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1 63((&+ 0U(UNNL/LLNDQHQ Member of the European Commission, responsible for Enterprise and the Information Society &RQYHUJHQFH DQG WKH,QIRUPDWLRQ 6RFLHW\ Conference on Media Convergence: Opportunities for a closer relationship between Europe and the Americas 0DGULG0D\
2 ,QWURGXFWLRQ&RQYHUJHQFHLQWKHFRQWH[WRI(8/$&UHODWLRQV I would like to start by thanking Telefonica and the Spanish Government, in its capacity of current Presidency of the European Union, for their initiative of convening this conference in the context of strengthening the relations between Europe and the Americas. Indeed, I strongly believe that Convergence provides an opportunity not only to accelerate and consolidate the development of an open and inclusive Global Information Society, but also to establish a long-term partnership between our regions to build such an Information Society. I would like to highlight in this context the successful meeting on Information Society that we held in Seville a couple of weeks ago between ministers and high-level representatives of regulators, the private sector and the civil society from the European Union, Latin America and the Caribbean. At that meeting the Programme was formally is a Cooperation Programme co-financed by the European Union, which aims at establishing dialogue and co-operation with the Latin American and Caribbean region on the Information Society. It aims at policy and regulatory will also promote the development of several innovative take-up projects for citizens in priority areas, such as egovernment, elearning, ehealth and einclusion. This ministerial meeting approved a Statement that will be presented to the Summit of the European Union and Latin America and the Caribbean, which will be held later this week here in Madrid. This Statement notably recognises the potential of new information and communication technologies, such as mobile communications and digital television - and others which could result from the on-going technological convergence process, to provide widespread access to the Information Society applications and services. 7KHEURDGHUSHUVSHFWLYHRI&RQYHUJHQFH As confirmed by the Seville ministerial meeting, convergence is indeed at the very heart of Information Society developments. It is a phenomenon with multiple dimensions, technological but also economic, social, political, etc. As such, it is an essential phenomenon, underpinning the policy and regulatory work of the European Union in this area. Technological developments associated with digitisation of information make it possible to dissociate specific communication networks from specific types of information: voice, data, images, etc. All of them can be increasingly transported through all networks and accessed from a variety of terminals. This stimulates stimulates market competition and innovation. These technology and market developments also have a great potential for social convergence and collective welfare, in that they remove barriers to communication and facilitate widespread access to information. 2
3 In short, the convergence phenomenon has implications that go well beyond information technology: it is transforming society, this is, the way companies operate, individuals behave and interact with each other and so on. We all have been hearing from the media for some years now this vision on Convergence and the Information Society. But it is necessary to take some distance and differentiate realities from hype. In particular, there is the danger that many people and regions of the world remain excluded from the Information Society that is emerging, so that social and regional gaps widen rather than the opposite. I am referring of course to the often-mentioned risk of digital divide. Indeed, with deep socio-economic transformations there are always potential benefits and drawbacks. In this context, there is a role for public authorities to maximise the former and minimise the latter. Public authorities should take the distance necessary to make objective analysis. They must establish clear political priorities and policies in pursuit of long term general interest goals, which should remain relatively unaffected by short-term market fluctuations. Of course, this should be done in a way that is compatible with the objective of attracting the necessary investments from the private sector. I would like now to provide some views on convergence, both in technological terms and in respect of the regulatory and policy response. :KDWGRHVFRQYHUJHQFHDFWXDOO\PHDQ" Internet access today most often means connecting a PC to a narrow-band dial-up phone line or a high-speed ADSL or cable connection. We now see at least two additional platforms or types of terminals becoming a reality. One is the digital television, the other the mobile terminal. Europe has adopted DVB as the digital television standard. The digital TV signal can be transmitted via terrestrial antennas, the cable or satellites. DVB can do more than just one-to-many broadcast television. It can also act in multi-cast mode, that is, from one sender to a selected number of receivers, be they fixed at home or on the move in a car or a fast train. As anything digital can be sent, it does not matter if the digital video information is accompanied by data such as program guides or Internet pages. The distribution of data and video using broadcast technology is called datacasting. DVB is at its best when it delivers large quantities of the same information to a large audience. The standard in Europe for the third generation mobile communications is UMTS. 3G fits most naturally with personalised mobile two-way voice and data communication at fairly high speeds. It can even support video clips. But providing the same multimedia information to a large number of users could absorb all capacity in the network. 3
4 These three platforms, PC, digital TV, and mobile terminal, will probably more often be complements than substitutes. The supporting networks, that is, terrestrial, mobile, satellite, copper, fibre, as well as fixed wireless, will at times be competing, but ever so often they will be complementary. What does convergence then actually mean? One view on convergence is that it de-couples content from networks. In other words, the same content can be delivered over any network. In practice this form of convergence will hold for only a limited set of applications. Why? Because customers and the terminals they choose to use are so different that they make a different presentation or packaging of the same content a necessity. For example, a TV normally has a lower resolution than a PC. An egovernment application therefore will look different on an interactive TV than on a PC. And the screen of a mobile terminal or a Personal Digital Assistant being of course much smaller will generally require an adaptation of the content to the capabilities of the screen. The second way to look at convergence is to ensure coherence of content across platforms and networks. This is about consistent use of the underlying information even with quite different applications across devices. Managing your financial portfolio on the PC will be quite different from placing a real-time stock order from your mobile. But in both cases it is still concerning the same you and your portfolio. The third way to look at convergence is to make joint use of the technologies for unique value-added that each technology on its own cannot provide in a satisfactory manner. An example is DVB with a UMTS return path. Your UMTS phone would in such a case contain a DVB receiver as well. And conversely one could also imagine a digital TV with a UMTS chip-set built in. Broadcast or multicast can then be combined with one-to-one communication. No doubt entrepreneurs will find several applications to exploit these new possibilities, for instance a sports event with personalised interactivity. Clearly the world of convergence technologies is not about the same everywhere. Instead it may be better to speak of convergence in diversity. :K\LVDFRKHUHQWDSSURDFKRILPSRUWDQFH" We need a coherent approach to this emerging world of convergence in diversity. The choice was made by the Heads of State and Government of the European Union meeting in Barcelona in March. Next to the call for an eeurope 2005 Action Plan, about which I will say later more, the Barcelona Summit stated that it: ³FDOOV XSRQ WKH &RPPLVVLRQ DQG WKH 0HPEHU 6WDWHV WR IRVWHU WKH XVH RI RSHQ SODWIRUPV WR SURYLGH IUHHGRP RI FKRLFH WR FLWL]HQV IRU DFFHVV WR DSSOLFDWLRQV DQG VHUYLFHVRIWKH,QIRUPDWLRQ6RFLHW\QRWDEO\WKURXJKGLJLWDOWHOHYLVLRQ*PRELOHDQG RWKHUSODWIRUPVWKDWWHFKQRORJLFDOFRQYHUJHQFHPD\SURYLGHLQWKHIXWXUH The reasons for such a coherent approach are threefold. Firstly, this is a basis for future economic growth. It invites innovation. Many new products and services will result. If we do it right we will have a thriving digital content industry, world-class billing software, give a boost to the mobile and consumer devices industry, etc. Technological leadership will translate into economic benefits. 4
5 Broadcasters, telecoms operators, content providers, and intermediaries will have a wealth of opportunities to increase revenue per customer but probably also more competition. With today s business models we are only at the beginning. Many more business models can be tried out. Public interest applications such as egovernment, ehealth and elearning can provide an additional incentive for citizens to use the new converged technologies, contributing to the viability of the new business models. But ultimately the market will decide. Secondly, convergence technologies provide the basis for enhanced productivity. This comes from anytime, anywhere access to consistent information. Even better if this is delivered at broadband speeds through any of the available networks. Think of settings such as mobile maintenance, remote health delivery, or elearning combining home and school. Thirdly, and most importantly, with a wider choice of platforms and networks, we will much increase inclusion. There is far less reason for anyone to be excluded on the grounds of geography, skills, or capabilities. This has also been recognised by the EU Heads of State and Government at their meeting in Barcelona. They emphasised the potential of new ICTs, such as third generation mobile communications and digital television, as well as their convergence, to provide widespread access to the Information Society applications and services. In addition there is one more argument to mention here, which is efficiency of the use of scarce resources. In particular this concerns spectrum. Digital broadcasting technology is essentially more efficient in spectrum use than analogue. This means that we can free up scarce frequencies. :KRLVWKHQLQYROYHG" Clearly the choices made for convergence technologies are closely related to how we envisage the economy and society to develop. This is about choosing the infrastructure that underpins in the years to come our work, education, health, culture, and indeed democracy. These choices require broad involvement and debate in technology and industry forums the political world and civil society. Moreover, with the opening of new opportunities there will be room for new actors. Entrepreneurship is closely linked to convergence as we envisage it. Local initiatives that exploit cultural diversity should be able to flourish. New partnerships will be needed. In the content value chain there will be new roles such as advertising aggregators and data caching providers. There will be new relationships such as between broadcasters, logistics companies, and billing companies. The European Union is helping fostering these partnerships, not only among European partners, but also with non-european partners. This is the case notably through the EU research & development IST programme, which is open to participation of non-european organisations. Latin American organisations are specifically targeted by the Programme that I mentioned before. 5
6 :KDWDUHWKHUHJXODWRU\SROLF\FKDOOHQJHV" The basis for dealing with the rich diversity of convergent network technologies has already been laid and is sound. The new European Union regulatory framework for electronic communications, adopted in March this year, is based on separate regulation of content and infrastructure. It does not regulate content, but only the communication services and their underlying networks and associated facilities. The package also seeks to apply the principle of technology-neutrality, dealing with communication services independently of the network technology used to deliver them. The package is now being transposed by EU Member States and will need to be pursued in its day-to-day implementation. National regulatory authorities have a key role within a system of checks and balances. Regulators will have to consult each other and the European Commission in order to ensure that the flexibility they have at national level does not re-fragment the Internal Market. The Commission has powers to intervene otherwise. The communications package also foresees that associated facilities that act as gateways such as conditional access can be regulated, to ensure fair, reasonable and non-discriminatory access. It might be that in due time new such gateways emerge for which the applicability of the regulatory framework will have to be assessed. While content is not being regulated by the new telecoms regulatory framework, there is EU legislation of various kinds applicable to content. Examples are the Electronic Commerce Directive and the Television Without Frontiers Directive. In terms of future challenges, we will need to deal with digital rights management (DRM). DRM systems are sometimes argued to be essential to let digital content delivery take off. In particular this would hold for broadband. This holds even more so if we consider convergence. For example, in the future digital films could be delivered on open platforms such as PCs equipped with a DVB receiver. Many copyright holders would like to see strong technological and legal protection. The challenge will be to to achieve the right balance between attractive business models, protection for rightsholders and users rights to enjoy content. Finally, broadband, 3G, and digital TV also require physical facilities such as ducts, masts, etc. Local rules play a role here. Exchange of practice at local level has been suggested to be part of the eeurope 2005 initiative with a view to increasing investor confidence. 2SHQ 3ODWIRUPV DV WRROV IRU VWLPXODWLQJ /RFDO &RQWHQW DQG &RPSHWLWLRQ An important element to contribute to the achievement of an inclusive and democratic Information Society is the availability and use of open and interoperable platforms. Open and interoperable platforms will stimulate the production of local content, by reducing the cost and inconvenience of re-authoring content for different platforms. 6
7 Equipment manufacturers, service providers and network operators will benefit because they will gain access to larger markets, given the interoperability and economies of scale provided by these platforms. And consumers will benefit from freedom of choice and increased competition on services and equipments. These benefits are more significant when these platforms are based on international technical standards. In the European Union, the Multimedia Home Platform (MHP), developed by the DVB Consortium, is being actively promoted as an open and interoperable platform. The aim is to encourage the voluntary adoption of MHP by the market, with a view to achieving an horizontal market for interactive digital television services. If the Commission assesses that interoperability of services and freedom of choice for users have not been adequately achieved in the Member States, it can propose making implementation of relevant European standards mandatory a year after the entry into force of the new communications package. Like other DVB standards, one can expect MHP to become a global standard. In this regard, we note with interest its recent adoption by the US OpenCable consortium. Openness and interoperability are guiding principles that fit well with the technologyneutral approach of the EU communications regulatory framework. Open and interoperable platforms serve to fully realise the potential of convergence. 7KHH(XURSH$FWLRQ3ODQ The key instrument for accelerating the development of an Information Society for all has been the eeurope 2002 Action Plan, adopted by the EU leaders at the European Council in Lisbon held in March The overall objective of eeurope 2002 is to bring Europe online as fast as possible. In pursuing this objective the Action Plan has targeted three areas: - cheaper, faster and secure Internet - investing in people and skills - stimulating the use of the Internet Since the launching of the plan, decision-making on telecommunications and e- commerce regulation has been accelerated, benchmark indicators have been introduced, and above all, the Internet is now on top of the political agenda in all EU member states. The next step is now to be taken with eeurope The focus will be the user and usage of the Internet. The objective is a widespread, more profound and inclusive use of the Internet to raise productivity in the private and public sector. This is key to realising both our economic and social agenda. The Heads of State and Government of the European Union in their meeting in Barcelona of last March called on the Commission to draw up a comprehensive eeurope 2005 Action Plan. Emphasis will be on: - Reinforcing the pillars of an Information Society for all: elearning, ehealth, egovernment, and ebusiness; and - Ensuring the rollout of key technological enablers, such as secure broadband networks and the next Internet Protocol. 7
8 3RWHQWLDORI'LJLWDO7HOHYLVLRQWREULGJHWKH'LJLWDO'LYLGH Before concluding, I would like to again emphasise the role that digital television can play to provide widespread access to the Information Society applications and services, and therefore contribute to the objective of bridging the digital divide. Indeed, most of the households are already equipped with at least a TV set. This is also true in the Latin American and Caribbean region, where the average TV penetration is around 27 TV sets per 100 inhabitants, leading to a over 80% penetration of households. In contrast, no more than 8 in 100 inhabitants own a PC in that region. Most citizens watch TV, and therefore they would be able to engage more easily in using the Information Society applications and services, including egovernment, elearning and ehealth applications through that terminal. Moreover, this could be achieved at a lower cost for consumers, given that digital television can be received by connecting to the existing TV sets a set-top box that can be cheaper than a PC. Important decisions are expected to be taken in the Latin American and Caribbean region in the coming months regarding the technical standards for digital terrestrial television. These decisions will have very fundamental implications for the future development of the Information Society in that region, and also for the full participation of that region in the Global Information Society, given the role of digital terrestrial television as a building block of the Information Society. The European Union is therefore committed to support the introduction of digital terrestrial television in the Latin American and Caribbean region. We are ready to share our experience of introducing this important technology in our region, and to work together with a view to fostering the use of digital television as an important means to provide widespread access by our citizens to the Information Society applications and services. We are also ready to share the developments of convergence as it unfolds in Europe, be they from a technological, service or regulatory perspective. &RQFOXVLRQ In conclusion, I would like to reaffirm that convergence certainly offers many opportunities for the Information Society, contributing to economic development and social welfare in the general interest of citizens, companies and regions. In particular, new digital technologies can foster open technologies and markets, information plurality, freedom of choice, social inclusion, etc. Public authorities can play in this an important role, as I mentioned before. In the first place, to ensure that technological and business initiative can deploy its full potential under the fair market conditions and legal certainty that investments require. Indeed, the Information Society is driven in the first place by market forces and it must be ensured that they are stimulated by their environment. Secondly, public action is necessary where the market cannot sufficiently deliver, or not at all, in achieving certain general interest objectives, such as avoiding social exclusion, as well as making available public services, such as egovernment, elearning, ehealth, etc. 8
9 At the end of the day, digital convergence, new technologies, should be a means to an end, an engine for social and economic growth. To use the motto of the H (XURSH Action Plan, they must contribute towards an Information Society for all, that is, an inclusive and democratic society. In building such a democratic and inclusive Information Society it is very important to stimulate international co-operation and share experiences between different regions of the world. As I mentioned at the beginning, Latin America and the Caribbean have already engaged in this route with the European Union. I sincerely hope all this work we accomplish together in the area of information and communication technologies will be instrumental in building more prosperous and fair societies on both sides of the Atlantic. 9
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