Connectivity challenges for the new Commission – Euractiv

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FFTélécoms perspectives on the Commission’s White Paper « How to master Europe’s digital infrastructure needs? », Letta and Draghi’s reports

How to secure operators’ ability to invest?

Over the last months, the Commission’s White Paper on digital infrastructures, along with the Letta and Draghi reports on the single market and European competitiveness, all identified key challenges for the future of electronic communications. These documents provide a comprehensive assessment of Europe’s connectivity landscape and advocate for greater investment support in digital infrastructures.

For telcos, the main challenge is indeed to sustain high network investments in order to adapt to major technological development such as softwarisation and virtualization of network functions, while meeting deployment objectives and modernizing their networks to accommodate an ever-increasing level of traffic, mainly generated today by the exponential growth of video content.

Despite significant past investments, including nearly 114 billion euros in France alone in the last decade, studies conducted for the European Commission indicate that achieving Digital Decade targets may require up to 200 billion euros in additional infrastructure investment by 2030, which does not seem achievable under current circumstances.

Meeting this challenge must be a top priority for the Executive Vice-President Designate in charge of digital, Henna Virkunnen. The Digital Network Act, eagerly awaited by the whole industry, will have to focus on adapting regulatory frameworks in order to promote investment and drive innovation. To support this ambitious regulation, numerous valuable proposals have been put forward by the telecom sector, as well as in the White Paper and the Draghi and Letta reports.

Ensuring fairness in the connectivity value chain

The issue of asymmetries – both regulatory and in market power – within the connectivity value chain, and particularly the changing nature of the relationships between electronic communications operators and very large content and applications providers, who alone account for over 50% of traffic1, emerges as a critical concern.

By the position they have in adjacent markets, the unavoidable nature of their content for end-users and the pressures they can exert on telecom services providers, these large traffic generators have gained real market power and generate network investment costs that they are not incentivized to limit or directly bear. Very recent examples illustrate how difficult it is for telecom operators to obtain fair compensation for network usage through commercial agreements.

To mitigate this issue, we believe the Commission should implement the solution proposed within the White Paper and detailed in the Drahi report, which is to encourage contractual commercial agreement between operators and large content providers, supported by a dispute resolution mechanism with an independent arbitrator and within a limited timeframe.

In addition, FFTélécoms also believes that the European Commission should consider extending the principles of net neutrality to all relevant digital services, to ensure the smooth functioning of the internet for consumers and foster fairness and innovation along the value chain.

Promoting sustainable digital practices

Committed to achieving the green transition of our economy, FFTélécoms commends the Commission’s White Paper for its proactive stance on addressing sustainability challenges facing the digital ecosystem. Despite operators’ continuous efforts to invest in in the most efficient technologies, the sustained traffic growth driven by a few digital giants that have adopted data-intensive practices, notably based on addictive, “attention economy”-based mechanisms, without incentives for eco-design, strains resources.

We are therefore convinced that achieving sustainability objectives and mitigating the increase in carbon emissions caused by ever-increasing demand for traffic, driving investment from operators to densify networks and the constant need for new equipment, requires greater responsibility and accountability from all digital players, especially large content and application providers. This requires in our view to send an economic signal to those large players in terms of bandwidth usage, complemented by the definition of mandatory standards, as proposed by the Commission. The general framework for the eco-design of digital services (RGESN) developed in France by Arcep and Arcom could in that sense serve as a model for technical best practices to make mandatory.

Navigating between greater harmonization and the need to safeguard efficient regulatory frameworks

FFTélécoms believes that achieving full integration of the single market for electronic communications requires a concerted effort to harmonize regulations and practices across the EU, removing outdated legislation, and ensuring consistency in regulatory frameworks.

In this regard, adopting a more investment-friendly and predictable approach to EU spectrum policy, aligning with best practices – especially regarding licenses duration which could be doubled according to Draghi’s report, would be crucial to incentivize investments. We also consider that a comprehensive reassessment of existing sector-specific rules, for example in the fields of consumer protection or privacy, is essential to harmonize and modernize the regulatory framework, based on best practices and best-in-class standards, rather than relying on the country-of-origin principle.

Finally, considering the different choices made in the EU regarding the deployment of fibre, convergence of access policies is out of reach: in France, the symmetric framework for fibre networks is a strong asset which should be preserved.

 

 

About FFTélécoms

Established in 2007, the French Telecoms Federation (Fédération Française des Télécoms, “FFTélécoms”) represents the electronic communications operators in France. Its missions are to promote an innovative and responsible industry with respect to society, the environment, people and businesses, to protect the economic interests of the sector and to promote the image of its members and of the profession at national and international level.





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