House of Commons - European Scrutiny

Select Committee on European Scrutiny Thirty-First Report

26 i2010 — The European Information Society

(27525)

9707/06

COM(06) 215 + ADD 1

Commission Communication: i2010 — First Annual Report on the European Information Society

Commission Staff Working Paper

Legal base —

Document originated 19 May 2006

Deposited in Parliament 24 May 2006

Department Trade and Industry

Basis of consideration EM of 8 June 2006

Previous Committee Report None; but see HC 34-ii (2005-06), para 1 (13 July 2005)

Discussed in Council 8 June Telecoms Council

Committee's assessment Politically important

Committee's decision Cleared, but further information requested

Background

26.1 At the March 2000 European Council, EU leaders committed themselves to a ten-year programme of economic reform — the Lisbon Strategy — with the objective of making Europe "the most competitive and dynamic knowledge-based economy in the world by 2010". With economic performance in industrialised countries increasingly dependent on levels of investment and use of information and communication technologies (ICT) and the competitiveness of the communications and media sectors, the Commission accordingly proposed the eEurope 2002 and eEurope 2005 programmes, which set objectives for EU ICT policy over a set number of years. But the key message of the March 2005 Lisbon Strategy mid-term review was that, despite important progress in several areas, Europe remained some way behind the Lisbon targets, and had particularly underperformed in the contribution of ICT to productivity and innovation.

26.2 In re-launching the Lisbon strategy as "a partnership for growth and employment", the March 2005 European Council emphasised the need for Europe to "renew the basis of its competitiveness, increase its growth potential and its productivity and strengthen social cohesion, placing the main emphasis on knowledge, innovation and the optimisation of human capital".[82] The European Council said "it is essential to build a fully inclusive information society, based on widespread use of information and communication technologies (ICTs) in public services, SMEs and households. To that end, the i2010 initiative will focus on ICT research and innovation, content industry development, the security of networks and information, as well as convergence and interoperability in order to establish a seamless information area".[83]

26.3 The Commission's new i2010 strategic framework proposed three priorities:

i) completion of a Single European Information Space, promoting an open and competitive internal market;

ii) strengthening innovation and investment in ICT research, to promote growth and employment; and

iii) achieving an "Inclusive European Information Society", promoting sustainability and prioritising better public services and quality of life.

26.4 When we considered it on 13 July 2005, we noted that when, in February 2005, the previous Committee considered the Commission Communication, Challenges for the European Information Society beyond 2005, which paved the way for this one, it concluded that "the trick is to focus hard on where action at European level adds value, and to continue to keep the market and the industry at the heart of the process",[84] our predecessors said that it was still not entirely clear that the Commission had the balance right, and recommended that the document be debated in European Standing Committee, after the discussions that were to take place during the UK Presidency with all the interested parties towards a shared understanding of what needs to be done and by whom at EU and national level, and prior to the December Telecoms Council, so that the Minister could report the outcome of these consultations and the House might have the opportunity to express its views in an area that everyone recognised as crucial to the EU's economic prosperity and social cohesion. That debate took place on 8 November 2005.[85]

The Commission Communication

26.5 The Commission's Communication (together with a Commission staff working paper) provides an update on the progress made in working towards the i2010 objectives and urges policy makers to do more to accelerate developments in the ICT area. It also sets out some of the key areas of work for the Commission under the i2010 Strategy for the years 2006 to 2007.[86]

26.6 The reasons for the Commission's urgings are succinctly put by the Minister of State for Industry and the Regions (Margaret Hodge) in her 8 June Explanatory Memorandum:

"There is clear evidence that information and communication technologies (ICTs) play an absolutely key role in improving the EU's growth, competitiveness and productivity performance. Yet, in the EU we have not been able to reap these wider economic benefits as effectively as some of our competitors. So China is now the largest exporter of ICT goods, the US invests twice as much in ICT research as the EU, and the contribution of ICT to productivity growth in the EU has declined progressively since the mid 1990s."

26.7 The Minister says that the close link between the i2010 Strategy and the Lisbon Strategy has helped ensure that ICT features strongly in the policy response of Member States — through their National Reform Programmes — particularly in the areas of eGovernment, broadband policy, digital literacy and the regulatory framework. However the Commission points out that there are some obvious gaps in other key ICT policy areas, particularly digital convergence, ICT research & innovation and content and spectrum issues, and accordingly urges Member States to develop a stronger sense of urgency and to cover the ICT and i2010 areas fully in future National Reform Programmes. The Minister then helpfully summarises the Report as follows:

THE SINGLE EUROPEAN INFORMATION SPACE

"The i2010 Strategy identifies convergence as a key driver for achieving the Lisbon objectives, particularly the goal of a Single Market. In order to realise the full benefits of convergence, the Communication recognises that a priority under i2010 must be to achieve a consistent regulatory ICT framework which promotes investment and competition whilst also preserving the interests of consumers. The Commission have launched a number of proposals to this end and stress the need to keep these to a strict legislative timetable.

"In the area of electronic communications, the Commission have launched a review of the existing regulatory framework. They are also revising the Television without Frontiers Directive with the aim of creating a technology neutral regulatory sphere in the TV area. They are preparing a roaming regulation to cut the cost of international mobile roaming for consumers.

"Later this year and in 2007, the Commission will present proposals to reform spectrum management in order to open this market to greater competition. The Commission recognise that they need to do more work to address some of the key challenges presented by convergence, particularly in the areas of digital copyright, the online distribution of illegal content and information security and trust. They are therefore also planning a number of Communications to address these issues.

INNOVATION AND INVESTMENT IN RESEARCH

"In 2005, the Commission undertook a number of actions in the ICT research field. In particular, they launched eight ICT European Technology Platforms. They also organised consultations on ICT-related innovation systems and ways to strengthen the links with research, for example through the ICT standardisation work programme. Finally, the Commission adopted the Competitiveness and Innovation Programme which includes an ICT policy support element.

"In the next couple of years, the Commission hope to propose two new joint technology initiatives that will implement strategies under the Technology Platforms. They also plan to issue a Communication on research and innovation and to review the competitiveness of the ICT sector through a cross-stakeholder ICT Task Force. Finally they hope to adopt the work programme for the ICT policy support programme of the Competitiveness and Innovation Programme.

ADOPTION OF ICT

INCLUSION, BETTER PUBLIC SERVICES AND QUALITY OF LIFE

"The Commission have defined the scope of eInclusion policies to cover ageing, accessibility, the digital divide, eGovernment, digital literacy and cultural issues. Last year, and earlier this year, the Commission issued Communications on 'Bridging the Broadband Gap' and on 'eAccessibility'. Later this year, they will be hosting a Ministerial Conference on eInclusion. Over the next 18 months, the Commission plan to prepare a Ministerial Declaration on eInclusion, follow up on the commitments of the eAccessibility Communication and help foster best practice exchange on broadband. They will also do more work on digital literacy through an eLearning conference and a Communication on ICT for education and training.

"The use of ICT in public services can help meet the goals of the Lisbon Strategy by making public finances sustainable and by simplifying administrative procedures. The Ministerial Declaration on eGovernment, which was adopted in November last year, sets EU priorities for ICT-enabled public services, and the eGovernment Action Plan, adopted earlier this year, sets targets for eGovernment by 2010. The Commission are also continuing work on eHealth, and will prepare a Recommendation on eHealth interoperability. They adopted an eHealth Action Plan a few years ago and will be doing further work in this area over the next year. Finally, the Commission will be preparing a number of large-scale pilot projects to develop public services online focusing on the areas of identity management, interoperability and security.

"Under the i2010 umbrella, the Commission have launched ICT flagship initiatives to address the key social challenges of the ageing society, safe and clean transport and cultural diversity. In 2005, the Commission launched initiatives on digital libraries and intelligent cars, and this year they will develop a Recommendation on digitisation and digital preservation. They will also develop their work on digital libraries by producing a Communication on digital libraries for scientific information and by hosting a High Level Group on this issue. The Commission also propose to launch their initiative on ICT for independent living in an ageing society later this year. Finally, in 2007, they will propose a fourth flagship for 2007, which will look at the potential of ICT for sustainable growth.

CONCLUSION

"The Commission conclude their Communication by highlighting that the challenges identified in the i2010 Strategy need to be addressed more vigorously if we are to catch up with our major global competitors. In particular, they stress the need for urgency in developing National Reform Programmes which have a strong ICT element. They also want to see greater partnership between the Commission, Member States and stakeholders in the delivery of the i2010 Strategy. Finally, they stress the need to move from policy to action by implementing regulations and policies that enable competitiveness."

The Government's view

26.8 The Minister says that the views raised in the Communication, particularly in respect of the progress that still needs to be made in realising the economic and social benefits of ICTs, and the need to highlight the role of ICTs in national policy documents, such as the National Reform Programme, are consistent with her own thoughts, which is why "in the DTI, we made the i2010 Strategy a priority of our UK Presidency at the end of last year, and why ICTs were an important element of our 2005 National Reform Programme". She continues as follows:

"During the course of this year, we have been leading initiatives to further strengthen information on, and understanding of, the key role that ICT plays in delivering wider growth and employment objectives. We, like the Commission, continue to remain concerned about the imbalance that exists between the potential contribution of ICT to our Lisbon objectives, compared to its actual contribution. Within the EU, we have been at the forefront of senior official level discussions taking place under the i2010 umbrella on the key issue of the link between ICT and productivity. Nationally, we hope to launch later this year a joint Government/Industry paper on this issue which is provisionally called 'Accelerating UK productivity growth through ICT'.

"In the area of the Single European Information Space, our focus has been on the two key Commission legislative proposals i.e. the eCommunications Regulatory Framework and the review of the Television without Frontiers Directives. These are both being dealt with under a separate scrutiny process, but our priority in both is to ensure that any regulatory intervention promotes, and does not hinder, the development of open and competitive ICT markets. We are also working closely with the Commission in developing their proposals for the regulation of roaming. Our aim here will be to ensure that the regulation brings improved competition and lower prices for consumers in the EU without having any un-intended consequences. We will work with the Commission to achieve their stated aim of promoting the efficient management of spectrum, which is also a priority in the UK. Finally, we will look closely at policy proposals, including Communications, in the areas of security and trust, content and digital rights management. These will no doubt be the subject of separate EMs in due course.

"The Commission's work in the area of Innovation and Investment in Research is less formalised than in the Single European Information Space. Nevertheless, we support the work that the Commission has been doing to analyse the competitiveness of the ICT sector and look forward to hearing the conclusions of the ICT Taskforce in early Autumn. We also plan to be involved in discussions on the work programme for the ICT policy support programme, to ensure that it meets the wider objectives of the Competitiveness and Innovation Programme which has been the subject of a separate EM (8081/05 + ADD1). Finally, we will look closely at the Commission's planned Communication on research and innovation in ICT and will work with them to identify the priority areas for joint technology initiatives.

"We recognise the keen interest that there exists across the EU on the potential of Radio Frequency Identification (RFID) technology. In the UK's view, this is a new and innovative technology that can bring significant benefits to business and consumers, not only in terms of the technology itself, but also in the way that it can help transform services. We look forward to working closely with the Commission over the next year or so on this important issue. We expect the planned Communication on RFID to be the subject of a separate EM in due course.

"eInclusion issues (including eAccessibility) have been of key interest to the DTI over the last year, and we agreed Council Conclusions on eAccessibility during our Presidency of the EU. We are actively involved in the preparation of the Ministerial Inclusion Conference and we plan to work closely with the Commission over the next few years as they prepare their Inclusion Strategy. eGovernment and eHealth issues fall under the competency of the Cabinet Office and the Department of Health respectively. However, we are working closely with these two departments and devolved administrations to ensure that specific policies in these areas reflect the wider i2010 Strategy priorities. We look forward to discussing in more detail the Commission's ICT flagship initiatives, notably at the forthcoming i2010 Conference which is being hosted by the Finnish Presidency."

CONSULTATIONS

26.9 The Minister says that although there has been no consultation on this Communication, the Commission conducted a public and open consultation in late 2004 inviting Member State governments and stakeholders to present their views on the development of the EU's information society strategy. She says that the DTI has also launched an i2010 Stakeholder group to discuss key policy issues related to the i2010 Strategy, which will include a discussion of this Communication and its Annexes. She also says that both the Commission and the DTI "have launched, and will continue to do so, consultation exercises for specific policy streams of the i2010 Strategy such as the review of the electronic communications framework and the revision of the Television without Frontiers Directive".

Conclusion

26.10 It is sobering that, so long after the launch of the Lisbon Agenda, the Minister's words are all too familiar: China the largest exporter of ICT goods, the US investing twice as much in ICT research as the EU, and the contribution of ICT to productivity growth in the EU having declined progressively since the mid 1990s. What must be avoided is Commission proposals that, no matter how well-intentioned, make matters worse. We therefore endorse what the Minister has to say in connection with the upcoming reviews of the eCommunications Regulatory Framework[89] and the Television without Frontiers Directives[90] — that any regulatory intervention promotes, and does not hinder, the development of open and competitive ICT markets — and that Commission proposals for the regulation of roaming bring improved competition and lower prices for EU consumers without any un-intended consequences. Any proposals on RFID, the efficient management of spectrum, security and trust, content and digital rights management should likewise focus on how to help the market turn innovation and enterprise into growth, jobs and better and cheaper products. We shall examine any such proposals accordingly.

26.11 The Minister says that this Communication was presented to the Telecoms Council on 8 June. We presume that no Conclusions were adopted; but if they were, we should be grateful to be told what they were. Looking ahead, we should grateful if she would let us know what is discussed at the forthcoming i2010 Conference under the Finnish Presidency and what conclusions are adopted then.

26.12 In the meantime, we clear the document.

82 Presidency Conclusions - Brussels, 22 and 23 March 2005, para 5. Back

83 ibid, para 18. Back

84 (26168) 15177/04; see HC 38-vii (2004-05), para 5 (2 February 2005). Back

85 Stg Co Deb, European Standing Committee, 8 November 2005, Cols 3-22. Back

86 Full information on the EU's Information Society policies is available at http://europa.eu.int/information_society/policy/index_en.htm. Back

87 More information is available at http://ec.europa.eu/invest-in-research/action/2006_ahogroup_en.htm. Back

88 Radio Frequency Identification (RFID) is an automatic identification method, relying on storing and remotely retrieving data using devices called RFID tags or transponders. An RFID tag is a small object that can be attached to or incorporated into a product, animal, or person. RFID tags contain silicon chips and antennas to enable them to receive and respond to radio-frequency queries from an RFID transceiver. Passive tags require no internal power source, whereas active tags require a power source. Back

89 More information available at http://europa.eu.int/information_society/policy/ecomm/index_en.htm. Back

90 The Television Without Frontiers Directive promotes the European broadcasting industry by ensuring the free movement of television broadcasting services throughout the EU. More information is available at http://europa.eu.int/information_society/newsroom/cf/itemlongdetail.cfm?item_id=2343. Back