Opening Morning session - 14 June
This Forum Europe event is held annually in Brussels. This year’s event was particularly topical because the European institutions are working towards developing the EU Radio Spectrum Policy Program (RSPP) and thus there was substantial turnout from national regulators and European Commission officials.
The morning session on 14 June was moderated by our partner Gerry Oberst. Following an introduction by Economics Professor Gerard Pogorel, Gerry described the morning schedule and introduced three keynote speakers – Commission Vice-President Neelie Kroes; Member of Parliament Gunnar Hokmark, who is the rapporteur responsible for the RSPP within the European Parliament; and U.S. Ambassador to the EU, William E. Kennard, past FCC chairman.
Mrs. Kroes emphasized that Brussels needs to work with the 27 EU Member States to achieve the goals that European citizens expect, especially citizens who live in rural areas that do not have access to service. She noted that the convergence between fixed and mobile services is not possible without a mobile function, which calls for the spectrum necessary to support mobile services. The digital communications sector is a “global game,” she noted, with the EU at risk of being outclassed or “squeezed” from both the East and West. This theme of global competition and Europe’s place in the world was a constantly recurring concept, which we heard from other speakers described below. However, Europe is not far behind the game, as she noted progress in the next generation of mobile technology:
I am very impressed by the early entry into the market of 4th generation wireless services. In particular, LTE technology. Of the 60 countries where LTE rollout is already planned, 29 are in Europe, while Europe also accounts for 8 of the 14 that already have live networks. One year ago, we thought that companies in the US would be alone in pioneering the 4th generation systems, now we can say that Europe is in the lead.
Three key issues are central to the pending RSPP, according to Mrs. Kroes. First, opening up the 800 MHz digital dividend band is an important step to release spectrum for mobile broadband. The firm deadline of 2013 set forth in the RSPP contains limited opportunity for extensions for specific Member States, but she warned that this exemption should not be misused.
A second important aspect of the RSPP is the provision for an inventory of spectrum use, together with an assessment of whether that spectrum is being used efficiently. These assessments cannot rely totally on Member State views, because there must be a coherent approach across Europe.
Third, Mrs. Kroes emphasized that Europe must work globally, including at the ITU level and the upcoming world radiocommunication conference. Where there are crucial EU interests at stake, it is no longer acceptable to rely on an aggregation of Member State views, but instead there should be a clear focus on EU policy where it arises.
Mrs. Kroes stressed her optimism about research in the information technology arena and said this is needed to “make the cake bigger for everyone.” She also announced that the Commission will release a communication on shared use of spectrum in 2012. Based on his good work with the RSPP proposal, she urged MP Hokmark to act as rapporteur for this item as well.
In his ensuing presentation, Mr. Hokmark returned to the theme that Europe has lost its lead in spectrum management that had been gained through early deregulation and selection of a single GSM technology standard in the early 1990’s. He remarked that the Europe has the largest economy, but that the U.S. and Chinese markets were bigger and supported bigger players. Mr. Hokmark identified three main points:
- Creating an internal European market for digital Internet service will greatly foster the overall Internal market – it will level pricing across the Member States and increase competition.
- Market growth potential is enormous. Here, Mr. Hokmark stressed the need for speed and capacity. He said that the prospects of serving 650 million customers of the largest operator, China Telecom, would give a heart attack to European sales directors. Even a 10 percent market share of that market base would give economies of scale sufficient to fund new generations of equipment and services.
- Finally, Europe should strive to stay in the lead. Reform is absolutely necessary in this most crucial of sectors. Adoption of the RSPP is a critical element – even one of the most important – in the EU economy.
Ambassador Kennard said he spoke at the event with a certain sense of ‘deja vue,’ harkening back to his early visits to Brussels when the U.S. government sought to convince European officials to adopt multiple wireless standards. He said in retrospect that Europe had gotten it right and was leading the world with the GSM standard, and that some U.S. companies were still recovering from the U.S. approach.
However, Mr. Kennard then noted that Europe had lost that lead – “it all comes down to spectrum” and European policy needs to adjust to the spectrum crisis. He argued that the ICT sector was worth approximately the same amount in Europe and the U.S., even though Europe had a population about 200 million larger. In this light, ICT is underperforming in the EU relative to the U.S. Noting the U.S. government's efforts towards a wireless initiative, he said that the future of the Internet is wireless.
Recognizing that action to harmonize spectrum management is more difficult in Europe, with its 27 Member States, Ambassador Kennard said that there needs to be an intense political discussion about its future direction. For instance, he noted that all the evidence in the U.S. says that larger, regional auctions raise more money and result in higher valued spectrum use. Why cannot Europe seek more pan-European auctions or licensing, he asked?