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Rec to the EU Council Europe and the GII -- sorry for the format but ..
From: David Farber <farber () linc cis upenn edu>
Date: Sat, 9 Jul 1994 17:26:28 -0400
installed. Markets for business Large and small companies and professional users are already leading the way in exploiting the new technologies to raise the efficiency of their management and production systems. And more radical changes to business organisation and methods are on the way. Business awareness of these trends and opportunities is still lower in Europe compared to the US. Companies are not yet fully exploiting the potential for internal reorganisation and for adapting relationships with suppliers, contractors and customers. We have a lot of pent up demand to fill. Business awareness of these trends and opportunities is still lower in Europe compared to the US. In the business markets, teleconferencing is one good example of a business application worth promoting, while much effort is also being dedicated worldwide to the perfection of telecommerce and electronic document interchange (EDI). Both offer such cost and time advantages over traditional methods that, once applied, electronic procedures rapidly become the preferred way of doing business. According to some estimates, handling an electronic requisition is one tenth the cost of handling its paper equivalent, while an electronic mail (e-mail) message is faster, more reliable and can save 95% of the cost of a fax. Electronic payments systems are already ushering in the cashless society in some parts of Europe. We have a sizeable lead over the rest of the world in smart card technology and applications. This is an area of global market potential. Markets for small and medium sized enterprises Though Europe's 12 million SMEs are rightly regarded as the backbone of the European economy, they do need to manage both information and managerial resources better. They need to be linked to easy access, cost-effective networks providing information on production and market openings. The competitiveness of the whole industrial fabric would be sharpened if their relationships with large companies were based on the new technologies. Networked relationships with universities, research institutes and laboratories would boost their prospects even more by helping to remedy chronic R&D deficiencies. Networking will also diminish the isolation of SMEs in Europe's less advantaged regions, helping them to upgrade their products and find wider markets. Markets for consumers These are expected to be richly populated with services, from home banking and teleshopping to a near-limitless choice of entertainment on demand. In Europe, like the United States, mass consumer markets may emerge as one of the principal driving forces for the information society. American experience already shows that the development markets encounters a number of obstacles and uncertainties. Given the initial high cost of new pay-per-view entertainment services, and of the related equipment, as well as the high cost of bringing fibre optics to the home, a large mass consumer market will develop more easily if entertainment services are part of a broader package. This could also include information data, cultural programming, sporting events, as well as telemarketing and teleshopping. Pay-per-view for on-line services, as well as advertising, will both be necessary as a source of revenue. To some extent, existing satellite and telephone infrastructure can help to serve the consumer market in the initial phase. At the moment, this market is still only embryonic in Europe and is likely to take longer to grow than in the United States. There, more than 60% of households are tapped by cable TV systems which could also carry text and data services. In Europe, only 25% are similarly equipped, and this figure masks great differences between countries, e.g. Belgium (92%) and Greece (1-2%). Another statistic: in the United States there are 34 PCs per hundred citizens. The European figure overall is 10 per hundred, though the UK, for instance, at 22 per hundred, is closer to the US level of computer penetration. Lack of available information services and poor computer awareness could therefore prove handicaps in Europe. Telecommunication networks are, however, comparable in size and cover, but lag behind in terms of utilisation. These networks, therefore, can act as the basic port of access for the initial services, but stimulation of user applications is still going to be necessary. Such structural weaknesses need not halt progress. Europe's technological success with CD-ROM and CD-I could be the basis for a raft of non-networked applications and services during the early formative years of the information society. These services on disk have considerable export potential if Europe's audio-visual industry succeeds in countering current US dominance in titles. In terms of the market, France's Minitel network already offers an encouraging example that European consumers are prepared to buy information and transaction services on screen, if the access price is right. It reaches nearly 30 million private and business subscribers through six million small terminals and carries about 15,000 different services. Minitel has created many new jobs, directly and indirectly, through boosting business efficiency and competitiveness. In the UK, the success of the Community-sponsored Homestead programme, using CD-I, is indicative, as is the highly successful launch of (an American) dedicated cable teleshopping channel. Meanwhile in the US, where the consumer market is more advanced, video-on-demand and home shopping could emerge as the most popular services. Audio-visual markets Our biggest structural problem is the financial and organisational weakness of the European programme industry. Despite the enormous richness of the European heritage, and the potential of our creators, most of the programmes and most of the stocks of acquired rights are not in European hands. A fast growing European home market can provide European industry with an opportunity to develop a home base and to exploit increased possibilities for exports. Linguistic fragmentation of the market has long been seen as a disadvantage for Europe's entertainment and audio-visual industry, especially with English having an overwhelming dominance in the global market - a reflection of the US lead in production and, importantly, in distribution. This lead, which starts with cinema and continues withtelevision, is likely to be extended to the new audio-visual areas. However, once products can be easily accessible to consumers, there will be more opportunities for expression of the multiplicity of cultures and languages in which Europe abounds. ...once products can be easily accessible to consumers, there will be more opportunities for expression of the multiplicity of cultures and languages in which Europe abounds. Europe's audio-visual industry is also burdened with regulations. Some of these will soon be rendered obsolete by the development of new technologies, hampering the development of a dynamic European market. As a first step to stimulating debate on the new challenges, the Commission has produced a Green Paper on the audio-visual industry. _________________________________________________________________ CHAPTER 2 A MARKET-DRIVEN REVOLUTION A break with the past The Group is convinced that technological progress and the evolution of the market mean that Europe must make a break from policies based on principles which belong to a time before the advent of the information revolution. The key issue for the emergence of new markets is the need for a new regulatory environment allowing full competition. This will be a prerequisite for mobilising the private capital necessary for innovation, growth and development. In order to function properly, the new market requires that all actors are equipped to participate successfully, or at least that they do not start with significant handicaps. All should be able to operate according to clearrules, within a single, fair and competitive framework. The Group recommends Member States to accelerate the ongoing process of liberalisation of the telecom sector by: * opening up to competition infrastructures and services still in the monopoly area * removing non-commercial political burdens and budgetary constraints imposed on telecommunications operators * setting clear timetables and dead lines for the implementation of practical measures to achieve these goals Ending monopoly This is as true for the telecommunications operators (TOs) as for others. It is now generally recognised as both necessary and desirable that the political burdens on them should be removed, their tariffs adjusted and a proper regulatory framework created. Even the operations of those TOs whose status has already evolved over recent years are not fully in line. It is possible to end monopoly. In future, all licensed public operators should assume their share of public service responsibilities (e.g. universal service obligation and the provision of equal access to networks and services). A competitive environment requires the following: * TOs relieved of political constraints, such as: + subsidising public functions; + external R&D activities; + contributions to land planning and management objectives; + the burden to carry alone the responsibility of universal service; * a proper regulatory framework designed to achieve: + market regulation to enable and to protect competition; + a predictable environment to make possible strategic planning and investment; * adjustment of tariffs. Enabling the market The Group recommends the establishment at the European level of an authority whose terms of reference will require a prompt attention. In order for the market to operate successfully, the Group has identified the following objectives and recommendations: Evolution in the regulatory domain Identify and establish the minimum of regulation needed, at the European level, to ensure the rapid emergence of efficient European information infrastructures and services. The terms of reference of the authority which will be responsible for the enforcement of this regulation is a question that will require a prompt attention. The urgency of the matter is in direct relation to the prevailing market conditions. A clear requirement exists for the new "rules of the game" to be outlined as soon as possible. The market place will then be in a position to anticipate the forthcoming framework, and the opportunity will exist for those wishing to move rapidly to benefit from these efforts. The authority will need to address: * the regulation of those operations which, because of their Community-wide nature, need to be addressed at the European level, such as licensing, network interconnection when and where necessary, management of shared scarce resources (e.g. radio-frequency allocation, subscriber numbering and advice to Member States regulatory authorities on general issues. * a single regulatory framework valid for all operators, which would imply lifting unequal conditions for market access. It would also ensure that conditions for network access and service use be guided by the principles of transparency and non-discrimination, complemented by practical rules for dispute resolution and speedy remedy against abuse dominance. Interconnection and interoperability Two features are essential to the deployment of the information infrastructure needed by the information society: one is a seamless interconnection of networks and the other that the services and applications which build on them should be able to work together (interoperability). In the past the political will to interconnect national telephone networks resulted in hundreds of millions of subscriber connections world-wide. Similar political determination and corresponding effort are required to set up the considerably more complex information infrastructures. Interconnection of networks and interoperability of services and applications are recommended as primary Union objectives. The challenge is to provide interconnections for a variety of networking conditions (e.g. fixed and new type of networks, such as mobile and satellite) and basic services (e.g. Integrated Service Digital Network - ISDN). Currently, the positions of monopoly operators are being eroded in these fast-developing areas. Joint commercial decisions must be taken by the TOs without delay to ensure rapid extension of European basic services beyond telephony. This would improve their competitive position vis--vis non-European players in their own markets. The European information society is emerging from many different angles. European infrastructure is evolving into an ever tighter web of networks, generic services, applications and equipment, the development, distribution and maintenance of which occupy a multitude of sources worldwide. In an efficient and expanding information infrastructure, such components should work together. Assembling the various pieces of this complex system to meet the challenge of interoperability would be impossible without clear conventions. Standards are such conventions. Open systems standards will play an essential role in building a European information infrastructure. Standards institutes have an honourable record in producing European standards, but the standardisation process as it stands today raises a number of concerns about fitness for purpose, lack of interoperability, and priority setting that is not sufficiently market driven. Action is required at three different levels: * at the level of operators, public procurement and investors: following the successful example of GSM digital mobile telephony, market players (industry, TOs, users) could establish Memoranda of Understanding (MoU) to set the specifications requirements for specific application objectives. These requirements would then provide input to the competent standardisation body. This type of mechanism would adequately respond to market needs. Operators, public procurement and investors should adopt unified open standard-based solutions for the provision and the procurement of information services in order to achieve global interoperability. * at the level of the European standards bodies: These should be encouraged to establish priorities based on market requirements and to identify publicly available specifications, originated by the market, which are suitable for rapid transformation into standards (e.g. through fast track procedures). * at the level of the Union: European standardisation policy should be reviewed in the light of the above. When the market is not providing acceptable technical solutions to achieve one of the European Union's objectives, a mechanism should be sought to select or generate suitable technologies. World-wide interoperability should be promoted and secured. The Group recommends a review of the European standardisation process in order to increase its speed and responsiveness to markets. Urgent action to adjust tariffs Reduction in international, long distance and leased line tariffs will trigger expansion in the usage of infrastructures, generating additional revenues, and simultaneously giving a major boost to generic services and innovative applications Reduction in international, long distance and leased line tariffs will trigger expansion in the usage of infrastructures, generating additional revenues, and simultaneously giving a major boost to generic services and innovative applications In most cases, the current unsatisfactory tariff situation results from the TOs' monopoly status and a variety of associated political constraints. The introduction of competitive provision of services and infrastructures implies that TOs would be able to adjust their tariffs in line with market conditions. Rebalancing of international and long-distance versus local tariffs is a critical step in this process. The Group recommends as a matter of urgency the adjustment of international, long distance and leased line tariffs to bring these down into line with rates practised in other advanced industrialised regions. Adjustment of tariffs should be accompanied by the fair sharing of public service obligations among operators.
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- Rec to the EU Council Europe and the GII -- sorry for the format but .. David Farber (Jul 09)
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- Rec to the EU Council Europe and the GII -- sorry for the format but .. David Farber (Jul 09)
- Rec to the EU Council Europe and the GII -- sorry for the format but .. David Farber (Jul 09)
- Rec to the EU Council Europe and the GII -- sorry for the format but .. David Farber (Jul 09)
- Rec to the EU Council Europe and the GII -- sorry for the format but .. David Farber (Jul 09)