Digital single market report card: 61 percent

At the year mark, the Commission struggles to keep pace with innovation and consumer demand.

A one-year anniversary is usually celebrated with a “paper” gift. That’s about all the European Commission has to show since the launch of its digital single market strategy — lots of paper, a lot still in draft.

The Commission released a 16-point proposal on May 6, 2015, to boost the digital economy in Europe, its third try in a decade. The initiative was designed to simplify everything from online shopping to how creators are paid for their work. Over the past year, the Commission has unveiled few specific plans while struggling to keep pace with innovation and consumer demand.

POLITICO grades the progress.

Internal EU cohesion: 6/10

Inside the Commission, there’s been plenty of headbutting. Different departments are drafting various parts of the strategy. The new divisions of labor under European Commission President Jean-Claude Juncker were supposed to resolve longstanding rivalries. Instead, the departments for content and technology (DG Connect) and industry and entrepreneurship (DG Grow) continue to disagree over technology standards and copyright restrictions.

France and Germany, meanwhile, are sticking to their protectionist tendencies, while the Baltic and Scandinavian states, along with the U.K. and the Netherlands, remain more liberal. This could spell trouble in the Council.

Pet projects of Digital Commissioner Günther Oettinger are also causing friction. He is pushing for a position on regulating Internet platforms like Google and Uber, but stakeholders say the Commission is sending mixed messages. Political agreement seems far away.

Meeting deadlines: 6.5/10

The Commission has missed some of the most important targets. Copyright reform proposals, expected last year, are still delayed, except for what Pirate Party MEP Julia Reda, who authored the European Parliament’s report on copyright, calls “a tiny, tiny part” on content portability. New rules could allow consumers to watch Netflix while traveling abroad, for example. A second set of reforms is now set for September.

The Commission also hoped last year to streamline coordination on tech standards for digital devices, which would help machines and software talk to each other. Cross-industry standards are essential to make connected devices, like cars and health monitors, compatible. Now, they won’t come out with anything substantive until year end.

Preliminary plans were published only in April. A proposal to choose a range of ICT standards for industry is only expected in late November or December.

And the biggest challenge is yet to come: an overhaul of the Telecoms Regulatory Framework. EU national governments shrugged it off in 2015 when they chose to push ahead with only reforms of mobile roaming charges and net neutrality.

A larger telecoms framework review, now coming in the fall, will touch on everything from the roll out of high-speed broadband to how services like WhatsApp and Skype are regulated.

Affordability: 4/10

The Commission’s digitizing European industry plans alone will cost €50 billion, but spending through 2020 was locked in place with the budget for 2013.

In search of new money, the Commission wants to lean heavily on public-private partnerships and member countries. Juncker’s Investment Plan is promoted as a way to leverage the necessary cash for new networks and risky research. The Commission needs to convince businesses and the European Investment Bank to shoulder more risk.

Technical readiness: 6/10

The Commission is not just trying to regulate the today’s digital reality, it is trying to foster tomorrow’s. A European cloud for researchers, websites to monitor parcel delivery prices, improving and harmonizing data flows — these are just a few efforts to spur cooperation.

Initiatives like cross-border, e-government services would require every country to raise its game. Not all are up to the challenge. There are still many European countries with no online public administration. Given the EU’s track record with the Online Dispute Resolution Directive and years-long fight over airline the Passenger Name Record system, it’s unlikely this will go smoothly.

Chances of meeting goals by 2019: 3/10

At least three issues risk crushing the timeline: copyright, e-privacy and an overhaul of telecoms regulations.

Any effort to force news aggregators, like Google News, to pay copyright fees for the use of publishers’ snippets, will face fierce resistance. Already, Google News closed shop in Spain after similar laws were introduced.

Problems with the e-Privacy Directive remain unresolved after five years, and a wider review could spur the next boxing match between privacy advocates and businesses. Experts have flagged this review as the next privacy debate. If it is anything like the General Data Protection Regulation, which took five years to wrap up, e-privacy won’t make the 2019 deadline.

Consultation with all players: 7/10

After complaints about the speed of the Connected Continent proposals in 2013, stakeholders are happier with lengthier public consultation processes.

The Commission will have to maintain its openness and tread a fine line. There is a potential for complaints around sensitive issues like freeing up radio spectrum for 5G mobile technology. At the same time, stakeholders are nearly “consulted out,” according to Agustin Reyna, a senior legal officer at consumer advocacy network BEUC.

Ambition: 8/10

Despite criticism and concern over missed deadlines and complex policies, stakeholders are largely impressed with the scope of the digital single market proposals. “The strategy is sound, the priorities are clear,” said DigitalEurope spokesman Paul Meller.

And initiatives on lowering roaming charges and online content portability would benefit consumers, allowing them to take digital subscriptions with them outside of their home countries and pay less for international calls. They also calm the worries of those unsure about the benefits of European Union membership.

“It makes even more sense to put emphasis on positive projects like the digital single market, given a certain sense of fragmentation within the EU,” said Slovakian Ambassador to the EU Peter Javorcik.

Improvement over old plans: 8/10

Digital is taking over the world, which “makes it easier for this Commission to put these issues higher up on the agenda,” according to liberal MEP Marietje Schaake.

Damir Filipovic, DigitalEurope’s director of digital enterprise and consumer policy, said, “Compared to previous Commissions, this one is definitely bolder.”

But the rise of digital also makes the strategy more political, setting up new hurdles for Juncker’s team.

Business impact: 6/10

For the digital single market to work, the EU needs to be more innovation-friendly. Startups often find it difficult to grow within Europe, opting instead to uproot.

The Commission hopes to address this through increased access to investment under the Capital Markets Union. Without support for larger venture capital funds and a more risk-friendly environment, Europe will struggle to become a digital leader.

“This is causing the biggest headache,” said Markus Reinisch, public policy director at Vodafone.

Total score: 54.5/90

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