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Interview: Günther Oettinger

Aiming for a Digital Union

As the European Commissioner for Digital Economy Society, Günther Oettinger is responsible for IoT in Europe. At CeBIT in Hanover, we sat down with him to discuss the digital future.

 European Commissioner for Digital Economy Society, Günther Oettinger

Given the dominance of U.S. companies, how can Europe hope to play a major role in shaping the digital future?
If you look at the major areas of digital innovation – the U.S., South Korea, China, Japan – you can’t help but notice that Europe remains in the forefront in many areas of hardware and software. I strongly believe that Europe will continue to have a major influence on industry and society. Europe, after all, isn‘t just a union for peace and common values; with 28 member states and 510 million consumers, as well as associates in Switzerland, Norway and the Western Balkans, Europe constitutes the largest market in the world.

But unlike the U.S., Europe consists of a hodgepodge of national markets with very different laws and cultures.
YYou’re right: whereas Europe has common markets for things like cars and industrial products, we lack a common domestic digital market. Our standards, rules and regulations, indeed most of our infrastructures are national. A startup entrepreneur wanting to develop a new digital app in London or Berlin needs 28 attorneys to tell him how to implement 28 different data protection acts. He’ll prefer to go to America. The Americans have a huge domestic digital market of 330 million consumers; they possess common standards, a single data protection law and a shared network strategy. That’s why the European Commission and the European Parliament are so keen on creating a common European digital marketplace.

But the EU only has limited power compared to the United States?
Europe doesn’t need to do everything, but there’s simply no sense in pursuing 28 separate digital strategies. In 2015, the Commission, the Parliament and the Council of Europe agreed on common European privacy regulations. The Network Information Security Directive laid a common groundwork for cybersecurity in critical infrastructures such as energy grids, traffic control centers and financial institutions. These are important milestones on our way towards becoming a true digital union.

With 28 member states and 510 million consumers, as well as associates in Switzerland, Norway and the Western Balkans, Europe constitutes the largest digitalmarket in the world.

What do you think will be most important?
Investment in digital infrastructure will be the key. Connectivity and powerful networks should be an argument in favor of Europe, not against Europe. But first we need to define what goals we will have to meet by 2025 in terms of bandwidth and connectivity. Three megabytes isn’t enough; we will need 30 or 50 MBps in order to meet the future demands of industry and society. Europe needs a gigabyte infrastructure! If you add up everything – uploads and downloads, streaming services, social media, connected cars, eHealth, eLearning, eGovernment, smart factories, M2M – the demand for bandwidth will be many times greater than even our greatest experts expect today. Milliseconds in latency will make the difference between winners and losers.

But digital infrastructure has to compete with traditional infrastructure for public money.
Investments in cross-border digital infrastructure are much more important than rails and roads. We need it all: satellites, cable, twisted pair, vectoring, fibreoptics to the factory and to the home, and of course 5G. The European Commission has set aside 700 million Euros for 5G infrastructure, and we have established a private-public partnership, called “5G PPP”, which will spend an additional 3.5 billion Euros to provide 1000 times higher wireless area capacity and more varied service capabilities, saving up to 90 percent of energy per service provided and in the process creating a secure, reliable and dependable Internet with a “zero perceived” downtime for services provision. The goal is to secure Europe’s leadership in the particular areas where Europe is strong or where there is potential for creating new markets such as smart cities, ehealth, intelligent transport, education or entertainment & media.

But that still doesn’t solve the problem of national networks, each pursuing its own agenda.
We are currently reviewing the Telecommunications Act 2001 with the intent of getting the member states to agree on a common spectrum policy for all of Europe. 28 frequency auctions without any coordination will seriously limit the success of 5G and hamper future communications. If you drive from, say, Hanover to Florence, everybody uses the same currency, nobody asks you for your passport or for you to open the trunk of your car. But every time you cross a national border you know it because, for about five minutes, you are in a dead zone without any connectivity at all. We aren’t talking deepest Africa here: this is hi-tech Europe in the 21st century! National borders may still be relevant for things like culture, language, internal security, and economic development, but for digital technology they are completely out of date; many of them hail from the times of Napoleon and the Congress of Vienna. But Napoleon knew very little about digital communication, I believe.

In reality, aren’t there are still plenty of borders in cyberspace?
Of course, and we need to tear them down. For instance we need to address the issue of geo-blocking and other discrimination based on consumers‘ place of residence or nationality. Imagine: You buy a case of wine in Bordeaux and you expect to be able to drink it in your home in Stuttgart. For analog goods and commodities we have been used to enjoying the benefits of common domestic markets for decades. But try to buy the same case of Bordeaux online, and chances are you will be redirected to an online shop in Hamburg or Bremen. As a digital consumer, you do not enjoy the freedom of choice you have come to expect from the European common market. That needs to change! Before the year is out the Commission will submit suggestions for rules and regulations for member states to enact that will eliminate unjustified geoblocking.

But some business models in Europe rely on territoriality. What about the film industry? What about sports broadcasts?
Our goal is to create a common digital market, but of course we need to consider exceptions. Exceptions are a necessary complement to fundamental principles, for instance when it comes to preserving the European film industry.

What about innovation? It seems that Europe lags far behind the United States when it comes to research and development.
Digital R&D are a major focus for the Commission, and the European Parliament is assisting us greatly through initiatives like “Horizon 2020” with nearly €80 billion of funding available over seven years. There are areas where Europe actually has a head start, for instance in robotics. But “R” could be an important letter for Alphabet, too. The Americans are hot on our heels and are pouring billions into automation and autonomous machines, so we need to keep up our momentum. But Europe also enjoys a leading position in fields like photonics and sensors, and we intend to keep it that way.

Just how amicable are your relations with the Americans?
We recently managed to renegotiate Safe Harbor following the decision by the European Court which imposed a new set of strong obligations for companies’ handling of EU citizens’ data and offering clear safeguards and transparency requirements for U.S. government agency access to those data. The new agreement is called “Privacy Shield”, and we hope to ensure that it is passed into law before the end of this year. Without such an agreement, thousands of companies of all types and sizes – in both Europe and the United States – would face widespread uncertainty and serious impacts to their operations and their ability to conduct business across the Atlantic. It is especially important for SMEs to be sure that European privacy and data protection standards are being followed in the Cloud, namely in data centers operating in the U.S. Here, again, Europe needs to take the lead. It doesn’t make any sense to negotiate 28 separate data protection deals. We intend to reach similar agreements with other countries outside of Europe in order to reduce bureaucracy and increase legal security for companies and citizens all over Europe and the rest of the world.

The automobile industry is facing big changes as we enter the era of autonomous trucks and self-driving cars. What is the EU doing to make this happen?
At last year’s IAA in Frankfurt we started an intensive dialogue with car makers aimed at creating guidelines for the Mobile Future. And this year, we sat down with the telco industry at Mobile World in Barcelona to ensure that they cooperate in creating the necessary networks and equipment. If driverless vehicles are to become a reality we need both the automotive and the telecommunications industries to work closely together. Mercedes’ new E Class shows where new developments are heading, but it will require a completely new and seamless digital infrastructure if these innovations are to translate into a new driving experience for millions of automobile owners across Europe. For this reason we have challenged other companies as well to join us in establishing a framework for autonomous driving; the insurance industry, for instance. There are loads of ethical and legal issues we need to tackle; no trivial task. After all, cars are full of sensors nowadays, and they are constantly creating, transmitting and storing data not only about the car itself, but increasingly about such things as weather and traffic conditions, proximity data to other cars, as well as road conditions. Which begs the question: Whose data are these, anyway? Do we need to step in and regulate? Or will car manufacturers and car owners negotiate their own set of deals? And how level is the playing field between the two?

Do we need to step in and regulate? Or will car manufacturers and car owners negotiate their own set of deals? And how level is the playing field between the two? Do you believe that we need to set out European rules and regulations governing data ownership and data usage instead of leaving these crucial questions for the market to work out?
market to work out? What we definitely need is a common European answer to these questions. In fact, what we really need is a European Civic Code, similar to the German BGB which contains property laws, laws of obligations, rights of ownership, usage and indemnification. We are just starting to have a real debate about how all of these apply to a digital economy, but we need to set up a common legal system that will take into account the fundamental changes happening today in terms of our everyday lives, in trade and industry and in mobility.

What about cybersecurity?
The Commission has the ambition to ensure the highest possible degree of security for both hardware and software. We want “IT Security made in Europe” to become an international label of quality. Of course there’s no such thing as complete security, but we believe we can organize efforts in order to ensure that citizens and enterprises get as much security as possible. For critical infrastructures such as energy grids, traffic control centers, financial institutions and data centers, we already have a regulatory framework in place to ensure that they are reasonably safe from terrorist attacks and hackers. But we need to do more. I don’t believe that all the stakeholders are fully aware of the threats posed by smartphones or other digitally connected devices. In areas such as occupational safety or workplace security, people are very aware of the risks involved, and companies are heavily invested in appropriate systems and precautions. A robot from Kuka stops dead in its tracks if a human gets too close; an industrial press by Schuler freezes the minute an operator sticks his arm in the machine. The same goes for traffic safety: everyone is aware of the problem, and lots of time, effort and money has been invested over the years in making cars safer. It used to be neck supports and safety belts, now it’s distance sensors and dynamic stability control. As car owners, we invest a lot in safety and security; unfortunately, the same doesn’t go for cybersecurity.

“IT Security made in Europe” should become an international label of quality.

In areas such as occupational safety or workplace security, people are very aware of the risks involved, and companies are heavily invested in appropriate systems and precautions. A robot from Kuka stops dead in its tracks if a human gets too close; an industrial press by Schuler freezes the minute an operator sticks his arm in the machine. The same goes for traffic safety: everyone is aware of the problem, and lots of time, effort and money has been invested over the years in making cars safer. It used to be neck supports and safety belts, now it’s distance sensors and dynamic stability control. As car owners, we invest a lot in safety and security; unfortunately, the same doesn’t go for cybersecurity.

What comes next?
I don’t say we have all the pieces in place yet. But we try to achieve as much transparency as possible. That’s why we invite all the players to join us in an ongoing dialog, from tiny startups to large corporations, from individual citizens to local, state and national governments. We all must do our part in creating a new Digital Europe that can coexist and compete peacefully with our partners in the U.S., in China, in South Korea, Japan and elsewhere. What we need most right now is expertise, creativity and investment in our common future.

 

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