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Subject: Rec to the EU Council Europe and the GII -- sorry for the format but .... djf
Two elements should accompany the process:
* TOs freed from politically imposed budgetary constraints;
* a fair and equitable sharing of the burden of providing universal
services between all licensed operators.
Fostering critical mass
Market segments based on the new information infrastructures cannot
provide an adequate return on investment without a certain level of
demand. In most cases, competition alone will not provide such a mass,
or it will provide it too slowly.
A number of measures should be taken in order to reach this goal:
* co-operation should be encouraged among competitors so as to
create the required size and momentum in particular market areas.
The already mentioned GSM MoU is an archetypal example of how
positive this approach can be.
* agreement between public administrations to achieve common
requirements and specifications, and a commitment to use these in
procurement at national and European levels.
* extensive promotion and use of existing and forthcoming European
networks and services.
* awareness campaigns, notably directed at public administrations,
SMEs and educational institutions.
It is recommended to promote public awareness. Particular attention
should be paid to the small and medium sized business sector, public
administrations and the younger generation.
In addition, everyone involved in building up the information society
must be in a position to adapt strategies and forge alliances to
enable them to contribute to, and benefit from, overall growth in the
field.
Secure the world-wide dimension
The Group recommends that the openness of the European market should
find its counterpart in markets and networks of other regions of
the world. It is of paramount importance for Europe that adequate
steps are taken to guarantee equal access.
Since information infrastructures are borderless in an open market
environment, the information society has an essentially global
dimension.
The actions advocated in this Report will lead to a truly open
environment, where access is provided to all players. This openness
should find its counterpart in markets and networks of other regions
of the world. It is obviously of paramount importance for Europe that
adequate steps are taken to guarantee equal access
Towards a positive outcome
The responses outlined above to the challenges posed by the
deployment of the information society will be positive for all
involved in its creation and use.
Telecommunications, cable and satellite operators will be in a
position to take full advantage of market opportunities as they see
fit, and to expand their market share.
The service provider and content industries will be able to offer
innovative products at attractive prices.
Citizens and users will benefit from a broader range of competing
services.
Telecommunication equipment and software suppliers will see an
expanding market.
Those countries that have already opted for faster liberalisation,
are experiencing rapidly expanding domestic markets that provide new
opportunities for TOs, service providers and industry. For the
others, the price to pay for a slower pace of liberalisation will be
a stiffer challenge from more dynamic foreign competitors and a
smaller domestic market. Time is running out. If action is not
accelerated, many benefits will arrive late, or never.
It is an essential recommendation of the Group that governments
support accelerated liberalisation by drawing up clear timetables and
deadlines with practical measures to obtain this goal.
In this context, the 1993 Council Resolution remains a useful point
of reference. Even before the specified dates, governments should
take best advantage of its built inflexibility to seize the
opportunities offered by a burgeoning competitive market. They should
speed up the opening to competition of infrastructures and of those
services that are still in the monopoly area, as well as remove
political burdens imposed on their national TOs.
In this context, the 1993 Council Resolution remains a useful
point of reference. Even before the specified dates, governments
should take best advantage of its built-in flexibility to seize
the opportunities offered by a burgeoning competitive market. They
should speed up the opening to competition of infrastructures and
of those services that are still in the monopoly area, as well as
remove political burdens imposed on their national TOs.
_________________________________________________________________
CHAPTER 3
COMPLETING THE AGENDA
Several policy issues have to be faced in parallel with actions
needed to create an open, competitive and market-driven information
society. Disparate national regulatory reactions carry a very real
threat of fragmentation to the internal market.
Here there are two different sets of issues and problems: one
relating to the business community, the other more to individuals and
the information society, with specific reference to privacy.
As we move into the information society, a regulatory response in key
areas like intellectual property, privacy and media ownership is
required at the European level in order to maximise the benefits of
the single market for all players. Only the scale of the internal
market is sufficient to justify and attract the required financing of
high performance trans-European information networks.
Therefore, applying single market principle of freedom of movement of
all goods and services, to the benefit of Europeans everywhere, must
be our key objective.
The information society is global. The Group thus recommends that
Union action should aim to establish a common and agreed
regulatory framework for the protection of intellectual property
rights, privacy and security of information, in Europe and, where
appropriate internationally.
Protection of intellectual property rights (IPR)
While there is a great deal of information that is in the public
domain, there is also information containing added value which is
proprietary and needs protection via the enforcement of intellectual
property rights. IPRs are an important factor in developing a
competitive European industry, both in the area of information
technology and more generally across a wide variety of industrial and
cultural sectors.
Creativity and innovation are two of the Union's most important
assets. Their protection must continue to be a high priority, on the
basis of balanced solutions which do not impede the operation of
market forces.
The global nature of the services that will be provided through the
information networks means that the Union will have to be party to
international action to protect intellectual property. Otherwise,
serious difficulties will arise if regulatory systems in different
areas of the world are operating on incompatible principles which
permit circumvention or create jurisdictional uncertainties.
The Group believes that intellectual property protection must rise
to the new challenges of globalisation and multimedia and must
continue to have a high priority at both European and
international levels.
In this global information market place, common rules must be agreed
and enforced by everyone. Europe has a vested interest in ensuring
that protection of IPRs receives full attention and that a high level
of protection is maintained. Moreover, as the technology advances,
regular world-wide consultation with all interested parties, both the
suppliers and the user communities, will be required.
Initiatives already under way within Europe, such as the proposed
Directive on the legal protection of electronic databases, should be
completed as a matter of priority.
Meanwhile, in order to stimulate the development of new multimedia
products and services, existing legal regimes - both national and
Union - will have to be re-examined to see whether they are
appropriate to the new information society. Where necessary,
adjustments will have to be made.
In particular, the ease with which digitised information can be
transmitted, manipulated and adapted requires solutions protecting
the content providers. But, at the same time, flexibility and
efficiency in obtaining authorisation for the exploitation ofworks
will be a prerequisite for a dynamic European multimedia industry.
Privacy
The demand for the protection of privacy will rightly increase as the
potential of the new technologies to secure (even across national
frontiers) and to manipulate detailed information on individuals from
data, voice and image sources is realised. Without the legal security
of a Union-wide approach, lack of consumer confidence will certainly
undermine rapid development of the information society.
Europe leads the world in the protection of the fundamental rights of
the individual with regard to personal data processing. The
application ofnew technologies potentially affects highly sensitive
areas such as those dealing with the images of individuals, their
communication, their movements and their behaviour. With this in
mind, it is quite possible that most Member States will react to
these developments by adopting protection, including trans-frontier
control of new technologies and services.
Disparities in the level of protection of such privacy rules create
the risk that national authorities might restrict free circulation of
a wide range of new services between Member States in order to
protect personal data.
The Group believes that without the legal security of a Union-wide
approach, lack of consumer confidence will certainly undermine the
rapid development of the information society. Given the importance
andsensitivity of the privacy issue, a fast decision from Member
States is required on the Commission's proposed Directive setting
out general principles of data protection.
Electronic protection (encryption), legal protection and security
Encryption is going to become increasingly important in assuring the
development of the pay services. Encryption will ensure that only
those who pay will receive the service. It will also provide
protection against personal data falling into the public domain.
International harmonisation would assist the market if it were to
lead to a standard system of scrambling. Conditional access should
ensure fair and open competition in the interests of consumers and
service providers.
Encryption is particularly important for telecommerce, which requires
absolute guarantees in areas such as the integrity of signatures and
text, irrevocable time and date stamping and international legal
recognition.
However, the increased use of encryption and the development of a
single encryption system will increase the returns from hacking into
the system to avoid payment or privacy restrictions. Without a legal
framework that would secure service providers against piracy of their
encryption system, there is the risk that they will not get involved
in the development of these new services.
The Group recommends acceleration of work at European level on
electronic and legal protection as well as security.
On the other hand, governments may need powers to override encryption
for the purposes of fighting against crime and protecting national
security.
An answer given at a national level to this and to the hacking issue
will inevitably prove to be insufficient because communications reach
beyond national frontiers and because the principles of the internal
market prohibit measures such as import bans on decoding equipment.
Therefore, a solution at the European level is needed which provides
a global answer to the problem of protection of encrypted signals and
security. Based on the principles of the internal market it would
create parity of conditions for the protection ofencrypted services
as well as the legal framework for the development of these new
services.
Media ownership
In addition to ownership controls to prevent monopoly abuse, most
countries have rules on media and cross media ownership to preserve
pluralism and freedom of expression.
In practice, these rules are a patchwork of inconsistency which tend
to distort and fragment the market. They impede companies from taking
advantage of the opportunities offered by the internal market,
especially in multimedia, and could put them in jeopardy vis--vis
non-European competitors.
In current circumstances, there is a risk of each Member State
adopting purely national legislation in response to the new problems
and challenges posed by the information society. Urgent attention has
to be given to the question of how we can avoid such an undermining
of the internal market and ensure effective rules which protect
pluralism and competition.
Rules at the European level are going to be crucial, given the
universality of the information society and its inherently
transborder nature. The Union will have to lead the way in heading
off deeper regulatory disparity. In so doing it will reinforce the
legal security that is vital for the global competitiveness of
Europe's media industry.
The Group believes that urgent attention should be given to the
question of how we can avoid divergent national legislation on
media ownership undermining the internal market. Effective rules
must emerge to protect pluralism and competition.
The role of competition policy
Competition policy is a key element in Union strategy. It is
especially important for consolidating the single market and for
attracting the private capital necessary for the growth of the
trans-European information infrastructure.
Areas of the information society are beset by intense globalising
pressures. These affect both European and non-European companies
operating inside the Union. If appropriate, the notion of a global,
rather than a Union-wide, market should now be used inassessing
European competition issues such as market power, joint ventures and
alliances.
Competition Policy is a key element in Europe's strategy. The
Group recommends that the application of competition rules should
reflect the reality of the newly emerging global markets and the
speed of change in the environment.
The aim should not be to freeze any set of regulations, but rather to
establish procedures and policies through which the exploding
dynamism of the sector can be translated into greater opportunities
for wealth and job creation.
Like other commercial players, companies involved in the supply of
technologies and services must be in a position to adapt their
strategies and to forge alliances to enable them to contribute to,
and to benefit from, overall growth in the sector in the framework of
competition policy.
Technology
The technological base in Europe today is sufficient to launch the
applications proposed in this reports without delay. They must focus
on realistic systems on a sufficient scale to explore the value of
the services offered to the user, and to evaluate the economic
feasibility of the new information systems.
However, new technologies do still have to be developed for their
full-scale introduction following these demonstrations. In
particular, the usability and cost-effectiveness of the systems must
be improved, and the consequences of mass use further investigated.
The research programmes of the Union and of Member States, in
particular the Fourth Framework Programme, should be implemented in
such a way as to take into account market requirements. Technical
targets and the timing of projects must be defined with appropriate
user involvement.
_________________________________________________________________
CHAPTER 4
THE BUILDING BLOCKS OF
THE INFORMATION SOCIETY
Communications systems combined with advanced information
technologies are keys to the information society. The constraints of
time and distance have been removed by networks (e.g. telephone,
satellites, cables) which carry the information, basic services (e.g.
electronic mail, interactive video) which allow people to use the
networks and applications (e.g. distance learning, teleworking) which
offer dedicated solutions for user groups.
The opportunity for the Union - strengthening its existing networks and
accelerating the creationof new ones
ISDN: a first step
The traditional telephone network is changing its character. Having
been built as a universal carrier for voice, it now has to meet the
communication requirements of a modern economy going far beyond
simple telephone calls.
One important development is the Integrated Service Digital Network
ISDN. This offers the opportunity to send not only voice, but also
data and even moving images through telephone lines.
ISDN is particularly suited for the communications needs of small and
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