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The Role of the UE for the Promotion and Regulation of the Field of Information
1 Europe's entry into the digital world
The mega-trends of the new information world are globalisation, digitalization and convergence of sectors. The bridge between our traditional telecoms and media sectors and our future digital media is the Internet.
The key issue for us is to ensure that Europe can most rapidly and effectively adapt - not only to breakthrough into this new digital world, but to become an integral part and major player
The overall framework for this is set by the EU's Information Society Action Plan.
The Bangemann report and the subsequent Action Plan for the Information Society has resulted in four major policy directions :
t the report and the Action Plan have given a central role to the liberalisation and deregulation of the core sectors because the report clearly supports an information society driven by private sector initiative, working in partnership with the public sector,
t they have accelerated the development of a broad legal framework at EU level, reaching from issues such as data protection and privacy to intellectual property rights,
t they have led to the approval of a number of programmes in the field of the new on-line and media technologies, many of which are public/private sector partnerships,
t and they have emphasized the social component of the transformation and established fora for dialogue at the EU level
2 The Countdown 1998
Lifting restrictions on competition in telecoms services and infrastructure is the core operation underpinning Europe's receptiveness to the new developments. The telecom backbone and local structures must be opened up, relaxed and made more flexible to allow the flood of innovation, services and networks to flow in and through.
The deregulation of the core telecommunications market, the increasing dynamics created by the privatisation of the former monopolies which goes with deregulation in Europe, and the rapid development of new segments such as mobile communications is spurring substantial activity in the core sectors of the information market across the EU, as it does here in Italy. At the same time , the diversification of television and broadcasting, the expansion of private broadcasters and the transformation of public broadcasting entities , and the entry of new actors from the publishing and software industries into the market lead to a dramatic acceleration of developments as we have witnessed over recent months. But the small number of powerful actors holding bottleneck positions allowing them to control market developments, and the rush by market actors to occupy the major growth positions, also generate the risk of anti-competitive behaviour at national, European and global level. This could close the gates again before they have even been fully opened. The challenge for national and EU regulators and competition authorities alike will be to see that the current restructuring process will lead to pro-competitive and growth oriented market structures.
Alongside liberalisation and the opening up to market forces, we need to encourage public programmes, promoting educational, social, and cultural projects and content production.
The EU has created the framework for social and cultural dialogue and has announced two weeks ago a comprehensive approach for the Information Society in the field of education. The Bangemann challenge is setting new frontiers for cooperation within the EU, and with its partners outside, in particular Central and Eastern Europe and the developing countries.
3 The Future
The distribution networks for the information products of the future will rely on combinations : of wired/wireless, terrestrial/celestial, telecom/cable, cable/satellite.
This means that integration, interoperability and hybrid solutions will be key characteristics of the future
We have seen gigantic partnerships, agreements and mergers spring up over the last months in both Europe and the US, and this trend will continue : on the one hand between alternative or complementary networks, on the other between the content producers and packagers of information and the carriage networks.
Again, we need to balance positive synergies of integration and partnerships against risks of entry barriers and foreclosure of markets. We must ensure the broadest possible platform of choice for users and suppliers, without unduly discouraging investment and development in such yet untested markets. In our approach to the new telecoms and media alliances, we have tried to maintain that balance.
The treatment of the new audiovisual services as distinct from traditional broadcasting will have to be worked out and the discussion is under way at the EU and the national level. With the advent of digital television and the new potential it promises for a renewal of traditional broadcasting and of pay-TV services, Member States are reviewing their regulatory framework and major legislative proposals have been made. Market actors are shaping alliances which rewrite the basic pattern of broadcasting in Europe. In the telecom, cable and pay-TV fields, we observe the encounter of the telecoms and media giants.
Where is the place of the Internet in this context. For the moment Internet services do not fit properly in any of the traditional categories. Most importantly they are currently neither "voice telephony" nor "audiovisual services". Thus any regulatory restrictions as regards voice telephony, on the one hand, or content on the other, need caution. Currently, some 10 % of the 40 million Internet users are Europeans, more than 70 % are American. Europe needs not less Internet but more. At the moment, only 1 out of 100 Europeans has access to the Internet.
One cannot of course ignore concerns over pornography and securing of parental control on the Internet. The Commission will in fact publish very soon a communication on the subject.
Inter-netting future structures
The internet could however develop into the link between current networks and the digital delivery systems of the future. To do so it needs to overcome current structural limitations and manage a breakthrough of an order of magnitude in speed and capabilities to reach true interactive video delivery capability - in stead of current download times of 1 hour for 1 minute of full motion video, or for 10 minutes of high quality sound.
The future delivery systems of the Information Society may be combinations of broadband cable and Internet-type telecom backbones and integrate satellite and mobile systems. Customer terminals could become some sort of hybrid / or choice between an increasingly encumbered television and an increasingly unencumbered PC. The distinction between interactive digital TV services and internet audiovisual services may be increasingly blurred. PC based services may compete with TV based services. They may integrate and merge. Or one may effectively "wipe out" the other.
4. Keeping the "Gates" open
Only market forces will be able to work out the right balance between the different avenues into the digital future. This is what makes the Countdown to full liberalisation of telecommunications on 1 January 1998 so central. It also explains why the Commission has so strongly insisted, with regard to this country as to the other Member States, that the commitments taken are actually followed. We now have the bulk of EU legislation for full telecom liberalisation passed at EU level and the national legislation in place in two thirds of the EU market.
We are looking forward to the rapid enactment of the legislative implementation of liberalisation in Italy. The Government has indicated that it is firmly committed and major progress has been made over the last two months.
Liberalisation and the enactment of the corresponding legislation and regulation is the necessary counterpart to privatisation. But more fundamentally it is an indispensable condition for the flexibility needed to allow the evolution of the multi-component and multi-actor systems of the future.
The other issue is the control of the gates between the components of the future systems.
In the media context, access to content is the major issue, as the recent rush for controlling rights for transmitting sport events has shown again. With the emergence of pay-TV and multi-media, conditional access systems and set top boxes are now also moving to the top of the agenda. Meanwhile, in the telecommunications field, access and interconnection to facilities and services of (single or jointly) dominant network operators are becoming a major issue as the recent discussions between Telecom Italia and Omnitel have highlighted.
The central problem is that given the evolving market structure, the converging sectors depend upon ensuring access to bottleneck facilities. These are essential for reaching customers and cannot, in many instances, be replicated in a reasonable manner by other means.
Of course,we recognise that enterprises must be allowed to adjust to the changing market structures, as they evolve out of demonopolisation and convergence. At the same time we must avoid the type of foreclosure which would slow down market development. The Commission has shown that it seeks to achieve the balance between risks and benefits in its application of EU competition rules. In the MediaService GmbH case in Germany it has established the threshold at which point the concentration of market power in the whole value chain - content, distribution, cable becomes unacceptable. But it has also shown in a number of recent telecom and media cases, that it favours restructuring where this corresponds to a sound adjustment to face the future global telecoms and media challenge.
As regards current developments we are watching with particular attention two types of developments and attempts by market actors to gain control :
t For digital TV based services the focus is on the set top box or decoder ;
t For Internet services the focus is on the browser, the server, and the access provider.
We will follow with care any development which links up these critical elements of the future information infrastructure with other dominant market positions.
The speed of the transformation which we are living has outrun and outdated traditional regulatory structures. This is testified by the new legislation now on the agenda at both EU and national level. The Countdown 1998 and the Information Society Action Plan have worked as unifying concepts which have spread across Member States.
While liberalisation of the core sector of the future Information Society is now fully embraced in the European Union, all Member States want to see a number of values expressly safeguarded by public regulation : universal service and media pluralism are the most prominent goals. A separation into information haves and have nots must be avoided. This is the background of current regulatory reform in the EU. General public interest regulation, once reformed, and competition law will work side by side : the relationship must be defined both legally and institution-wise.
We are assisting a fundamental transformation of our economies
led by the core sectors of the information society. This is
part of a global transformation. It is not by chance, that the
same year has seen the adoption of the new US telecom bill, the
adoption of the EU's Full Competition Directive for the telecommunications
sector, the Japanese NTT review, and progress, in spite of setbacks
, at the WTO Geneva negotiations on the worldwide liberalisation
in basic telecom services. The objective of the EU is to make
Europe fit to participate in this global change. 14 months before
the date of 1. January 1998 I believe one can say with confidence
that Europe is on its way into the new information age.
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