electronic communication service. This carries a high risk of hampering the development of innovative new services.
Any reform of digital regulation needs to prioritise incentivising investment and innovation for all. By fostering an atmosphere of simplicity, stability and predictability via proportionate, outcome-focused rules, policy makers can help fuel digital breakthroughs, the likes of which we can’t even dream of yet. And under these circumstances, we can write a new success story for every one of Europe’s citizens.
(Pierre Louette is deputy CEO at Orange).
