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Digital

Is the future of 6GHz hybrid?

Although both mobile operators and the Wi-Fi industry declared victories following the World Radiocommunication Conference (WRC-23) in Dubai last December, the agreement allows for both licensed and unlicensed operations in the 6GHz band. This differs from the two most prominent schools of spectrum, American and Chinese, where the 6GHz spectrum is predominantly allocated to Wi-Fi services or 5G. However, it aligns with the European strategy of facilitating coexistence between International Mobile Telecommunications (IMT) and Wi-Fi technologies.

Among the countries that have delicensed both the upper and lower 6GHz bands are the United States, Canada, Brazil, Saudi Arabia, and South Korea. The other group, which includes the European Union, the United Kingdom, and many others has delicenced only the lower 6GHz band. Conversely, China allocated a significant portion of its 6GHz spectrum to 5G in 2023, positioning itself at the forefront of enabling 5G (and, eventually, 6G) technology.

The EU considers the allocation of the 6GHz band crucial for boosting 5G deployment and aims for a hybrid solution where Wi-Fi and International Mobile Telecommunications (IMT) can coexist. Final decisions are expected by 2026, with Europe likely providing early insights into the technical feasibility of this coexistence.

Proponents of delicensing the 6GHz band argue that it enables the use of spectrum bands more flexibly, without the constraints of specific services. They emphasize the preference for Wi-Fi over 5G in home internet settings and suggest that delicensing Wi-Fi could lower internet costs in remote areas, as Wi-Fi 6 and Wi-Fi 6E use existing, therefore less expensive technology. Additionally, they point to Wi-Fi 6E’s capacity for speeds up to 9.6 Gbps, three times faster than current standards, and its superior performance in crowded settings. Moreover, Wi-Fi 6E is noted for its energy efficiency (attributed to built-in power-saving features) and adaptability to challenging geographical landscapes.

Proponents of allocating the 6GHz spectrum to International Mobile Telecommunications (IMT) and specifically to 5G highlight different benefits. They stress that such an allocation would significantly increase bandwidth and capacity, leading to improved quality of service. 5G, designed to deliver speeds up to 10 Gbps, would benefit from the 6GHz with reduced latency, which is crucial for applications that require real-time responsiveness, such as autonomous driving and telemedicine. Additionally, 5G supports up to a million connected devices per square kilometer, an essential feature for the Internet of Things (IoT) ecosystem.

Both technologies have specific uses: Wi-Fi 6 E is ideal for smart homes, virtual reality, and large-scale events, while 5G excels in autonomous vehicles, telemedicine, and industrial Internet of Things applications. Each has its competitive advantages. 5G typically covers a more comprehensive geographical range than Wi-Fi 6E and can be used both indoors and outdoors. 5G offers slightly faster speeds, whereas Wi-Fi 6E requires less investment in infrastructure.

As governments worldwide ponder the future of the 6GHz spectrum and experts question the benefits versus the costs, many political questions need to be addressed.

Providing affordable connectivity in remote areas is a complex challenge, and there are no clear answers to the best solution. In the past, smaller and geographically flatter countries have found straightforward solutions for mobile connectivity, such as state investment in backbone infrastructure and facilitating last-mile access for commercial use. Larger countries with complex topography face challenges on an entirely different scale, especially in developing markets.

Originally published here

Will The EU AI Act Spark Innovation, or Put The Brakes on Progress?

The Consumer Choice Center are wondering if the EU’s recent AI Act will actually encourage innovation, or put the brakes on it. Given the crossover in compliance between the UK FCA regs and EU legislation this stuff matters, as it’s hard for start-ups to effectively go it alone on AI compliance. Here’s the word;

On February 2, the European Union’s ambassadors green lit the Artificial Intelligence Act (AI Act). Next week, the Internal Market and Civil Liberties committees will decide its fate, while the European Parliament is expected to cast their vote in plenary session either in March or April.

The European Commission addressed a plethora of criticism on the AI Act’s potential to stifle innovation in the EU by presenting an AI Innovation package for startups and SMEs. It includes EU’s investment in supercomputers, statements on Horizon Europe and Digital Europe programs investing up to €4 billion until 2027, establishment of a new coordination body – AI Office – within the European Commission.

Egle Markeviciute, Head of Digital and Innovation Policies at the Consumer Choice Center, responds:

“Innovation requires not only good science, business and science cooperation, talent, regulatory predictability, access to finance, but one of the most motivating and special elements – room and tolerance for experimentation and risk. The AI Act is likely to stifle the private sector’s ability to innovate by moving their focus to extensive compliance lists and allowing only ‘controlled innovation’ via regulatory sandboxes which allow experimentation in a vacuum for up to 6 months,” said Markeviciute.

“Controlled innovation produces controlled results – or lack thereof. It seems that instead of leaving regulatory space for innovation, the EU once again focuses on compensating this loss in monetary form. There will never be enough money to compensate for freedom to act and freedom to innovate,” she added.

Read the full text here

Britain’s pro-innovation approach will help strengthen its global AI position

The United Kingdom’s Minister for Artificial Intelligence (AI) and Intellectual Property Jonathan Berry, 5th Viscount Camrose, has thankfully reaffirmed Britain’s rational approach to AI regulation. The UK was already 3rd in global AI research and home to a third of Europe’s AI businesses. It is now well-positioned to become a global innovation hub and a world example of how to regulate this emergent field.

While the current European Union’s approach to AI rules often breeds frustration and distrust among industry leads, the UK’s model, introduced earlier this year, creates an atmosphere conducive to discovery and experimentation while remaining aware of the risks AI may bring.

Britain is refreshingly open about the fact that rushed attempts to regulate would not bring the desired result and run the risk of stifling innovation. Secretary of State at the Department for Science, Innovation & Technology Michelle Donelan describes the UK’s innovation-focused approach as “common sense and outcomes-oriented”. In her words, AI is one of five key technologies of the future oriented toward promoting the public good.

Much like Singapore, the UK favors partnering with innovators over introducing hasty regulations and governs AI through various existing laws and standards. While unified AI regulation could eventually be beneficial, it requires careful consideration and testing before implementation.

The UK’s framework focuses on three key objectives to kickstart the engine of discovery: facilitating responsible innovation and reducing regulatory uncertainty to boost growth; enhancing public trust in AI through clear principles; and reinforcing the UK’s position as a global AI leader.

One of the ways the UK strives to collaborate with innovators is the AI regulatory sandbox. Regulatory sandboxes are one of the best catalysts of invention and business development. They support innovators in helping them access the market, test the regulatory framework’s operation in access, eliminate unnecessary barriers, and identify emerging technology and market trends where legislation needs to adapt.

The UK’s current framework-oriented approach does not necessarily mean they will refrain from regulating AI in the future. Instead, Britain pledges to invest more time and effort in understanding both the technology and the risks it brings before moving on to more specific regulation while providing time and space for innovators to scale.

The UK’s aim to be a global AI leader is a goal shared by countries like the US, Canada, China, Israel, and the UAE. Achieving this requires strong R&D, data access, talent, infrastructure, financing, collaboration with major market players, a dynamic innovation ecosystem, a strong local market, and supportive regulatory and political environments.

Occupying 3rd place in AI research & and development and 4th in the Global Innovation Index, Britain has good prospects of becoming one of the leaders in the AI realm. With four of the top 10 global universities and a large number of STEM graduates, the UK’s academic sector excels in innovation and commercialization. The UK houses a third of Europe’s AI businesses and has invested £2.5 billion in AI since 2014, with over £1.1 billion earmarked for future AI initiatives. The UK’s AI sector currently employs 50,000 people and ranks 10th in the Global Talent Competitiveness Index. Initiatives like the Global Talent Visa, championed by Prime Minister Rishi Sunak, aim to further boost the UK’s tech talent pool.

The UK Government’s regulatory approach is receiving a good market response so far – Google DeepMind, OpenAI, and Anthropic will grant early or priority access to their AI models for the UK government to assess their capabilities and safety risks, whereas Microsoft has recently announced a £2.5 billion investment in AI infrastructure and skills over the next 3 years.

It is important that the UK continues its pro-innovation approach and does not repeat the EU’s mistakes – where the scope of regulation became broader once it was handed to regulators who have never experienced the realities of this market for themselves.

The CEO and co-founder of French AI startup Mistral Arthur Mensch recently tweeted that the European Union’s AI Act in its early form was meant to be about product safety, and application regulation, yet currently proposes to regulate “foundational models”, the core technology of AI. What was once about cultivating exciting new prospects is now a significant obstacle to further innovation.

The UK, alongside Singapore, demonstrates progressive innovation policies, recognizing that AI and similar sectors are highly influenced by regulatory environments. These environments can either attract or repel tech companies, sometimes leading to regulatory circumvention, creating distrust and potential societal harm.

Nobel Prize laureate Milton Friedman once said that one of the great mistakes is to judge policies and programs by their intentions rather than their results.

Although it is logically easy to understand why some countries adopt stringent laws to deter potential negative outcomes, the practice has shown that the public sector’s humility in acknowledging its limited understanding of new technologies, combined with supportive actions rather than strict regulation, often yields more openness and better results – both for business and society.

Originally published here

EU’s Digital Decade: Europe’s big ideas mean nothing if they are poorly executed

The EU’s ‘Digital Decade’ faces challenges, including public sector delays, market overheating, and an additional price tag of at least €250 billion, which may hinder reform success across Europe. A more realistic and critical approach is needed, writes Eglė Markevičiūtė.

Eglė Markevičiūtė is the head of Digital & Innovation Policy for the Consumer Choice Center and the former Vice-Minister of Economy and Innovation of Lithuania.

The European Union is setting its sights on the future, one “five-year plan” at a time. Adopted in 2022, the EU’s “2030 Digital Compass: the European Way for the Digital Decade” has ignited discourse about Europe’s digital future and how to plan while not smothering technological innovation in the short term.

The European Commission has pledged a substantial commitment of over €165 billion toward these goals, but the European experience shows that money can’t buy a well-coordinated plan. The success of the Digital Decade hinges on unprecedented levels of coordination and reform at all levels between EU institutions and the Member States. Getting this right will prove to be anything but simple.

Member states had until October 2023 to craft businesses’ use of artificial intelligence strategic roadmaps for implementing the Commission’s plan, but most were already late. Hopes of a ten-year plan will likely be compressed into nearly half that, if not less.

The Commission states that the success of the Digital Decade relies on relevant political reforms, improvements in business environments, new financial incentives, and increased investments in digital technologies and infrastructure. From all estimates, that means at least an additional €250 billion to come close to these goals.

Key to all of this will be political reforms, which are far from easy. The Recovery and Resilience Facility (RRF) is a good illustration, with nearly twenty per cent of the €723 million allocated to digital reforms. Some countries, particularly smaller ones, are grappling with an overheated market response, where IT vendors are struggling to keep pace with the change. The current state of the EU’s single market regarding public procurement and complex procurement processes within member states prevents smooth cross-border business participation. This is all putting reform efforts at risk.

In the realm of compliance and public sector capacity, the Commission is aiming to implement a complicated set of regulations, including the Digital Services Act, Digital Markets Act, e-Privacy regulation, Artificial Intelligence Act, Data Governance Act, Data Act, Cybersecurity Act, the updated E-identity regulation (eIDAS 2), the updated Network and Information Security Directive (NIS2) and more. As exhaustive as this list may be for innovators and entrepreneurs, it also requires a significant expansion of public sector capacity, which some countries, especially the ones with smaller bureaucracies, have already been silently criticising.

One crucial point set in these plans is the EU’s digital sovereignty principle, including the need to foster EU-based business and apply digital sovereignty measures to high-risk suppliers for critical assets. The exclusion of technology from countries that pose a national security threat to the EU is long overdue. The experience of similar reforms in some member states demonstrates, however, that the exclusion process is problematic, given the global makeup of the ICT market. European alternatives like cloud computing are still minimal, and transitioning from existing solutions would impose financial, regulatory, and architectural burdens on EU countries.

As the plan suggests, doubling the number of European unicorns is daunting. The EU trails other economic areas significantly with just 249 unicorns in early 2023, while the US boasts 1,444 and China has 330. Baltic startups, in particular, face hurdles in complying with new EU regulations. Coupled with varying regulations across member states, this conspires to deter Eastern European and Baltic startups from pursuing opportunities and scaling within the bloc. Scaling tech startups relies heavily on access to talent, and while the European Commission wants to compete with Silicon Valley for talent, attracting digital talent from the Global South and other regions remains important and should be essential in addressing the continuous European brain drain to the United States.

The Digital Decade sets a high bar for innovation in quantum computing, AI, semiconductors, blockchain, and more. However, achieving technological breakthroughs means not just political support and financial incentives but also a profound shift in the mindset of European science institutions. Translating European academic excellence into commercialised, marketable products and services remains challenging. The European innovation ecosystem, designed to support the entire innovation lifecycle, is often characterised by fragmentation, politicisation, and a lack of accountability. Therefore, a heightened focus on education and science reforms is crucial for the Digital Decade’s ultimate success.

The EU’s Digital Decade is an ambitious vision for Europe’s future, with important targets in digital skills, business, infrastructure, and public e-services. Planning big and being ambitious has benefits, but given Europe’s grim experience in designing big, allocating substantial finances, yet overestimating bureaucratic and technological capacity and not reaching the desired goals should teach Europe to be more realistic and critical. Only critical, practical and transparent evaluation of member states’ capacity and individual aspirations would help avoid the usual outcomes.

Originally published here

LES TÉLÉCOMS SONT EN GUERRE CONTRE LE STREAMING

Cette opposition ne nuira qu’aux consommateurs, alors que certains coûts contrôlés par les Etats pourraient tout aussi bien être réduits.

En mai dernier, le commissaire européen pour le Marché intérieur, Thierry Breton, a proposé de faire contribuer les plateformes au développement de l’infrastructure numérique, comme les réseaux 5G, ce qui a suscité des réactions mitigées.

Certains acteurs du secteur des télécommunications estiment que les fournisseurs de contenu et les plateformes de diffusion en continu ne paient pas leur « juste part » pour l’utilisation des réseaux qui transmettent leur contenu. Ils mettent en avant le trafic élevé généré par les services de diffusion en continu, qui sollicite leurs infrastructures et leurs ressources.

Sauf que ce n’est pas vrai. Et la mise en œuvre de ces règles de répartition équitable se traduirait surtout, au final, par une augmentation des coûts pour les consommateurs, car des sociétés comme Netflix, Disney, Sky – NowTV et la société italienne Mediaset Play seraient tenues de payer pour les réseaux et reporteraient cette augmentation sur les prix de leurs services.

Les infrastructures ne suivent pas

La bataille pour le partage équitable des contributions a révélé un problème majeur sur le marché européen de la connectivité : les fournisseurs de télécommunications sont censés construire les autoroutes de données de l’Europe, mais ils ne disposent pas des capitaux nécessaires pour le faire rapidement. Le manque d’argent place les économies européennes dans une position désavantageuse par rapport à la concurrence, et il faut faire quelque chose. Malheureusement, le commissaire Breton et ses alliés au sein de certaines entreprises de télécommunications historiques considèrent que le coupable est un groupe croissant de fournisseurs de contenu numérique.

L’argument selon lequel les fournisseurs de contenu ne veulent pas payer leur juste part pour l’utilisation du réseau ne résiste pas à l’examen. En effet, les fournisseurs d’accès à Internet, qui, dans de nombreux Etats membres, possèdent l’infrastructure, ne sont pas autorisés à bloquer les services ou le trafic, sauf pour des raisons de sécurité, grâce au règlement 2015/2120, dit « règlement sur l’Internet ouvert ».

L’application de l’idée du partage équitable aux services de streaming irait à l’encontre de cette disposition, car elle obligerait certains fournisseurs à payer pour l’utilisation du réseau, leur accordant ainsi un traitement différent par rapport aux autres.

Les fournisseurs de télécommunications facturent aux consommateurs l’accès au réseau et les données ; ils sont donc déjà rémunérés pour l’utilisation de leur infrastructure. Au lieu d’imposer des redevances injustes aux fournisseurs de contenu, l’UE pourrait collaborer avec les Etats membres pour réduire le coût des licences d’utilisation du spectre, c’est-à-dire les redevances que les entreprises de télécommunications paient pour accéder au spectre de radiofréquences nécessaire à la transmission des signaux sans fil.

Vers un marché unique des télécoms ?

Dans de nombreux Etats membres, le coût de ces licences peut être exorbitant. Certains se souviennent peut-être encore que l’Allemagne a mis aux enchères le spectre 3G/UMTS pour un total de 50 Mds€ en 2000. Cela représentait 620 € par résident allemand, et les entreprises de télécommunications disposaient ainsi de moins d’argent pour construire l’infrastructure de données nécessaire.

En réduisant, voire en supprimant totalement, ces redevances, les fournisseurs de télécommunications disposeraient de plus de capitaux, ce qui leur permettrait d’investir dans les infrastructures et d’améliorer leurs services.

A l’heure actuelle, le spectre n’est généralement « donné » que pour deux décennies. Une propriété appropriée et des marchés secondaires du spectre fonctionnant dans toute l’UE apporteraient également plus de dynamisme à notre marché de la connectivité. Malgré la rhétorique selon laquelle la fin de l’itinérance intra-UE nous a conduits à un marché unique de la connectivité, l’Europe est encore loin d’un marché harmonisé des télécommunications.

La création d’un marché européen compétitif de la connectivité et des télécommunications pourrait s’avérer plus rentable que la tentative de Breton de taxer les plateformes de contenu principalement basées aux États-Unis. Cela profiterait aux consommateurs en augmentant la concurrence, en faisant baisser les prix et en améliorant la qualité des services de télécommunications.

Si la proposition de l’UE visant à faire contribuer les plateformes au développement de l’infrastructure numérique peut sembler raisonnable et facile à mettre en œuvre pour aider les opérateurs de télécommunications, elle créerait plus de problèmes qu’elle n’en résoudrait. La soif de recettes fiscales de certains Etats membres a considérablement réduit la connectivité de l’UE et les capitaux disponibles pour des investissements importants dans les infrastructures de réseau.

Les consommateurs paient encore aujourd’hui la facture des ventes aux enchères de fréquences par le biais des prix élevés des forfaits de téléphonie mobile en Allemagne et dans d’autres pays tels que le Royaume-Uni. En revanche, les Etats membres baltes ne paient leurs forfaits qu’entre 5 et 35 € par citoyen, ce qui laisse tout de même aux fournisseurs de réseaux les liquidités nécessaires à la construction d’infrastructures.

Pour remédier aux difficultés financières du secteur des télécommunications, il est préférable de réduire le coût des licences d’utilisation du spectre plutôt que d’imposer des redevances injustes aux fournisseurs de contenu. Une nouvelle approche du spectre profiterait aux consommateurs en renforçant la concurrence, en faisant baisser les prix et en améliorant la qualité des services de télécommunications.

Commissioner Breton’s Fair Share demands address the wrong recipient

The EU’s proposal to make platforms contribute to developing digital infrastructure may seem reasonable and easy to help telco operators, but it would create more problems than it solves.

Last May, Commissioner Breton proposed making platforms contribute to developing digital infrastructure, such as 5G networks, which received mixed reactions. Some voices in the telecom industry argue that content providers and streaming platforms are not paying their ‘fair share’ for using the networks that transmit their content. They point to the high traffic generated by streaming services, which strains their infrastructure and resources.

However, this is not true. Implementing these fair share rules would result in higher consumer costs, as companies like Netflix, Disney, Sky – NowTV, and the Italian Mediaset Play would be required to pay for broadband networks.

The battle for ‘fair share’ contributions has revealed a massive problem in European’s connectivity market: Telco providers are expected to build out Europe’s data highways but lack the capital to do it quickly. The lack of money puts European economies at a competitive disadvantage, and something needs to be done. Unfortunately, Commissioner Breton and his allies in some legacy telco companies see the culprit in a growing group of digital content providers.

Implementing these fair share rules would result in higher consumer costs, as companies like Netflix, Disney, Sky – NowTV, and the Italian Mediaset Play would be required to pay for broadband networks.

The argument that content providers do not want to pay their fair share for network use does not hold up to scrutiny. This is because internet service providers, which in many member states own the infrastructure, are not allowed to block services or traffic except for security reasons, thanks to regulation 2015/2120, the so-called Open Internet Regulation.

Applying the fair share idea to streaming services would go against this provision, as it would require some providers to pay for network use, giving them a different treatment over others.

Telecom providers charge consumers for network access and data; hence they are already compensated for using their infrastructure. Instead of imposing unfair fees on content providers, the EU could work with member states to reduce the cost of spectrum licenses, which are the fees that telecom companies pay to access the radio frequency spectrum necessary for transmitting wireless signals.

These fees can be exorbitantly expensive in many member states. Some might still remember Germany auctioning off the 3G/UMTS spectrum for a total of €50 billion in 2000. That’s €620 per German resident telco companies had less to build the needed data infrastructure. Lowering, or even fully scrapping, these fees would give telecom providers more capital, allowing them to invest in infrastructure and improve their services.

Right now, spectrum is usually only ’given away’ for two decades. Proper ownership and functioning secondary markets for spectrum across the entire EU would also bring more dynamism into our connectivity market. Despite the rhetoric that the end of intra-EU roaming led us to a single market for connectivity, Europe is still far away from a harmonised telco market. Creating a competitive European connectivity and telco market might bring higher returns than Breton’s attempt to tax predominantly US-based content platforms. This, in turn, would benefit consumers by increasing competition, driving down prices, and improving the quality of telecom services.

The battle for ‘fair share’ contributions has revealed a massive problem in European’s connectivity market: Telco providers are expected to build out Europe’s data highways but lack the capital to do it quickly

Whilst the EU’s proposal to make platforms contribute to developing digital infrastructure may seem reasonable and easy to help telco operators, it would create more problems than it solves. Some member states’ hunger for revenues has massively crippled the EU’s connectivity and available capital for significant network infrastructure investments. Consumers still pay the bill for spectrum auctions through sky-high prices for mobile phone plans in Germany and other countries such as the United Kingdom. On the other hand, member states in the Baltics are merely charged between €5 and €35 per citizen, leaving the network providers with the necessary cash to build out infrastructure.

The telecom industry’s financial difficulties are better addressed by reducing the cost of spectrum licenses rather than imposing unfair fees on content providers. A new approach to spectrum would benefit consumers by increasing competition, driving down prices, and improving the quality of telecom services.

Originally published here

Three priorities for the new European Parliament president

Tomorrow, the European Parliament will elect its new president. As the cases of Omicron spike around Europe, ensuring European solidarity in the face of the new strain will be one of the new president’s top challenges. The sudden death of David Sassoli, praised for keeping the parliament running during the crisis, leaves big shoes to fill. 

Aside from COVID-19, the new president will also need to ensure that the European Parliament takes a pro-consumer, pro-innovation evidence-based approach to several other pressing issues. In line with the goals set out in the European Green New Deal, these, among others, include sustainability of agriculture and energy cost-efficiency. Other significant areas of attention and consideration should be digital and the sharing economy.

Agriculture and sustainability

The EU Farm to Fork strategy is an ambitious attempt to make agriculture in the EU and globally–through trade policy—sustainable. However, cutting the use of pesticides and fertilisers by 50 per cent, as proposed, will not achieve these goals. Instead, the F2F will result in high consumer prices and reduced food production. The F2F will take crucial crop protection tools away from farmers, leaving them unprepared for the next virus. The black market in pesticides, which is already flourishing in the EU, will undoubtedly seize this opportunity. 

The EU shouldn’t restrict the farmers’ freedom to use the preferred crop protection tools to avoid these unintended consequences. Alternatively, the EU should consider enabling genetic modification in the EU.

To learn more about our stance on agriculture and sustainability, check out our policy paper Sustainable Agriculture, available here.

Nuclear 

The European Union remains unjustifiably cautious about nuclear energy. Nuclear is a low-carbon source of energy and an affordable source of energy. It would enable a decarbonised electricity grid. In addition, nuclear can support decarbonised heat and hydrogen production, which can be used as an energy source for hard-to-decarbonise sectors.

The latest IEA and OECD NEA report entitled ‘Projected Costs of Generating Electricity 2020’ confirms that the long-term operation of nuclear power plants remains the cheapest source of electricity. Furthermore, nuclear is much less vulnerable to price fluctuations, a key point at a time when energy prices are escalating.

To learn more about our stance on nuclear, check out CCC’s Open Letter on Climate Change by our Managing Director Fred Roeder, available here.

Digital

In January 2021, the European Commission presented the Digital Services Act (DSA) and Digital Markets Act (DMA). DMA aims to restrict the market behaviour of big tech giants by introducing a series of ex-ante regulations. However, the current approach lacks nuance and risks hurting the competition in the EU digital market and the EU’s global competitiveness. Instead of going after the success of the high tech companies, the European Union should instead focus on making it easier for smaller European enterprises to operate. One step in that direction would, for example, be to abandon the audiovisual directive, which prevents small and medium enterprises from scaling-up.

To learn more about our stance on the EU digital policies, check out our New Consumer Agenda 2020, available here.

The future resilience of the European Union will be determined by the policy choices made today. It is pivotal that the new president of the European Parliament becomes a champion of innovation, consumer choice, and evidence-based policymaking.

Written by Maria Chaplia and Luca Bertoletti

A Crypto Surveillance Mandate In the Infrastructure Bill Must Be Rejected

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A Crypto Surveillance Mandate In the Infrastructure Bill Must Be Rejected

Washington, D.C. — Today, the US House is expected to take a vote on the bipartisan infrastructure bill that contains vast implications for cryptocurrency users.

Hidden inside is an amendment to tax code 6050I that could make receiving and failing to correctly report a digital asset (be it a cryptocurrency, NFT, or another type of digital asset) a felony. According to the amendment of 6050I, any US citizen who receives over $10,000 must report within 15 days the sender’s personal information such as Social Security number and tax ID. Failure to do so could result in mandatory fines and lead to a felony charge with up to five years in prison. 

As noted by University of Virginia School of Law Adjunct Professor Abraham Sutherland, it “relies on a 1984 law that was written to discourage in-person cash transfers and to encourage the use of financial institutions for large transactions”. By regulators once again applying old rules to an emerging asset class they are risking not only harming the consumer and the whole nascent industry but also further eroding the privacy of US citizens. 

“If passed, this amendment will stifle innovation and result in huge loss of value for consumers and businesses alike while further centralizing control over transactions that US citizens make. It will hurt a flourishing economy, and it will also have long-term effects in a future where digital assets are not going away,” said Yaël Ossowski, deputy director of the Consumer Choice Center, a global consumer advocacy group.

CCC’s Crypto Fellow Aleksandar Kokotović echoed those sentiments: “Not only US companies and investors would be hurt by this amendment, but also domestic consumers and retail investors, who would be severely discouraged from participating in the digital asset class economy which is now setting standards for decades to come.”

In an asset class that didn’t exist in 1984 when the original law was written, it is completely possible that the person receiving the funds would not have a specific individual or legal entity to report but rather that the ‘sender’ is a decentralized exchange or a group of individuals. This is just one example of the anachronistic stipulations of this amendment that are worrying consumers.

“Turning even small retail investors such as students into potential felons or subjecting them to outdated laws will only serve to limit the unparalleled economic growth currently provided by the sector, or risk pushing all investment and entrepreneurship to other jurisdictions,” added Kokotović.

As legislators and regulators seek to understand, contain, and regulate cryptocurrencies, last week the Consumer Choice Center published its list of common-sense principles for smart crypto regulation that will safeguard innovation, protect consumers, and adapt for technological and financial change.

“We recognize the importance of crypto regulation for keeping bad actors in check and providing a sound institutional framework. We also recognize that the nascent crypto finance space is ever-changing and rapidly evolving, and that overzealous regulation could cripple future potential,” said Ossowski. “We offer bedrock principles on smart crypto regulation for lawmakers, hoping to promote sound policies that will encourage innovation, increase economic inclusion across all income groups, all the while protecting consumers from harm,” he added.

In the coming weeks, the Consumer Choice Center will be meeting with legislative and regulatory officials to ensure these principles are upheld in any future regulation or guidance.
 

CONSUMER CHOICE CENTER’S PRINCIPLES FOR SMART CRYPTO REGULATION:

  • Prevent Fraud
  • Technological Neutrality
  • Reasonable Taxation
  • Legal Certainty & Transparency

The policy primer can be read in full here.

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva, and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org.

The EU and the U.S. Need a Common Digital Market Strategy to Counter China

The past few weeks have been hardly an easy time for Facebook.Frances Haugen’s leak, combined with a six-hour blackout last week, has reinforced some politicians’ desire to further regulateFacebook, or even completely break it up, as proposed by Alexandria Ocasio-Cortez. However, while the EU and U.S. are thinking long and hard about their next move against big tech, China has been taking over our digital space in the West slowly but consistently.

Following a report by an anonymous researcher, Hikvision, a Chinese surveillance company, is now facing scrutiny over a privacy breach in Europe. The high-tech cameras produced by Hikvision have been found to be vulnerable and carry risk of malicious code insertion or cyberattacks.

In the U.S., Hikvision was put on the sanctions list under President Trump in 2019. China’s appetite for data is hardly news, and as Europe is finally starting to open its eyes to its scope, it’s time for a shared action. To counteract growing Chinese influences, the EU and U.S. need a comprehensive transatlantic agreement on digital policies.

In January 2021, the European Commission presented the Digital Services Act (DSA) and Digital Markets Act (DMA). At first glance, both acts aim to curb innovation in the EU by keeping American tech giants at bay. Combined with antitrust investigations against Facebook and Amazon, the European Union’s behavior can be easily classified as hostile toward the U.S. However, both DSA and DMA are inept attempts to understand how online platforms work and seemingly fail to strike a balance between the need to safeguard the competition while allowing smaller enterprises to innovate.

To level the playing field for all platforms regardless of their size, the Digital Markets Act put in place a series of ex-ante restrictions to determine the acceptable market behavior for big players. DSA and DMA are not anti-American per se; it just happens that the U.S. tech sector is fertile ground for disruptive platform businesses, which makes them a prime target for EU authorities.

Even U.S. lawmakers have been determined to clip the wings of big tech to encourage future digital innovation. Throughout the years, Facebook has had to fight several antitrust complaints to disprove the claims of its alleged monopoly in the social networking market. Last year, Amazon faced its first antitrust lawsuit, and Google has been flooded with these as well. Most of these proceedings are a knee-jerk reaction to the continuously growing market power of businesses that are fundamentally different from conventional supply chains and corporations that sell physical goods. The Internet has changed everything.

U.S. state and federal regulators and their European counterparts are equally puzzled about how best to address the sudden and continuous exponential growth of tech giants, services that have provided vast benefits to consumers. But in a quest to come up with a perfect piece of legislation to tame tech companies, both the EU and the U.S. have lost sight of the far-reaching hand of the Chinese Communist Party and its influence in the digital market and beyond.

TikTok is a well-known case of how one popular app with ties to China can threaten what we in the liberal democracies value most: freedom. A 2019 report released by The Guardian showed that TikTok was as much a social media platform for sharing videos as a strategically organized censorship and propaganda machine.

The app was found to not only have banned specific anti-Chinese government videos, but also promoted various Chinese organizations, ministries, schools, and universities founded outside China that pushed the Communist Party’s narrative. Huawei’s backdoor to mobile networks globally is another example of how technology is used by the Chinese government to undermine national security and privacy in liberal democracies.

The EU and the U.S. should stand up to China and its growing influence in all areas, but especially on the digital front. The potential extent of its surveillance powers in our countries is terrifying. According to a 2019 research by the Australian Strategic Policy Institute in Canberra, Global Tone Communications Technology Co. Ltd, supervised by China’s Central Propaganda Department, mines data in more than 65 languages from 200+ countries. Since the company is state-owned, the bulk data can be used by others who have access to it.

If left unconstrained, China’s playbook on controlling its citizens could spread to liberal democracies. The EU and the U.S. must work together to develop a common digital strategy to tackle the ever-expanding influence of the CCP.

It is more important that we protect our consumers from a spy country that has detained three million Uyghurs. As such, an EU-U.S. agreement on a digital strategy centered around a shared goal to stop China is paramount to preserving our freedoms.

Originally published here

Bagaimana Kebijakan Regulasi Mata Uang Kripto yang Tepat?

Mata uang kripto, atau yang juga akrab disebut cryptocurrency, saat ini menjadi salah satu medium investasi dan transaksi yang mengalami peningkatan yang sangat pesat. Saat ini, kita bisa membeli berbagai produk mata uang kripto dengan sangat mudah melalui banyak sekali platform yang tersedia di dunia maya.

Tidak sedikit pula mereka yang mendapatkan banyak keuntungan dari investasi di produk-produk mata uang kripto. Keuntungan tersebut didapatkan dalam jangka waktu yang relatif sangat cepat, karena nilai dari mata uang kripto tersebut mengalami peningkatan yang sangat cepat dibandingkan dengan berbagai instrumen investasi lainnya.

Selain itu, banyaknya mata uang kripto yang bergerak sangat bebas tanpa adanya intervensi dari otoritas atau institusi negara juga menjadi daya tarik tersendiri bagi banyak orang untuk menggunakan instrumen tersebut untuk melakukan transaksi. 

Dengan bebasnya pergerakan dan peredaran mata uang kripto, maka nilainya tidak bisa dimanipulasi oleh institusi pemerintahan yang berkuasa.

Dengan semakin banyaknya pengguna mata uang kripto, saat ini kita bukan hanya bisa menggunakan mata uang kripto untuk membeli berbagai produk-produk virtual seperti poin game, tetapi juga mencakup barang-barang nyata hingga kebutuhan kita sehari-hari. 

Tidak hanya itu, beberapa negara juga sudah melegalkan mata uang kripto sebagai legal tender, sebagaimana mata uang nasional yang diterbitkan oleh pemerintahan di negara tersebut.

El Salvador misalnya, belum lama ini menjadi negara pertama yang secara resmi menjadikan mata uang kripto, seperti bitcoin dan berbagai mata uang kripto lainnya, sebagai legal tender. 

Tidak hanya El Salvador, negara-negara lain juga perlahan-lahan mulai menjadikan mata uang kripto sebagai legal tender, diantaranya adalah Panama dan Ukraina (cnbc.com, 9/9/2021).

Tetapi, tidak semua pemerintahan bersedia untuk mengikuti langkah yang diambil oleh El Salvador, Panama, dan Ukraina. 

Tidak adanya peran institusi pemerintah dalam peredaran dan pengaturan mata uang kripto membuat tidak sedikit pemerintahan di berbagai negara di dunia menaruh kecurigaan yang besar terhadap produk ini. 

Beberapa langkah yang diambil tidak main-main, mulai dari melarang mata uang kripto digunakan sebagai alat transaksi yang sah, hingga melarang seluruh kegiatan yang berkaitan dengan mata uang kripto.

Lantas, bila demikian, bagaimana kita seharusnya menyusun kebijakan yang tepat terkait dengan kebijakan mata uang kripto?

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Perkembangan mata uang kripto saat ini seakan merupakan hal yang hampir mustahil dapat dibendung. Untuk itu, sangat penting bagi pemerintahan di berbagai negara di seluruh dunia untuk mampu membuat serangkaian aturan dan kebijakan regulasi yang tepat terkait dengan produk mata uang kripto ini.

Beberapa waktu lalu, lembaga advokasi konsumen internasional, Consumer Choice Center (CCC), menerbitkan makalah kebijakan yang membahas mengenai bagaimana pemerintahan negara-negara di dunia dapat menyusun regulasi yang masuk akal dan tepat terkait dengan mata uang kripto (Consumer Choice Center, 2021).

Makalah tersebut dalam pembukaannya memaparkan bahwa, sejak diperkenalkan pada tahun 2008, sektor mata uang kripto sudah mencapai nilai hingga 2 triliun dollar. Hal ini mencakup penambangan, pasar mata uang kripto, blockchains, dan lain sebagainya.

Meskipun membawa banyak manfaat, seperti memudahkan kita mengirim uang ke luar negeri, sebagai instrumen investasi, dan lain sebagainya, tetapi kita juga tidak bisa menutup mata dari berbagai potensi kejahatan dan juga penipuan yang terjadi melalui berbagai produk-produk mata uang kripto.

Untuk mencegah terjadinya hal tersebut, dan di sisi lain juga bisa mendapatkan manfaat yang luar biasa melalui mata uang kripto, CCC mengadvokasi beberapa kebijakan penting yang harus dapat diambil oleh pemerintah.

Kebijakan pertama yang sangat penting dan tidak bisa dilupakan adalah kebijakan yang berfokus untuk mencegah terjadinya penipuan dan kejahatan. Hal ini tentu sangat penting untuk mencegah penyalahgunaan mata uang kripto. 

Dengan demikian, yang harus menjadi sasaran bukan produk mata uang kripto itu sendiri, melainkan berbagai penyalahgunaan yang dilakukan dengan menggunakan mata uang kripto tersebut.

Kebijakan kedua adalah pemerintah harus memiliki posisi netral terkait dengan perkembangan teknologi. Pemerintah dalam hal ini jangan sampai menjadi hakim yang memutuskan teknologi kripto apa yang menjadi pemenang yang bisa digunakan dan mana yang kalah. Konsumen lah yang harus menjadi penentu utama melalui mekanisme pasar yang bebas,

Kebijakan ketiga yang sangat penting adalah adalah adanya kebijakan pajak yang masuk akal untuk produk-produk kripto. 

Untuk itu, para regulator juga jangan sampai melihat mata uang kripto hanya sebagai alat untuk spekulasi, tetapi juga sebagai teknologi yang memiliki potensi besar untuk membawa manfaat yang sangat luas bagi konsumen dan masyarakat.

Kebijakan keempat adalah adanya kepastian hukum bagi produk-produk kripto. 

Dengan adanya kejelasan hukum, maka kebijakan tersebut akan membuka pintu yang luas bagi perusahaan dan inovator yang bergerak di sektor mata uang kripto untuk memiliki rekening bank, mendapatkan asuransi, dan berbagai hal lain sebagaimana usaha lainnya. Dengan demikian, inovasi akan semakin meningkat.

Keempat kebijakan inilah yang harus dapat diambil oleh berbagai para pengambil kebijakan di seluruh dunia agar regulasi mata uang kripto yang masuk akal dapat tercapai. Hal ini berlaku juga tidak hanya di luar negeri tetapi juga di Indonesia.

Sebagaimana negara-negara lain di seluruh dunia, fenomena berkembangnya penggunaan mata uang kripto, baik sebagai instrumen investasi atau transaksi, juga terjadi di Indonesia. 

Berdasarkan data dari Bank Indonesia, pada bulan Maret tahun ini, setidaknya ada sekitar 3,5 juta – 4 juta pengguna mata uang kripto di Indonesia (iNews.id, 7/10/2021).

Angka 3,5 juta – 4 juta orang tentu bukan merupakan angka yang sedikit, dan berpotensi besar terus meningkat dari waktu ke waktu, mengingat sangat besarnya jumlah penduduk Indonesia dan akses internet yang semakin meluas.

Untuk itu, adanya kebijakan regulasi mata uang kripto yang masuk akal dan tepat merupakan langkah yang harus segera diambil oleh para pembuat kebijakan di Indonesia.

Dengan demikian, bila Indonesia mampu menyusun kebijakan tersebut, negara kita akan dapat mendapatkan banyak manfaat dari teknologi mata uang kripto, dan inovasi teknologi ini juga akan semakin meningkat.

Originally published here

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