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SPEECH/11/70

Neelie Kroes

Vice-President of the European Commission responsible for the Digital Agenda

Ending fragmentation of the Digital Single Market

Business For New Europe event

London, 7 February 2011

Minister Vaizey, Ladies and Gentlemen, good morning.

It is a great pleasure to be here today. I know we share the same passion for Europe’s Single Market. Indeed, I understand that Lord Brittan addressed you recently about the need for a 'ruthless focus' on completing the Single Market. I have to say that matches my view perfectly.

The growth and development of the digital Single Market is where we need to put our attention now. Every gap, and every failure to keep up with developments in the digital economy that lead to growth, holds us back from long-term recovery. In times of austerity, even more so.

Just as the UK Government is currently taking hard policy and investment decisions, at the European level we need to make hard reforms if we want the Single Market to live up to its name.

This level of ambition is there in the Single Market Act reforms introduced by my colleague Michel Barnier, and in my own Digital Agenda for Europe. These are truly comprehensive reform agendas – and they have to be – because we can’t afford to waste our time playing at the edges.

For me, the top of the list is ending fragmentation in the digital Single Market and ensuring it runs using the best digital infrastructure.

Today, for example, a company specialising in health equipment needs 27 certificates if it wants to operate in all 27 member states. That is no way to grow eHealth markets or deal with our ageing population.

The concept of mobile roaming could hardly be less obsolete in this age. Roaming price offers in the UK tend to be better than most in Europe, I admit. But there is no reason why the cost to access the internet from a smartphone should jump ten or twenty-fold once you enter the Channel Tunnel or go to a wedding in Spain.

So, where can we make the optimal impact?

It will not be easy, but opening up access to online content is a key start. Digitisation has fundamentally changed content industries, but licensing models simply have not kept up with this. National licensing can create a series of Berlin cultural walls. The price both in pounds and frustration is all too real, as creators are stifled and consumers are left empty-handed. At the same time, we have to fight piracy, in order to allow a fair remuneration of right-holders and give the legal offers a chance to succeed. Entrepreneurs suffer too. But these problems are not limited to the marketplace and economic implications. Think of the treasures that are kept from the public because we can’t identify the right-holders of certain works of art. These "orphan works" are stuck in the digital darkness when they could be on digital display for future generations.

It is time for this dysfunction to end. We need a simple, consumer-friendly legal framework for making digital content available across borders in the EU.

More broadly, I am sure you have all tried and failed to complete an online cross-border transactions before. Or maybe you gave up before you started. Often it’s the most obvious and simple things that don’t work: like a site does not accept your type of card, or the supplier will not deliver to you and so on.

It is these sorts of day to day problems that are a killer for small business. I’ve got small business in my blood – and I think the Internet is the best opportunity most small businesses will ever receive. So I am extremely keen to work with you to lay down exactly the right conditions for letting small businesses get on with what they do best – business. Whether it is e-invoices, or the Single European Payment Area, or making sure your ICT devices will talk to each other when you need them. I am looking to help UK businesses be leaders in their fields.

The Financial Times ran an interesting story in November 2010 about the UK now being a “nation of digital shopkeepers”. They presented a long list of statistics showing how vibrant businesses were who embraced ICT. And it certainly seems that where the UK goes with e-Commerce other parts of Europe will follow. Can you imagine what growth we would unleash if we worked together to fix the underlying problems once and for all?

Think for example, what would change if every city in Britain had Internet like London's financial district, with 100 megabits per second, or even like Rutland in the Midlands. This is a rural area where citizens equipped themselves with 40 megabits per second. It’s a revolution we can invite into our shops and homes if we only dare to make the investment.

Of course if business people and consumers don’t have confidence in their skills and in the systems themselves, the best infrastructure will not make much difference. So we have to build digital confidence. Build it by protecting privacy rights, combating security threats, investing in skills and access. Indeed, like many of you, I am a huge fan of Martha Lane Fox and her work to see us all benefit from getting everyone online. If you have the chance to work with her on this – take it.

Again this shows us that the Digital Agenda is not merely a list of actions to tick off in Brussels policy papers. It is really a new way of working – one that requires me to be here today scouting for partners, and urging you to see that the success of the Digital Agenda actually lies in your own hands.

What have we achieved?

I went on my Christmas break with mixed feelings. I think we’ve mobilised a lot of interest in the Digital Agenda. And we have, no doubt, set some very tough targets. And we have started taking concrete action – both policy output like our broadband package from September and building up the networks of collaborators needed to change our digital culture.

But each day is still an uphill battle – to get all levels of government and business to see that digital innovation and investment is of direct benefit to them. We don’t have the imagery of a space race to help set the scene. But we still have to get this massive job done.

Of course, I am no fool when it comes to judging the limits of government action. So it is important to be clear: our job, at European level, is to enable the framework conditions and to bring parties together so that we enjoy the benefits of being a European family. But it is up to national governments and most importantly the private sector to do most of the implementing. In fact, it is worth repeating that virtually everything in the Digital Agenda is based on collaboration. It's about a team effort of literally millions. I have absolutely no doubt we are on the right course.

And with partners such as all of you here today, I remain optimistic. But please do tell me where we should speed up or change course, it is your Digital Agenda after all. And I need you to help make it a reality.


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