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C4C’s Response to the EC White Paper Consultation: Key Insights and Recommendations

C4C’s Response to the EC White Paper Consultation: Key Insights and Recommendations

Cross-posted from C4C’s LinkedIn page – see the original article

The Coalition for Creativity (C4C) submitted its response to the European Commission’s White Paper on “How to Master Europe’s Digital Infrastructure Needs.” Our feedback focuses on several critical areas where we believe the Commission’s proposals require reconsideration. You can contribute too, until 30 June!

Here’s a summary of our key points:

  1. Clarifying convergence vs. coexistence: The White Paper’s push for regulatory convergence of cloud and telecommunications services is based on a misconception. These sectors operate under distinct market conditions and necessitate separate regulatory frameworks. A forced convergence could stifle innovation and disrupt market dynamics.
  2. Real level playing field: Creating a level playing field requires recognising the fundamental differences between telecoms and cloud providers. The hypothetical convergence suggested by the White Paper doesn’t align with market realities. Regulation should respond to existing market dynamics, not theoretical scenarios.
  3. Regulatory balance across the Internet stack: The narrative that cloud providers escape stringent regulations is misleading. Cloud services are governed by robust regulatory frameworks covering consumer protection, security, and interoperability. Extending telecom-specific regulations to these sectors could hamper competition and innovation, and simply does not make sense.
  4. Questionable indirect contribution models: Proposing indirect contributions through a universal service obligation after the strong/forceful pushback against network fees risks introducing inefficiencies and regulatory burdens. This approach could distort market incentives, increase costs for all market players and consumers, and deter timely investments in network infrastructure.
  5. Unnecessary dispute resolution mechanisms: The White Paper’s proposal for new dispute resolution mechanisms lacks justification, as BEREC has repeatedly noted the absence of any substantial legal or economic evidence to support regulatory intervention in the peering market. Introducing unnecessary regulatory layers could create more problems than it solves.

Our Recommendations:

  • Focus on market-driven integration: The Commission should prioritise creating a regulatory environment that respects the distinct needs of each sector, fostering integration driven by market forces.
  • Maintain pro-competitive frameworks: Stick to the original goals of the telecoms regulatory framework, reducing ex ante regulation where competition laws suffice.

Our Words of Caution:

  • Avoid industrial policy interventions: Legislative approaches should be evidence-based, and avoid disrupting well-functioning markets such as the Internet ecosystem.
  • Reject network fees: The concept of network fees has been widely rejected and should not be pursued further, as it only benefits a select few at the whole ecosystem’s expense.

Conclusion

In conclusion, C4C believes that the European Commission’s White Paper predominantly reflects aspirational goals rather than the current market realities. It presupposes a convergence between computing and connectivity sectors that does not yet exist, and may not align with customer or developer preferences. This approach risks altering the Internet’s inherent structure through regulatory means without genuine market demand.

For detailed insights, see our full submission.