Today, across Europe, we can find widespread consensus on the need to invest in high speed networks. However, there are some vital elements missing from the discussion: characterization of the technologies that will allow for such deployment, and ways to achieve this.
According to the World Economic Forum, the Internet-based business activity will reach 4.2 trillion dollars in the G-20 countries by 2016.
The digital economy is growing faster (about 10% per year) compared to the economy as a whole, while in emerging markets it is growing at a rate of 12-25 % per year, with significant results in social and political terms, as well as economic impact.
The digital challenge is also central for the European Union countries to stimulate inclusive and sustainable economic growth.
The potential of the digital economy, the European single market, the Internet of things and the convergence between broadband and TV, can only be achieved if there is adequate digital infrastructure enabling speed in excess of 30 Mbps (Megabits per second).
Next generation access networks are a general-purpose technology with the potential to trigger productivity gains on a massive scale.
These gains might take years to accrue, because new applications and new organizational and production designs that use Next generation access networks need time to be developed.
Nevertheless, we consider wide Next generation access infrastructure roll-out to be welfare enhancing and that it should therefore be an objective of the European Union. This is consistent with the view taken by the European Commission.
The manner in which the transition to this next generation infrastructure is managed and encouraged will be crucial. Optical fiber is for sure a response to the need of durable, symmetric, reliable and easy to maintain technology.
Today, across Europe, we can find a widespread consensus on the need to invest in ‘reliable, trustworthy, high speed and affordable networks and services’: the Digital Single Market Strategy and Juncker Plan are a powerful illustration of this consensus.
However, there are some vital elements missing from the discussion: characterization of the technologies that will allow for such deployment, and ways to achieve this – all the more important at this point of time as the EU is building tomorrow’s infrastructure.
More than one year after the Junker Plan entered into force, the projects on digital infrastructure are below the expectations. To promote investments the EC shall drive the innovation through a clear framework and better coordinating member states’ initiatives.
Fibre has a number of benefits which other solutions cannot match. Apart from speed, we need to take the quality and durability of the network components and homogeneity of the network into account.
Here, fibre outperforms everything else. The network should remain in place for decades and support several consecutive generations of active equipment and services.
Fibre is the most future-proof option and progress in technologies such as bend-immunity and data compression can increase its active life even further.
According to the Digital Agenda of the EU Commission, Europe needs competitively priced fast and ultra fast Internet access for all.
In this regard, the EU is to establish next generation access networks. The Commission intends to use European funds in order to finance investment in broadband but at the same time shall encourage and coordinate MS ‘efforts and private initiatives.
If Europe wants to benefit of all the advantages offered by the digital revolution, a reliable, trustworthy, high speed and affordable network is at the basis of the digital single market.
Picture credits: Abby
With its Statement of Objections against Google on Android, the European Commission is rightly exercising its role as guardian of fair competition. Now it’s time for Member states to put in place a coordinated effort at EU level on the taxation of big tech companies.
“The European Union has the duty to ensure freedom of competition”, only by doing this we can “ensure the innovation that is necessary to the growth of our economy”.
These words from EU Commissioner for Competition Margrethe Vestager lay out a basic principle that the Union has a responsibility to protect.
Fair competition and consumer protection translate into lower prices and greater choice for all EU citizens. In addition, they provide the basis for the creation of a single digital market in which European entrepreneurship can prosper.
To give just two examples: the cost of phone calls in Europe has been reduced considerably compared to ten years ago; and families and business are now able to freely choose their electricity and gas supplier.
On April 20, the EU published a Statement of Objections against Google in which it claimed that its “Internet search”, mobile operating system (Android) and app store management practices were contrary to European competition law.
Commissioner Vestager accused the US giant of promoting its products at the expense of its competitors, forcing smartphone producers willing to install the Android operating system to also install Google’s apps.
This despite the US company’s claim that “Android is an open-source operating system based on open innovation”.
In the past, the Union has been a strong guardian of fair competition, as in the two cases involving Microsoft (condemned for the lack of free choice related to its web browser and abuse of dominant position) and Intel (sanctioned in 2014 due to its market monopoly in a model of popular processors).
Given Google’s dominant position, it will be necessary to identify structural remedies, as happened in the past with telecom companies, Microsoft, and other players in similar conditions. We enjoy the results of these remedies every day, with these markets now fully competitive.
The EU must ensure pluralism in the market so that it can establish a fair level of competition. Only if the rules are the same for everyone will it be possible to give birth to large technology companies.
The new technologies field is particularly complex and delicate: its huge opportunities must be accompanied by major investments in research and technology.
Google covers approximately 90% of the smartphone operating system’s market thanks to Android.
Consequently, it can also dominate the app and online search markets (the two are crucial for advertising sales) as well as the market for videos thanks to Youtube.
This massive presence means the Mountain View-based company holds the largest share of the online advertising market.
Thinking about the incredible numbers that all this produces, we must also address the issue of the relation between large hi-tech companies and European tax agencies.
We are awaiting a European tax regulation: in the meantime, individual States are moving in a random order.
Google will pay the British treasury a £130 million bill in back taxes, a value that many analysts consider to be too low bearing in mind the amount owed since 2005. France has chosen a different path, seeking as much as €1.6 billion from Google in unpaid taxes.
What about Italy? Amidst disputes between tax authorities and the judiciary, as well as agreements rejected by the company, the government’s position remains unclear.