Free roaming just a placebo; EU must take the bitter medicine

[Commentary] The European Union Digital Single Market initiative is a set of 7 goals (interoperability, security, broadband, research, innovation, digital literacy, etc.), with an associated 101 actions to be realized by 2020.

The EU tracks its progress on a Digital Scoreboard. From time to time, the EU Commission makes rules intended to expedite these goals. In in the EU has the courage to take on the root causes of its competitiveness problem because it requires a fundamental change to the status quo. Instead politicians rely on feel good proposals without substance, giving voters a placebo which they hope will make them feel better.

With EU Parliamentary elections in May, politicians have reached a new low in pandering to voters, as a recent Industry, Research and Energy Committee vote on mobile roaming demonstrates.

The only way an operator can be competitive is to own its own network across as large a distance as possible. The tortured EU approach of managed access means that an operator has to lease its network at a regulated rate. Whatever investment it makes must be shared with resellers. It is difficult, if not impossible, to earn a profit under this scenario. A single, low tax rate across Europe would do more for consumers and the ailing economy than any of the EU’s sugar-coated placebos. It would make the whole EU competitive, increase employment, and create a level playing field for goods and services. But don’t expect any bitter medicine in the EU, especially before an election.

[Layton studies Internet economics at the Center for Communication, Media, and Information Technologies (CMI) at Aalborg University in Copenhagen, Denmark]