EU Digital Single Market move a bit OTT

Written by on April 20, 2015 in Opinion with 0 Comments

Large football stadium with lightsThere are some interesting manoeuvres beginning on the European front. The VP for the Digital Single Market, Andrus Ansip, will be announcing his new single market strategy on 6th May. Before then, there is much speculation about what the direction will be. Not surprisingly the large telcos are lobbying for lighter regulation (for them) and heavier regulation for Digital Service Providers (DSPs) such as Google and WhatsApp. WhatsApp seems to have attracted particular attention.

It seems that this is an effort to implement a form of net neutrality across Europe. And yet it seems rather different from the approach adopted by Ansip’s predecessor Neelie Kroes (her job title was Commissioner for the Digital Agenda whereas Ansip is leading the ‘Digital Single Market’ initiative). Kroes, whose term finished last year, was a champion of DSPs, saying in her last public appearance that “the current situation of European telcos is not the ‘fault’ of those OTTs. [They] are the ones driving digital demand, demand for your services. That is something you can work with, not against.”

The difference in emphasis is quite telling. Kroes’ stance was to leave competition to sort out the market, while trying to abolish artificially high data roaming charges. Ansip, on the other hand, seems to be leading the EU down a slightly different course. In his Mission Letter to Ansip, President of EU Jean-Claude Juncker said he would like to see ‘ within the first six months of the mandate, ambitious legislative steps towards a connected Digital Single Market, notably by adding more ambition to the ongoing reform of our telecoms rules.’

Does this mean that the legislation will be designed to artificially produce a ‘level playing field’ by forcing companies like WhatsApp to behave more like regulated phone companies? If so, and if it includes loosening the ‘burden’ of regulation on established, regulated companies – it may be a flawed strategy.

Another, related story, flags up a review of search engines. The implications of this are that the dominance of search giants such as Google, Microsoft and Yahoo are not allowing European search engines a chance to succeed. Frankly, thinking of a European search engine is quite difficult. What might be quite serious is that this ‘review’ of the transparency and fairness of searches is not going down well ‘across the pond.’ The US, not surprisingly, sees a review of DSP practices – including how they use customer data – as anti-competitive.

We see it as a backward step, if the agenda for the ‘Digital Single Market’ seeks to artificially ‘fix’ the playing field. Innovation comes primarily from the DSPs. Telcos and DSPs will need to partner to achieve the full potential of raising their game in product innovation and service levels. Google, for instance, is preparing to work with European telcos to offer roaming to Europe free of excess data charges. This initiative, and others like it, will surely be more effective at producing a genuinely level playing field than artificial regulation. Only the agile telco will transform itself into a partner worthy of DSPs. To try and slow down the rate that this happens, or fix it with red tape, is contrary to the direction of play.

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About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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