• Digital Single Market

    Catherine Bearder: Why tax deals harm our digital economy (and its businesses)

    If governments resort to brokering individual tax deals, such as the recent UK's tax deal with Google, we end up with a race to the bottom that ultimately would be damaging our digital economy, says Lib-Dem MEP Catherine Bearder. Brexit? Complete econom [read more]
    byThe Digital Post | 02/May/20163 min read
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    If governments resort to brokering individual tax deals, such as the recent UK’s tax deal with Google, we end up with a race to the bottom that ultimately would be damaging our digital economy, says Lib-Dem MEP Catherine Bearder. Brexit? Complete economic lunacy.

    What is the added value to the Digital Single Market that the UK might bring if it stays in the EU?

    CBThere are huge opportunities around the corner to be unleashed through the creation of the EU’s digital single market.

    The UK is a world leader in e-commerce, so making it easier for businesses to sell goods and services online across the single market will bring massive benefits to our economy and to British consumers. Leaving the EU now just as we are on the cusp of this digital revolution in Europe would be complete economic lunacy.

     

    What is your opinion about the recent UK’s tax deal with Google?

    The UK Chancellor could and should have got a better deal for the UK taxpayer. It is not acceptable that there is one rule for large multinational companies and another for the small businesses paying their taxes and struggling to get by.

    Companies like Google make an important contribution to jobs and the economy, but that doesn’t mean they should be able to get away with failing to pay their fair share in tax.

    Broadly speaking, what sort of measures should the EU undertake to ensure that multinationals such as Google pay a fair share of tax in each country in which they operate?

    The recent EU agreement to introduce greater transparency over tax deals is an important step forward. But what the history of tax deals in Europe shows us that we need a more coordinated approach to ensure accompanies pay their fair share.

    If governments resort to brokering individual tax deals, we end up with a race to the bottom. The most important underlying principle should be that tax is paid where the actual economic activity takes place.

    This can be a real challenge in the digital sector, but it is one we must overcome if we are to create a level-playing field and a thriving and fair economy.

     
    Picture credits: James Petts
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  • Telecoms

    What rules for Europe’s digital highways?

    We should not allow Europe to go backwards, the rules which gave highly performing results on copper, which allowed for outstanding innovation such as the creation of the triple-play offer should be equally enforced in the new fibre world. Telecoms. Infr [read more]
    byErzsebet Fitori | 23/Sep/20156 min read
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    We should not allow Europe to go backwards, the rules which gave highly performing results on copper, which allowed for outstanding innovation such as the creation of the triple-play offer should be equally enforced in the new fibre world.

    Telecoms. Infrastructure. Fibre, FTTC, FTTH. 4G, 5G. Backhaul. They sound very boring, don’t they?

    And yet, how we deal with these words today determines our future. Why? Internet connections via telecoms networks are some of the most important pieces of the puzzle of a high-speed connected world. E-services, connected cars, smart cities, Industry 4.0, unlimited speeds, innovation – our world going online – depend on high quality and high speed infrastructure.

    Just like needing high quality chocolate to bake an irresistible chocolate cake – and for someone living in Belgium I know that choosing high quality chocolate can also be affordable – we need high speed networks to deliver high speed Internet connections at an affordable price to everyone in Europe.

    If we want to tap into the digital revolution, we have to deal with its essential enablers, the networks, wired and wireless

     

    Shaping the right foundations for a world of possibilities

    Building the telecom infrastructure does not happen in the blink of an eye, to the contrary, we are talking about long term investments, at least for 20 years.

    So let me give you several reasons why it is relevant to talk about this today: many people use more and more video streaming, public services are now increasingly based on digital tools. According to the OECD Digital Outlook 2015, though the share remains dispersed across countries, 64% of individuals in the OECD area relied on e-government services in 2013. Smart living is also essential to improve energy consumption or transport systems, people located in remote areas can now benefit from online training or education (1).

    Some usage such as telemedicine can also dramatically change the future, provided the network connection is of the adequate quality. The same report from the OECD quotes estimates, which indicate that by 2017, mHealth applications could potentially save €99 billion in health care costs in the European Union.

     

    And tomorrow what will be the new possibilities?

    What we can take for granted is that the need for additional bandwidth will go increasingly and this is the challenge we are facing today. How to build the networks which will answer the needs of this new digitalised society?

    The European Commission is now about to review the rules for these electronic communications services. This is the time when everybody should express their opinions about what they want for the future and how they could contribute to it.

    I hear you say: “Here we are! Another telecoms lobbyist asking policy makers to allow them to make more profit.”

    Well… That’s partly true but the interesting part is that it is possible to have a win-win solution for all. It is very well possible for end users to get affordable, high speed and innovative services and for the telecoms industry to have fair returns.

    Equally it is possible to have affordable prices and good value money for end-users whilst having network investments in high capacity next generation networks. It is vibrant competition that delivers a win-win solution for end-users and the telecoms sector alike. And vibrant competition in telecoms crucially depends on effective regulation.

    The role of the regulatory framework for electronic communication services is to encourage competition and guarantee basic user rights in order for European consumers and businesses to obtain quality services at affordable prices.

     

    Rebuilding the virtuous circle of competition

    Regulation should thus re-focus on competition as the triggering part of a virtuous circle: it pushes companies to be more innovative and efficient and offer services at competitive prices, which generates user demand. Demand in turn drives more investment.

    However, the most best way to stimulate competition is through access regulation, meaning the ability of challenger operators to pay for access to the infrastructure of another operator that cannot be duplicated in order to offer services.

     

    More players simply invest more… if enduring bottlenecks are tackled!

    Alternative operators are investing significantly in networks and effective access regulation is the key enabler of their network investments. .

    And the good news is – as a recent study by Analysys Mason shows – that pro-competitive regulation is a win-win for end-users and the telecoms industry. Vibrant broadband competition has led to lower, affordable prices for end-users and at the same time to higher revenues for the telecoms industry as a whole.

    The revenues of the telecoms sector grew despite falling prices because affordability led to much higher broadband take-up by end-users. So there is no trade-off between competition and investments, nor between investments and affordable prices.

    Obviously, for fixed infrastructures, it is sometimes not economically feasible to roll-out 3 or 4 parallel networks. The difference between choice and affordable prices for the end-users and no choice and high prices will depend on the degree of competition in the market, the possibility for all operators to invest and have access to the non-replicable parts of the networks. The last mile of the network is an enduring bottleneck and needs to be regulated.

    The challenge for the review of the framework can be described as such: whilst there are lots of concerns voiced on the raise of new monopolies such as big US companies, the old monopolies are very much on the rise: according to the European Commission’s digital scoreboard 2015, incumbent operators have a 69% market share in VDSL which is currently the leading NGA technology in Europe.

     

    Rules in a fibre world

    We should not allow Europe to go backwards, the rules which gave highly performing results on copper, which allowed for outstanding innovation such as the creation of the triple-play offer should be equally enforced in the new fibre world.

    That is also valid for rural areas where public money will be necessary to complement private investments: when there is no business case to build parallel infrastructures, every operator should have access to the monopolistic infrastructure as injecting competition is essential for affordability and innovation. There’s clearly no point in building a network if prices are so high that people can’t afford the services.

    ECTA has just released a study by Analysys Mason on the rules to build our future digital highways with the aim to provide policy-makers with food for thought on what is, in our view, the best way to create a fully connected European society and economy.

    Whether or not we decide to follow the path towards a vibrant competitive broadband market will make a huge difference from an end-user’s perspective and as a consequence on driving the necessary investments matching these ambitions.

     

    (1) The OECD Digital Outlook 2015 indicates that open online courses are becoming more popular with 7.8% of Internet users in the EU who followed an online course compared with 4.7% in 2007.
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  • Innovation

    Four recommendations for an open and fair smart city

    The big question is this: do administrators and politicians understand what the consequences of the “smartness” they are injecting into public infrastructures? Recommendation 1: Focus on peer-to-peer technology. In its infancy, the Internet's desi [read more]
    byMarleen Stikker | 23/Mar/201515 min read
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    The big question is this: do administrators and politicians understand what the consequences of the “smartness” they are injecting into public infrastructures?

    Recommendation 1: Focus on peer-to-peer technology.

    In its infancy, the Internet’s designers opted for an architecture of distributed communication. This means that, within the network, each node is equal to any other node without the intervention of a central source. Such networks are often called “peer-to-peer” (P2P)—equal to equal. Within these networks, everyone has access to the same tools without having to ask for permission.

    This distributed, horizontal architecture of the Internet has been the determining factor for its disruptive nature. It undermines traditional hierarchies, and provides opportunities for newcomers to upset antiquated business models in no time.

    This leads to an on-going struggle between old and new powers. To keep the Internet open to new entrants and provide everyone the same opportunities, net neutrality remains crucial. Unfortunately, net neutrality often comes under pressure politically, and must be defended from those with ulterior motives.

    The “open” Internet has also been the basis for the explosion of digital social innovation in our modern society. Its structure offers people opportunities to create things of real value through self-organization, sharing, and the production of knowledge and goods.

    Not as isolated individuals, but as networked innovators in contact with peers around the world. Through international cooperation, digital tools have become sophisticated enough to create sustainable and scalable economic models. P2P Foundation keeps track of all these developments on their blog, which I highly recommend.

    The term “sharing economy” often crops up when discussing these new models. But, beware, it is a treacherous term. “Sharing economy” is often used to describe the business model of companies like Facebook, Google, Airbnb, and Uber.

    These companies subscribe to values that are fundamentally different from a “sharing economy”— values that make the term “capitalism platform” seem more appropriate. In the hands of companies like these, Internet users’ data is centrally stored and exploited.

    To assess whether a new service is truly social and reciprocal in nature, you first must analyze its business model. Who is the owner? Is the technology open or closed? What is their policy on data? Is production process a fair one?

    For sustainable economic transformation, it is better to avoid companies driven by shareholder-value, and back organizations driven by social values. That means that procurement processes should favor open and fair technologies and in this way you can maximize the power of social entrepreneurs, citizens, and p2p initiatives.

    Care should always be taken when making policy, and in the development of innovative tools that not only large companies and research institutions are allowed to sit at the table. Small and medium sized companies should be actively involved in these processes.

    In addition to economic development, digital social innovation has the potential to enhance technological literacy. A good example of this potential is The Smart Citizen Kit project.

    The project allows people to measure environmental variables (e.g. air quality, noise levels, etc.) themselves, and to share the information they’ve gathered with others. This produces data (and visualizations of that data) that policymakers and scientists might find interesting.

    More than that, participation in this project helps to increase awareness and understanding of measurement. By being involved in the generation of data, and by using open source hardware and software, people begin to understand that measurement is not an objective process. Such an insight is of great importance in an era where salvation is expected to appear in the form of big data.

    To give meaning to data, we need algorithms to analyze it. And, the results of these analyses often provide arguments for policy.

    But, what are algorithms? Who designs these models? And what is their worldview? Instead of simply focusing on opening up data, we must also focus on opening the computer models and algorithms used to analyze the data that informs the policies upholding our democracy.

     

    Recommendation 2: Be open. Be fair.

    The credo of the “Maker Movement” is: “If you can not open it, you do not own it” (Maker’s Bill of Rights). Yet, while products are becoming smarter, we seem to be getting dumber.

    We can barely open up our smart devices without the risk of destroying them. The concept of “self repair” no longer exists. Take the car, for example. Until recently, a car was something you could repair yourself. All right, maybe not yourself, but surely the neighbor or the garage around the corner could take care of it for you.

    These days, cars house mobile computers that rarely disclose their secrets.

    Starting in 2016, all cars in Europe will be equipped with a black box, called an “e-call,” which will be able to independently contact emergency services. Europe has decided that the car is no longer private property by including a component that you can neither open nor remove, and that constantly keeps watch over you.

    Unfortunately, this applies to many smart city solutions: you can not open them. Before governments make such technologies law in our society, they must be the subject of civil debate.

    New technologies should abide by the values you uphold as a society. Providers should be assessed on questions like: Is the technology based on open hardware, open source, and open data? Is the idea of “Privacy by Design” taken into account? Do they make use of a distributed peer-to-peer model? And, last but not least: Is the production process fair and sustainable?

    It should be a fundamental principle that a government only invests in open technology. Currently, when municipalities have to choose between two administrative systems, there is no semblance of an open market.

    There are usually only two players in the game. You either choose this one, or the other; and—whatever you choose—you’re stuck with it for decades to come. We’d be much better off using systems based on open technology.

    Additionally, we must ensure that publicly purchased technologies are fair technologies. We must realize the suffering that often hides behind many gadgets and technologies.

    Think about the exploitation of children in the mines of the Congo, or the miserable working conditions in China. Not to mention the toll manufacturing process takes on the environment, and the gigantic mountain of e-waste it generates. It is our task to strive for fair technology and build on an economy that puts human rights in the center.

     

    Recommendation 3: Work within the Quadruple Helix model with the citizen as a full partner.

    In one of its reports, the OECD called for better cooperation between government, industry, and academia by bringing all three together in a so-called “Triple Helix.” Since then, all economic advisory bodies are based on the interactions of these three entities.

    The main problem with this model is that society gets completely pushed aside. Here and there, one hears murmurs of the “Quadruple Helix”: the idea that citizens should be central to these decisions.

    Yet, idle thoughts and whispers rarely result in substantial change. Social actors belong at the table, and should be involved in policy and decision making processes.

    Another problem with this model is that innovation does not necessarily originate in large companies and universities. Digital social innovation also comes from the broad, inventive ecosystem of creators, hackers, and social entrepreneurs. In the search for disruptive solutions, we need innovative strategies based on those outside the “Triple Helix”.

     

    Recommendation 4: I’m smart, too.

    Not a day goes by without some sort of Smart City initiative cropping up. The Smart City movement is convinced that technology is the answer to big city problems. But technology is not neutral, and must always be questioned.

    Without technological literacy, we can only consume, and never produce. Only read, never write. If systems are smart, but we remain “stupid,” can we really say that we’ve progressed?

    The major goal of our time is to become smarter and more tech-savvy. This is true not only for the youth, but also for those who currently hold the controls: the people responsible for making policies.

    Smart City technologies introduce a huge dependence on suppliers, and IT departments within the public sector often struggle with the vendor lock-in that can accompany administrative systems. Only the suppliers can read and update their proprietary software.

    So, who will hold the key to the smart city? Administrators, politicians, IT departments? Or the shareholders of companies? The companies that would just as soon sell their SmartCity software to North Korea as they would sell it to the Netherlands?

    The big question is this: do administrators and politicians understand what the consequences of the “smartness” they are injecting into public infrastructures? Take the great promise of “smart lighting,” a showpiece for the energy saving, sustainability agenda. With smart lighting, the light only turns on when someone walks past a sensor. For some people, this provides a sense of security.

    Others find it a sinister thought that someone with bad intentions could be waiting for them in the darkness. Depending on the context, light can mean the difference between life or death.

    At the border between Mexico and America, for instance, simply walking with a flashlight can mean being shot on sight. Smart lighting might save energy, but it introduces a social dilemma. Will we sacrifice safety for the sake of efficiency?

    Let us ask ourselves these questions before we inject technology into the bloodstream of the city, and consider carefully the models and algorithms that will affect our reality.

    Let’s make sure that those who are making decisions about the future of our cities have a real understanding of what technology means. Learn what code is, and the standards and values inherent to it. Only then can you make the right choices.

     

    photo credits: 
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