11 January 2023

On 11 January, EIF organised a debate hosted by MEP Adriana Maldonado on the EU’s Digital Decade connectivity targets with a focus on the so-called ‘fair contribution’ debate. The MEP was joined by the following guest speakers:

Carlota Reyners Fontana, Head of Unit 'Electronic Communications Policy', DG CONNECT, European Commission
Juan Montero Rodil, Chief Public Policy, Competition and Regulatory Officer, Telefónica S.A.
Julia Maxwell, speaking on behalf of the VOD Coalition; Vice-President of Regulatory, Public Affairs and Corporate Compliance at Viaplay Group

39:35
The EU’s Digital Decade connectivity targets and the ‘fair contribution’ debate

MEP Adriana Maldonado in her opening remarks mentioned how important these events are for the European Parliament to help cover different issues in a fast-paced world. The EU is taking the lead in relevant technological issues, and the European Commission, companies, associations, NGOs and legislative institutions need to cover a clear and technical debate. Considering the current challenges and the changes in a post-pandemic world, she underlined that e-commerce has increased more than 65%. As the differences between urban and rural areas in Europe need to be addressed, she declared that it is important to grant the same infrastructure and secure connectivity to all European citizens. The MEP acknowledged the importance of the consumer and user perspectives, emphasizing that the current infrastructure is important, although the way citizens connect and communicate has changed a lot in the last decade. She concluded by stating that it is impossible to manage the current situation with the same rules that have been applied to the past.

The European Commission representative, Carlota Reyners Fontana, opened her speech by declaring that connectivity markets are facing technological and market changes that may impact the business models of providers and may also lead to the optimisation of the value chain. According to her, data is growing exponentially, while returns and appetite to invest in the telecom sector are decreasing, particularly for mobile networks. She also affirmed that the online services segment generates over half of the total versus 14% for access connectivity and that the topic of ‘fair share’ has been associated with the need for more sustainable, greener, and energy-efficient networks. On the one hand, Ms. Reyners Fontana mentioned that telcos have been calling for rules to make all market players contribute to the digital transformation in a proportionate and fair manner. She said that, on the other hand, content providers argue that there is no issue to be solved with a fair contribution that might affect the digitalisation of the economy. It is a key moment to look at the electronic communications sector and consider where it stands and where it should be in the future, taking into account all the ongoing developments.

Juan Montero, representing Telefónica, discussed the future of digital society for European citizens and companies. He pointed out that there is a new era of the internet, referred to as Web 3, and that European companies need to be competitive in the global framework and especially in the internet value chains. According to him, this goal has to do with the 2030 Digital Compass set by the European Commission. Telefónica is committed to delivering the objectives of the 2030 Digital Compass, particularly: gigabit connectivity in every household in the European Union; 5G standalone connectivity everywhere in Europe; at least 10,000 computing nodes in the EU. He stressed that not achieving these targets could lead to the European Union becoming an underdeveloped region in terms of digitalisation and digital society. Additionally, he declared that, in the last decade there was no price paid for the traffic increasing, while very few companies gather more than 50% of the traffic in the European network.

Julia Maxwell, representing the European VOD Coalition, stated that the proposals for a network-usage fee are not new, have been discarded in the past, and there is no concrete evidence yet to support the idea that the internet ecosystem is unsustainable. According to her, VOD coalition members have implemented alternative means to provide the best quality to customers whilst ensuring the lowest possible energy expenditure. The coalition is also concerned that the proposed network usage fees would risk creating barriers to entry and growth not only to big tech companies, but also to smaller European streaming companies, as well as the European creative sector. Ms. Maxwell mentioned that VOD Coalition members already have mutually beneficial arrangements with telcos offering internet service provision, which allows them to expand their streaming services and reach consumers across Europe. She then noted that coalition members and telcos do not compete with each other, but have a vested interest in each other's success.

 

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