Digital-era lawmakers must switch on and tone down

Europe is already behind the US. Now its comparative advantage in new media is under attack from emerging economies, says Erika Mann

For years, the world has been talking about globalisation. Now, we are realising that we live in a global world. For years, the world has been talking about emerging countries becoming new global players. Now we are realising that China, Brazil and India are economic world powers.

At the same time, the EU is at a critical point. EU economic growth will likely be less than 2% this year. The Lisbon Agenda is not really moving ahead and, to make things worse, the EU member states are not showing any real consensus on how to overcome this situation. France's political elite is carrying its scepticism against globalisation into the European arena and Commission President José Manuel Barroso is obviously not capable of demonstrating sufficient political leadership to manage this crisis.

One of the Lisbon Agenda's key aims is to enhance Europe's information society by strengthening the information and communications technologies (ICT) sector in Europe. ICT are general-purpose technologies that improve business efficiency, generate faster product development, reduce costs and improve customer services and supplier relationships. According to recent statistics however, the gap between the US and the EU still remains, while emerging countries are quickly catching up.

While ICT account for 40% of Europe's productivity growth and for 25% of gross domestic product growth today, Europe still lags behind in total ICT expenditure, investing only &036;657 billion (EUR 547bn) as compared to &036;847bn (EUR 704bn) in the US. The difference in financing ICT research and development is most perturbing: &036;70bn (EUR 58.2bn) in the US and &036;28bn (EUR 23.2bn) in the EU in 2003. This is not enough to keep up with a fast developing global economy. Much more needs to be done to create a political landscape that will boost the European ICT and media sector. I would like to highlight a few key areas:

'Television without frontiers' directive>

Legal uncertainty may arise from the forthcoming review of the directive that once again tries to extend its scope into the space of internet services, today covered to a large degree by the e-commerce directive.

Radio spectrum policy

Making spectrum access more flexible is essential to ensure a secure and interference-free use of radio frequencies for old and new technologies; to achieve this, technology neutrality in 2.5-2.6 GHz bands should be realised at a European level.

Internet governance

The latest EU proposal concerning the future oversight and security of Internet Root Servers and the Domain Name System (DNS) calls for the creation of a new "model of international co-operation" and could radically change if not completely override the Internet Corporation for Assigned Names and Numbers (ICANN). Replacing or challenging ICANN will raise the question of who should govern the internet in the future. An answer to the question is less than clear at this point, since countries like China with more than questionable internet policies have already expressed interest in participating in a new international institution. This is not the right message to send to the UN World Summit on the Information Society in Tunis in November.

E-skills

While the Commission's i2010 communication highlights the importance of e-inclusion, more political emphasis should be put on strategies for improving e-skills employability. While the ICT industry has already set up its own training and certification programmes, partnerships between government and industry should be promoted to respond better to fast-changing technological developments. It is more than necessary to review and modernise the rules on audiovisual content and the regulatory framework for electronic communications. i2010 might be a step in the right direction but more dedication and investment in new high speed infrastructures and next generation networks is crucial.

German Socialist MEP Erika Mann is a member of the European Parliament's information society forum.

Europe must resist its interventionist policymaking instincts in the digital economy, says Malcolm Harbour

The rapid pace of change in the digital economy has already caught many policymakers flat-footed.

Digital products and services are becoming more accessible and more available to all of us, in whatever form we want to receive them, wherever we are.

Convergence is breaking down traditional business alignments. Within the last few weeks, a leading telecoms player (BT) has launched a "next generation" digital TV service, and a major satellite broadcaster (BSkyB) has bought an internet service provider. These are just two examples of a trend that will continue to accelerate.

Convergence will bring about significant reshaping of the information, content, broadcasting and communications sectors. As with any radical reshaping, there are going to be winners and losers. But consumers are clearly going to be the winners. They will have more choice, from many more new products and services, and will spend more of their disposable income in the information economy.

So should policymakers be worried about these trends and should they be tempted to intervene? From Europe's perspective, we should be worried if these changes were not happening. We have real strengths to exploit - in technology, communication, e-commerce and content production. But we should be concerned these capabilities are very unevenly spread and that many businesses are unaware of the impact of convergence. Raising awareness of the opportunities and developing matching skills, should be a top policy priority, particularly in the new member states.

In 2002 the EU had the foresight to adopt a new Communications Regulatory Framework that anticipated convergence. By having a single set of regulation, based on competition law principles, market dominance issues can be addressed as they arise without continual new regulations. The market should be allowed to evolve and we should only intervene when necessary.

In practice, the system lies in the hands of 25 independent regulators who are not yet operating in a uniform way. Getting member states' regulators to work consistently and well is by far the biggest regulatory challenge and one that must be overcome if Europe is to seize the convergence opportunity.

But alongside an open and competitive communications market, broadcasting rules will pose the next major challenge. Politicians are always keen to intervene, because they see a whole range of public interest concerns. There is always far more political interest in ruling the media, than in the technology they use.

The forthcoming update to the 'television without frontiers' directive will be the first test of EU regulators in dealing with a world where consumers will have extraordinary choice and be able to watch broadcasts from all over the world. Legislation will become increasingly ineffective. Regulators will need to apply non-legislative tools, such as voluntary programme certification, public interest programming guidelines, better consumer information and filtering technology that protects the young and the vulnerable.

We also have to develop an intellectual property regime that allows content producers appropriate rewards while giving consumers full enjoyment of the products they purchase, across all the devices they use in their house, car or on their person. Levies on computer disks - or even iPods - are entirely inappropriate in a converged EU market, even though some countries are still trying to defend them.

We will also need to look at the rules governing e-commerce, online payments, gambling and pharmaceutical distribution, to name just a few areas where convergence is having an impact.

It is clear that the convergent economy will grow quickly and unpredictably. Consumers will pick the winners and losers. In this environment, successful policymaking must be light, rapid, responsive and balanced. It must move out of its vertical 'silos' into open country, and get far more engagement across many different administrative arms. Doing it well should be a top EU priority.

• UK Conservative MEP Malcolm Harbour is a member of the European Parliament's committee on the internal market and consumer protection.

Two MEPs discuss ways of regulating the European ICT and media sector. This article is part of a European Voice Special Report, 'New Media'.