The jury is still out on the man with the eEurope plan

Date: 29/11/01

By Peter Chapman

Telecoms Commissioner Erkki Liikanen may not quite be fighting for his political life.

But the man who managed to survive the collapse of the Santer Commission with a job must know he is up against it to keep his reputation as the EU's "Mr Info-Society".

The self-confessed technology nerd was riding on the crest of a wave as telecoms and technology stocks hit the giddy heights.

He enjoyed the spotlight when he launched ambitious laws designed to reduce the regulatory shackles holding back the industry. And he was the driving force seeking to transform the EU into the most competitive knowledge-based economy in the world by 2010.

Heads of state gave his masterplan the official seal of approval at the Lisbon summit, just as the technology-dominated NASDAQ market was at its peak.

Twenty months on, however, the picture is not so rosy.

The bottom has fallen out of the IT and telecoms market - partly in response to the industry's gamble on massive licence fees for third generation mobile services charged by some governments.

The linchpin of his reform process - a veto on decisions taken by national regulators that could harm the EU's single market - is in doubt as member states fight to control the power of Brussels.

Liikanen's campaign to rid e-mail inboxes of piles of unwanted commercial messages has also hit the rocks.

The dot-eu internet domain name is still undelivered thanks to a debate with member states on the legal modalities, although the Commissioner promises

this will be solved "while there is still snow on the ground" - a Finnish euphemism for "soon".

Finally, a law on "local-loop unbundling", rushed through the EU's corridors of power at record speed to bring competition for fast internet access, has proved a huge flop.

It's not all his fault, but Liikanen has some explaining to do.

On local-loop unbundling, he admits the old monopoly operators have been slow to open up their networks to new entrants.

This has held back competition for the broadband digital subscription lines, (DSL) internet services - something everyone agrees businesses need to get online.

But, insists Liikanen, Rome was not built in a day.

Even the US, where unbundling was launched in 1996, has had to re-write its law because it wasn't quite delivering what it promised.

"Broadband is coming," he says, playing down the mediocre results of the OECD's (Organisation for Economic Cooperation and Development) latest broadband report.

"The data were collected last year - and the regulation only came into force at the beginning of this year. Change has started to take place. This year is the turning point and next year there will be growth."

That doesn't mean the Commission will sit back and let incumbents - or to be precise the member states in which they are based - get away scot-free on unbundling, or anything else for that matter, such as high leased line prices.

"We will be very strict," he says.

This week Liikanen confirmed infringement procedures would be launched on 20 December against "a number of member states" on unbundling.

He says DSL is just one piece in the broadband jigsaw - and that the Commission is working on a plan to boost competition for all kinds of infrastructure - "competition between pipes not just within pipes".

"In broadband we have to do more. We are doing preparations in-house on that. My intention is to reinforce the eEurope action plan in this area.

"It will look how competition between platforms could be encouraged, and how we can combine different strategies. Cable is good; if you are too far from local telephone exchanges DSL does not work. Digital TV is going to be very important, and you have satellites."

If broadband is still a long way off for most EU citizens, some internet service providers (ISPs) have pushed Liikanen for action elsewhere to spur flagging enthusiasm for the internet.

The current favourite is unmetered access - where telecom companies offer ISPs special flat-rate prices for dialling the internet. That means their customers can pay a monthly subscription to the Net and stay online as long as they want without racking up a huge phone bill.

Liikanen says unmetered access is a key issue - but he prefers, "at the moment", to let the market deliver it without EU intervention.

"We hope it comes from competition. Broadband will bring pressure. Now that it is advertised massively it will push operators to offer flat-rate narrowband for those who want less."

On his draft data privacy directive, he has also suffered a bloody nose.

The Commissioner called for companies to seek prior permission or an "opt-in" before sending commercial e-mails to would-be clients. However MEPs voted in favour of letting member states choose to put in place "opt-out" regimes, where citizens put their names on registers of people not wanting to receive messages.

"It's not an easy run. But in political life, you win some, you lose some; let's see when we get to the very end. I think this issue will grow in importance.

"Spam will double and triple everywhere. And it will be more difficult when you go to mobile. I do not see this opt-out working. You try it, writing letters to opt out. I think the consumers have a strong case."

Liikanen is less clear on the row over "cookies" - the technology that tracks web surfers and remembers preferences and passwords - with some MEPs dubbing them a spying device that needs to be controlled.

"In general, people should know more about how they work. I would not want cookies to go to spammers. The idea that your opinion should be asked is not to my mind fundamentally wrong. When your data is used normally you are asked.

"But I don't feel that strongly here because some cookies are very useful."

On third generation mobile services, Liikanen points to the huge licence fees charged by many governments as a kick in the teeth for the industry.

"The burden of licence costs was not under our control. Member states got the money. We can't pay back what member states have got," he says.

But that doesn't mean there should be no attempt to learn from the mistakes of the past and adapt policies.

EU funds are going towards efforts to get content applications for 3G services in a bid to bolster demand when the technology goes on sale.

And cash-strapped mobile firms should be allowed to share infrastructure such as base stations and also "active parts" of the network such as radio access which links telephones to each other, subject to approval from competition chief Mario Monti.

"I see positive developments here. That is a signal that is helpful."

Crucially, Liikanen says mobile issues should be part and parcel of the Commission's bid to get a veto over decisions taken by national regulators who could scupper the single market - article 6 of the draft "framework directive".

"Of course what is important is that we get the legal framework right so that this kind of fragmentation never happens again.

"What we are proposing is that spectrum [for wireless services such as mobile] should be part of article 6. I don't expect that we can decide at European level when a member country takes a decision on ways to do beauty contests or auctions - but firstly we consult each other in detail on how it is done.

"The rules would be checked together first to harmonise them. Secondly consultation should take place before the first member state starts to give spectrum. There should be a level playing field and markets should know how things can develop.

"I am sure that this could help immensely compared with the last situation."

Member states have thus-far resisted efforts by the Commission to get its article 6 veto, although MEPs and the Belgian presidency are working on a compromise.

Liikanen admits that would inevitably mean some ground is given.

But he says MEPs - who have so far supported the Commission - must not give away the veto cheaply.

"The Commission does not want to micro-manage telecom policies. We want to guarantee that there is a coherent internal market. We want to have a say in areas that have internal market importance.

"To my mind this is traditional EU policy - it is accepted and we should just get it through here. We need independent national regulators but if there are EU level implications we should have a say. Otherwise we don't learn from the fragmentation.

"This is a key issue - for us it is extremely important. If you give a message to the market that you have seen the fragmentation but you are not going to do anything that is unacceptable."

If the jury is out on the promises made at Lisbon - and Liikanen's role in shaping eEurope, next March's Barcelona summit is rapidly shaping-up as the chance to get the ball rolling again.

"I have great expectations of Barcelona - and the Commission is doing its part," he says.

Mr Information Society is not letting-on exactly what he has up his sleeve for the Lisbon sequel.

But for a clue, readers could do worse than flick through a copy of the book currently sitting on his desk: The Future of Ideas by internet law guru Lawrence Lessig.

Major interview with Telecoms Commissioner Erkki Liikanen. Article forms part of a special report on telecoms.