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EU Commission's draft Digital Single Market strategy leaked

30/04/2015
EU Commission's draft Digital Single Market strategy leakedThe EU Commission is due to release its Digital Single Market Strategy and supporting Evidence on 6 May 2015, but copies of the draft EU Commission's draft Digital Single Market strategy leaked

The EU Commission is due to release its Digital Single Market Strategy and supporting Evidence on 6 May 2015, but copies of the draft Strategy were leaked last week, which have provided an unexpected insight into the direction that Single Market will take.

The Strategy seeks to ensure that the Digital Single Market is truly "single", so that the Single Market is realistically reflected in the digital world. The Strategy claims that bringing down the remaining barriers to a single market could contribute an additional €340bn to the European GDP.

The stated aims of the EU Commission are to create "a Digital Single Market as an area where the free movement of goods, persons, services and capital is ensured and where citizens and businesses can seamlessly access and exercise online activities under conditions of fair competition" helping to "restore Europe as a world leader in information and communications technology, with all the tools and skills required to succeed in the global digital economy."

The Strategy identifies the principal remaining barriers to a Digital Single Market as being disparities between Member States' contract law regimes, absence of affordable and high quality cross-border parcel delivery services within Europe and, finally, what the Commission perceives to be unfair discrimination against consumers when accessing content or buying goods and services online due to their nationality, residence or geographical location, within the borders of the EU.

Legislative Proposals

The draft document announces legislative proposals to address "unjustified geo-blocking … practices that result in the denial or limitation of access to websites or products and services in other Member States"; copyright reform, by allowing text and data mining and improving measures for civil enforcement; and the role of intermediaries.

Timeline for implementation

The Annex to the Strategy sets out the proposed timeframe for accomplishing the steps leading toward legislative change. Proposals for copyright reform and cross-border access will be tabled in 2015, and detailed analysis of the role of online platforms in the market and initiation of steps to tackle illegal content on the internet will take place in 2016.

 

DCMS Digital Communications Infrastructure Strategy

The leaked DSM Strategy will be particularly interesting in light of the Digital Communications Infrastructure Strategy published by the Department for Culture, Media & Sport (DCMS) last month.

Further to the Terms of Reference of the Digital Communications Infrastructure Strategy, published on 6 February 2014, DCMS published on 18 March 2015 a Policy Paper outlining its long term digital communications infrastructure strategy.

This Policy Paper details the government's commitments to assist market investment and to cut legislative and regulatory red tape.

DCMS comments that the government's "headline ambition" is that ultrafast broadband of at least 100 megabits per second should be available to nearly all UK premises, ensuring that "rural communities are not left behind".

Background to the Policy Paper

DCMS comments that superfast broadband coverage will be available at 95% of premises in the UK by 2017, with mobile operators achieving 98% 4G coverage, continuing policy set in motion in 2013 by the government funding of the 2.6GHz and 800MHz spectrum auction. With increased availability of the 4G spectrum, DCMS comments that improved broadband connectivity will bring service for rural communities into line with that available in urban areas.

The government proposes to future-proof the coverage, capacity and quality of the 4G network, and DCMS has been tasked with delivery of this proposal. In the 2015 Budget George Osborne announced government allocation of up to £600m to support the change of use of the 700MHz spectrum, improving mobile broadband connectivity. The funds will support the infrastructure costs of clearing the spectrum frequency, any necessary support to consumers, and retuning broadcast transmitters to enable broadcasters to move into a lower frequency. DCMS intends that, following this, the 700MHz spectrum for 4G mobile communications use will be auctioned by the next Parliament.

The government has prequalified the expansion of Virgin Media’s ultrafast broadband network for the UK Guarantees Scheme, supporting Virgin’s proposed £3bn investment. DCMS announces that it is actively engaging with broadband operators to explore how the remaining capacity within the Scheme can be used to support and accelerate further investment programmes.

Hope at last for rural business?

Research published in January 2015 by the Federation of Small Businesses (FSB) found that 49% of rural small businesses are dissatisfied with the quality of their broadband provision, compared to a far lower level of dissatisfaction (28%) in comparable urban businesses. Common complaints include unreliability and slow upload and download speeds - problems that are set to worsen as small firms become increasingly reliant on a high quality broadband connection to do business.

The FSB's research concludes that the current lack of effective broadband infrastructure serving small firms threatens the expansion of the rural economy currently worth £400bn annually. The business opportunity includes 28% of all UK firms and over one million small businesses.

Mike Cherry, National Policy Chairman for the Federation of Small Businesses, said:

"This research paints a worrying picture of a divided business broadband landscape in the UK and, unless addressed, highlights a clear obstacle to growth in the coming years. We risk seeing the emergence of a two-speed online economy resulting from poor rural broadband infrastructure. A reliable Internet connection is now viewed as a key business requirement by 94% of small UK businesses, yet continued poor connectivity in rural areas represents a huge missed opportunity for economic growth in these parts of the country. "

Rural Strategy

The Policy Paper addresses the need for high-speed broadband in rural areas, with specific recognition its essential role in "balancing the economy and levelling the economic playing field for businesses in rural areas"

The Policy Paper reports government investment of £1.7 billion in rural broadband development, set to take superfast broadband to 95% of premises by 2017.

Viable solutions, or reinforcing easy wins?

A reliable internet connection is now viewed as a key business requirement by 94% of small UK businesses, yet continued poor connectivity in rural areas represents a huge missed opportunity for economic growth in these parts of the country.

Organisations as diverse as the FSB and the Countryside Alliance are agreed that the government's target to deliver 24Mbps broadband to "nearly all" by 2017 is "not sufficiently ambitious", especially for rural businesses left receiving "just 2Mbps, which is barely sufficient for even basic usage." These organisations, as well as rural businesses and individuals, are unlikely to be satisfied while broadband improves for many, but the status quo remains unchanged where improvement is most needed.

The government's claims of concern for aiding rural businesses by improving broadband connection are also likely to ring hollow in light of the government's decision in August 2014 to specifically exclude rural businesses from its broadband grant scheme. DCMS's Broadband Connection Vouchers allow SMEs in cities across the UK to apply for grants of up to £3,000 to upgrade their broadband connection. This scheme is to be extended under the Policy Paper, rolling out the scheme to an additional 28 cities, taking the total to 50 cities; however, this is unlikely to be any panacea, as the core problem of little or no broadband connection in rural areas remains unaddressed.

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