European telco associations implore the EU to get back on track

While many would consider the letter a product of a by-gone era, it is apparently pretty useful as a means to display irritation. That is certainly how it’s being used here.

Cable Europe, the Computer & Communications Industry Association, Digital Europe, ETNO, the GSMA and Allied for Startups have all come together to pen another letter of frustration and exasperation to the political leaders attending the Tallinn Digital Summit this week. The message is simple; you’re messing around too much and not spending enough money; you are putting the digital future of the European Union at risk.

“At the same time, we urge the European institutions to use this occasion to re-evaluate the current direction of the EU Digital Single Market legislative debate and compare it with its original objectives,” the letter states.

“We worry that many of the proposals currently under negotiation are drifting off-course, endangering Europe’s digital economy and its global leadership.”

The risk of over regulating or inadequately regulating the digital economy could be disastrous. An ETNO commissioned report released ahead of the conference claims the telco space has lost €100 million a day to disruptive digital technologies who have grasped the opportunity, but also perhaps made use of the regulatory grey areas which are present in the digital society.

We would take the €100 million a day claim with a pinch of salt, ETNO after all does have a weighted interest in created more positive trading conditions for the telcos, but the bigger point is true. Telcos have been losing the digital battle. Part of this will be down to the rigidity and lack of innovation within the telcos themselves, but it is true they are playing to a different, and stricter, rule book.

But ETNO’s issue with the research is focused purely on the negative impact on the telecoms sector, the letter is a much wider issue. Here, the associations aren’t saying the rule makers are messing it up just for the telcos, they’re messing it up for everyone. And it’s not difficult to agree with some of their points.

Looking at the first argument; spend more money.

“Boosting infrastructure deployment for best-in-class connectivity throughout the Continent is crucial to strengthening European competitiveness and to increasing citizens’ welfare,” the letter reads. “This requires a dramatic increase in investment, which depends on the approval of investment-conducive rules.”

The gang seem to be pinning the blame on rules which do not encourage investment or competition. It is a fair point, regulation moves slowly and has not been adapted to inspire capital expenditure. Rules on spectrum and fixed connectivity need to be simplified apparently, which would allow ‘greater predictability and increased consistency in spectrum licensing’.

But the blame cannot be solely placed on the rule makers; the telcos are not innocent here. For the most part there has not been the ambition to invest in infrastructure to lay the foundations of the gigabit society. How long have we been talking about fibre and how far into the journey have we travelled? The blame has to be shared, but it does seem like a convenient excuse for the telcos who have never looked like they want to spend any money.

The second point is an interesting one. The European Union has some of the more stringent data protection and residency rules worldwide, which the letter seems to attack. Germany is a prime example, where rules state personal information has to be kept within the national borders. This is a solid bit of rhetoric for politicians, but should it spread to other countries there is a threat for start-ups.

Imagine having to employ a data protection consultant or compliance expert for every territory you have a presence in. That would be a very expensive job and would possible limit the scaling opportunities for smaller and younger organizations. It is also quite a contradiction to the idea of the Digital Single Market.

Finally, looking forward to new regulations, the letter highlights the ‘well-intended’ e-Privacy rules, which demonstrates major inconsistencies with the GDPR. This could lead to over-regulation, harming the competitiveness of European companies in the global economy, but also to confusion on the part of the consumer. Data protection and privacy rules are already baffling to understand, and EU GDPR will only make things more complicated, so the last thing consumers and businesses need is an extra layer of complexity.

We at Telecoms.com are usually the ones who point the finger at passive aggressive letters, which direct blame away from the authors. There is usually no point in these letters, aside from winning a couple of PR points, but there are a couple of good arguments here. Regulation is a complicated arena right now, and it is only going to get worse. When you are trying to get 27 member states to play nice with each other, perhaps a more hands-off, light-touch approach would be preferable.