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After almost a year of speculation and discussions based, primarily, on rumours, the long-awaited questionnaire on the future of connectivity in Europe got leaked yesterday. Bloomberg reported it first, confirming that the controversial ‘fair share’ proposal had made it into the final draft. A leaked version of the questionnaire also made it into my inbox. Here’s a quick takeaway as I continue to absorb the minutiae of this whole initiative.
The European Commission’s Questionnaire – at least in its current form – is divided into four sections. (Until the European Commission officially launches its consultation, we should operate on the assumption that the questions and format might change).
Rather predictably, the European Commission insists on having a conversation about “fair share”. In the Questionnaire, the European Commission acknowledges that there is a great amount of division between stakeholders regarding the need for such a scheme, though admittedly it fails to reflect the difference in volume when it comes to these views (as the majority have come against any proposition for a fair scheme). To this end, instead of killing this proposal, the European Commission proceeds with presenting a problem that never actually existed. Seeking to appease experts as well as civil society and other organisations that expressed concerns over the future of network neutrality protections in Europe, the questionnaire is fast to ensure that the open and neutral Internet will be preserved according to the Open Internet Access Regulation (EU) 2015/2120; it fails, however, to point out how this will be done. The Questionnaire is silent on the most probable scenario: should a “fair share” scheme go forward, how will it deal with a potentially unruly Content Application Provider (CAP)? What other means beyond blocking or degrading the CAP’s traffic would a telecommunication’s provider have at their disposal? From the Questionnaire it becomes clear that issues of 5G development, the metaverse and cloud computing constitute core components towards ensuring a more competitive Europe in the years to come. The European Commission is right in putting emphasis on these technologies, especially considering the current geopolitical shifts and the way 5G, in particular, has become central to the way Europe has reordered and reorganised its relationships with international partners. To this end, the European Commission rightly underscores the interdependencies in its critical infrastructure and the potential vulnerabilities that these create for existing and future technologies. All this is quite fair and clear. What is unclear, however, is how a ‘fair share’ contribution will alleviate any of these dependencies. On the contrary, one would think that it could further exacerbate them. Moreover, it is also rather confusing the way the Questionnaire seeks to address security concerns and the nexus it seeks to create between them and infrastructure. Is the European Commission suggesting that, without proper financial support, all these new systems would end up being not secure? Is the European Commission implying that the security of the European infrastructure is dependent on foreign investment? I would think not. The language, however, in the Questionnaire seems to suggest that Europe’s security will be – to a large extent – contingent on the availability of financial support. “In light of this, additional needs and increased cost for strengthening the cybersecurity, and the resilience and redundancy of networks might be triggered”. Moreover, and in somewhat a disappointing way, the Questionnaire fails to reflect on the significant consumer protection issues that were previously raised by various bodies, especially the European Consumer Organization (BEUC). In its preliminary assessment back in September 2022, BEUC mentioned that “establishing measures” emanating from a fair share rationale, “would range from a potential distortion of competition on the telecom market, negatively impacting the diversity of products, prices and performance, to the potential impacts on net neutrality, which could undermine the open and free access to Internet as consumers know it today.” The European Commission should have been careful in pointing to these concerns and make them part of its public consultation. Although there is a whole section dedicated to consumer fairness, this section provides more of an account of the successes Europe has achieved in creating an affordable environment for consumers over the years rather than an exploration of how consumers may be impacted - negatively or positively - from any change in the interconnection market. Unfortunately, the whole consumer section appears to be a build-up to a worrying warning - that European consumers should be prepared to bear some costs from a change in Europe’s consumer market. “The current economic conjecture, the rising inflation and cost of energy for the businesses, and some of the technological and market developments [...] are likely to lead upwards pressure on costs for consumers at least in the short term”. It is true that Europe is suffering both from rising inflation and energy costs and that both could end up affecting consumers. Therefore, it really begs the question why the Commission would want to add more financial pressure on consumers by seeking to upend the whole interconnection market, through a “fair share” proposal. And, there is no question that this is what will happen given the experience from the South Korean market. Finally, the most obvious question missing from the European Commission’s questionnaire, and one that many others have asked, is why it is so keen to intervene in the absence of a market failure. Is it the cost of regulation? Is it the strict merger policy in the EU telecoms area (for national mergers, not cross-border mergers)? Is it a lack of innovation-mindness? Or, is there an effective market failure problem? I don’t think that anyone would be against regulation that aims to address market failures, but we should question any attempt that seeks to create the conditions for such regulation to exist. It’s easy to see how the European Commission has opted to address this highly controversial issue. Right at the start of the Questionnaire, it sets the tone of how one should proceed reading it. “The growing requirements for strategic autonomy, security and sovereignty regarding key enabling technologies in the electronic communications area will also have a significant impact on future developments”. The European Commission continues to be riding on the undefined, vague and potentially problematic for the global and open Internet notion of digital sovereignty. For anyone following European digital policy, this language is not unfamiliar; after all, digital sovereignty has defined much of Europe’s digital agenda in recent years. The idea that Europe should be able to determine its own technological future, act autonomously and cut itself from foreign dependencies has been a key driver for most of its major legislative proposals; to an extent, this idea has also legitimised the European Commission’s hard stance on many issues, from content moderation to competition and Artificial Intelligence (AI). There was no reason to think that discussions on infrastructure and the future of connectivity would be any different. However, it should be noted that Europe’s digital sovereignty approach has also raised significant concerns about its contributing role on Internet fragmentation. At first read, the Questionnaire seems messy and sounds more like an industrial policy document rather than a real attempt at understanding how investment and innovation should take place within Europe. It is disappointing to see the European Commission condensing so many different and important things in one questionnaire under such a politically-loaded environment. Discussion about the future of Europe’s infrastructure and connectivity are crucial for Europe and should take place; however, they must be detached from any attempt that seeks to pit actors against one another, especially when all of them are contributing in different ways to the Internet’s value chain. Comments are closed.
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