Commissioner Kroes’ Digital Quest Just Beginning

Michael Hedges June 2, 2010 - Follow on Twitter

Europe lags the United States and Asia in innovation. And it’s a bad thing, say politicians. It’s good to look for a solution.

European Union telecoms ministers gave a ringing endorsement to the omnibus “Digital Agenda for Europe” outlined by European Commissioner for the Digital Agenda Neelie Kroes. Meeting in Brussels (May 31) the Council of Ministers cheered and applauded, mostly, the least contentious aspects of a general policy on the single market in the digital age. What remains are the same old problems that have plagued European competitiveness.

It’s true. Europeans have not developed a Facebook, a Twitter, MySpace, YouTube or much of anything that stands out in the new media world. Google’s percentage of search traffic in Europe is higher than it is in the United States despite one bold initiative after another. Remember Quaero?

“Forty percent of growth in productivity in Europe results from the information and communication technologies sector,” observed Spain’s Telecom Minister Miguel Sebastian Gascon. “It is important to abolish barriers to the digital single market.”

“We are lagging in creation and innovation and need to provide stimulation,” declared Commissioner Kroes, giving as an example the failure of a European market for online music. “This does not work to the advantage of European companies, which often consider it too difficult to launch European services.”

The Digital Agenda for Europe is considered a top EC priority, meant to “accelerate deployment of the internal market while strengthening legal certainty and encouraging investments, competition and innovation on the high-speed market, in particular during the transition to new networks.” Hard goals include ultra-high speed fiber networks. Softer goals include copyright reform.

More often than not, innovation is slapped down. One of the best recent examples of the European attitude toward innovation is the saga of Swedish online music file sharing site Pirate Bay.  Its founders, in the style of all innovators, pushed the limits of legality and challenged convention. For their effort they were sent to jail. Policy makers and, of course, the music industry cheered.

“Today, start-ups leave for the United States primarily because they want to take on a big market right away and the European market is extremely fragmented,” explained French Minister of State for the development of the digital economy Nathalie Kosciusko-Morizet. A unified, single market would, in the long held view of European economic policy, offer scale sufficient to keep investment flowing.

Institutionally, Europe adores bigness, from big banks to big telecoms and every other big, unless it’s big outsiders. To be less than big is to be inconsequential, feared or just in the way. A Digital Agenda for Europe has been in progress for at least five years. It’s always been stalled by national governments heeding the pleas from big, incumbent telecoms in mortal fear of competition from more agile operators.

Evidence of creative and competitive agility abounds in Europe’s media sector. Commissioner Kroes need only look to her home country, the Netherlands. Barely fifteen years ago a couple of Dutch TV production guys put together a start up called Endemol. The rest is history. 

The immediate beneficiary of the Council of Minister’s endorsement is Latvia’s capital, Riga, which will soon be home to the Body of European Regulators for Electronic Communications (BEREC). Commissioner Kroes’ colleague, Info Society and Media Commissioner Viviane Reding, proposed and lobbied for a single, pan-European telecom regulator to leap over national intransigence. It was not to happen. BEREC was de-fanged and will only advise the Commission and national regulators. But there will be nice, new jobs in Riga.

Pushing the Digital Agenda for Europe, limited though it is, will require a concerted effort matched with diplomatic skill. Commissioner Reding succeeded in bringing the Television Without Frontiers Directive into the 21st century. That took ten years.

Rumors persist – officially denied – that Commissioner Kroes is a short-timer with the European Commission. Extremely popular in her native Netherlands by virtue, some suggest, of anti-trust prosecutions of American tech giant Microsoft as EC Competition Commissioner, next week’s general election might bring about a job change: Dutch Prime Minister. 

“There’s no need for me to come back to the Netherlands,” said Commissioner Kroes, almost answering the question. “There is a lot of work to do.”