EU Commissioner: We need a sense of urgency

Interview with Erkki Liikanen, EU Commissioner for Enterprise and Information Society, about the European strengths and misses, the chances that Linux might bring for the EU, his views on privacy, copyright, encryption, filtering and consumer rights in the digital age

In December the European Commission launched the eEurope initiative. Now in the middle of March, the government leaders of the member states of the EU in Lisbon stressed their commitment to the plans to get Europe fully connected. Stefan Krempl sat down with Erkki Liikanen, EU Commissioner for Enterprise and Information Society, to discuss his plans to make everybody a Nethead, to talk about the European strengths and misses, and the chances that Linux might bring for the EU. He also asked him to explains his views on privacy, copyright, encryption, filtering and consumer rights in the digital age.

How far did we come in building a true information society here in Europe? Where do you think we're still lagging behind the US?

Erkki Liikanen: The positive side is of course mobile telecommunications because there Europe is the leader. The mobile penetration rate is rising very fast. Germany is very fast moving, but in the penetration figures it is not yet very high. But that is important because I am sure that in the real near future the Internet is going mobile.

We are weak in the PC penetration and in the penetration with Internet and E-Commerce. That's not such a surprise if you consider that the Internet was developed in America, so the technology and E-Commerce arrived there earlier. My position is, that if we go to the third generation of computer and telecommunications these two trends will meet, the Internet will go mobile. Most personal transactions will happen with mobile telephones. So we should keep the grandness in the mobile sector and catch up in the field of the Internet penetration. And our eEurope initiative is especially concentrated on what we need to do to catch up in this area. Key issues are educational improvements in all schools so that the young generation could be fully connected. There are very conscious programs in most of the member countries and there is real urgency because you can't just wait, time goes so fast. Of course the Internet needs to be supported by the senior people also, but the key issue is the young generation.

Second, we must go further down with the access prices, especially the prices for the local calls which are important for the Internet. They are still too high. So we must go forward with liberalization.

The third important issue is that we have been weak in creating a good atmosphere for SMEs. Because in this new digital society you have big global players, but when you go to software content and innovation you need a broad network of small companies and startups.

Do you think we are really catching up in the field of Internet penetration compared to the US? When I look at the buzz about the digital divide in the US and at all the campaigns US president Bill Clinton is announcing to close the gap - doesn't that mean that Europe might be falling even further behind?

Erkki Liikanen: The digital divide is very big in America. Their problem is their school system. There are so many drop outs and literacy is limited. Something that I think is positive in our European society is our comprehensive school system. But it's a major effort to bring in the infrastructure. We need tools, which means PCs in all classrooms. We need teacher training. We need development of multimedia tools, so we should heavily invest there. And most of all we need a sense of urgency. I mean when I talk to member countries people say, yes, that's important but first we have something else to do. So in that area I understand the American worries. There are serious problems of a digital divide because the division of the society. European societies are more cohesive. That's why I would say that philosophically and politically the business opportunities should go hand in hand with the social inclusion because if the number of subscribers of the network grows the value of the network grows due to the law of Metcalfe exponentially. So this inclusion element is terribly important.

That's why eEurope is also investing in applications for groups that are particularly in danger of being marginalized like disabled, elderly or ill people. We have lots of applications and inventions, but we need a real European market for these products and we need faster standardization for growing this sector.

Do you think it's enough to lower telecommunication and access prices to get people connected?

Erkki Liikanen: The problem is, if you don't have Internet literacy it's very difficult to understand what this network society even means. That goes from people who are in danger to be excluded to some big bosses also, who don't know the Internet. You can't understand the network society by reading articles. You must be on the net to understand what a world it opens, how the distance disappears, how you can do interactions there, it's not only a one way. That's why that Internet literacy is so important, that's why we have to give the people the tools to understand. If prices are down, but you don't know what to do - that's very difficult.

So how can you make the people in Europe more curious about the Net?

Erkki Liikanen: We have countries that are ahead of the United States in that area. It can be done but you have to give people the skills and the access to PCs so you can do it either in the office, in the university, or at home. Access at home is perhaps most important. Anybody who goes to the Internet from once will be terribly excited. I've not met anybody who had the skills who did say that it is not the biggest revolutionary change that we have seen in our time. But if you're out, you're out. I met one very leading person who stated, I' don't have time for the Internet because I must think. But if you don't go there now, you are just out of the whole change of the society we are seeing at the moment. I mean, I've been passionately into this field for years, so I just know that everybody needs the basic skills now.

Do you have an idea why the Internet penetration is so high in Scandinavian countries and pretty low in the Mediterranean? Is there a digital divide in between Europe?

Erkki Liikanen: It is digital divide in Europe. I think it's mainly because of countries' policies. Some countries have invested heavily in the information society and in education. So it's part of the schools, it' part of public policy, and what is very important, it's part of public sector reform. Because if public sector reform starts with information society tools, that's the interface. So nothing has happened by chance. And what I feel more comfortable with is that in GSM penetration the southern countries are actually leading. Italy is catching European level. And in Spain and Portugal there are huge programs now to catch up in the field of Internet. I'm also sure that Germany comes out big. But it has seen a slow start, in the statistics Germany is in the second half.

You've talked about the importance of government programs. What role has the state generally in the information society?

Erkki Liikanen: I think there is a role for markets and a role for states. We must let technology lead and we need markets to put the incentives. But it is the role of public authority to ensure that competition functions. The role of the state is also to build the knowledge infrastructure. That means broad education, to create a "government online" concept. The government itself has to act more online. A third role of government is important for the creation of an internal market for the social and health services where information society may hit two targets at the same time. Distance healthcare for instance makes it possible for elderly or ill persons to live longer. But it's also a cheaper solution. There is a huge number of inventions, but the market is moving too slowly. There are still too many restrictions in the market here in Europe.

If we break down the large field of legal issues in the information society to certain areas like privacy, copyright or consumers' rights. Where do you see a need for governments to step in?

Erkki Liikanen: We must be careful to regulate only if it's necessary. Our regulatory legislative procedure is terribly long. A problem may have vanished until regulation comes into play, and there might already be new ones. When you are legislating a very fast and moving area with this kind of heavy procedure you normally don't fix the targets. Let's put regulation to a minimum in a field where public authority makes sure that there is open competition and access for all. You need to do it via universal service, so that you have a basic network for all.

Privacy is important for European people which means that you need to know for what purpose your information is being used. On the contrary, if you go to websites they more and more ask you the question if you want your data to be used or not. If you say no, you're out. I'm testing it myself all the time.

You need rules for copyright because there are multiple effects of the copyright costs. You cannot develop services if they weren't there.

You also need rules for E-Commerce on how and where to resolve disputes. I think that in the long run there primarily must be online solutions to deal with that. At the end of the day you must have the right to go to the courts. But single transactions aren't normally enormously big. If you consider that, you must have a kind of obligatory dispute settlement online that will assist you first. Only in the last resort there is the court.

And where should the consumer be able to go to court? In his country or in the country where the seller is located?

Erkki Liikanen: That's a real issue because neither of these solutions functions well. That's why I am strongly in favor of a solution in which online settlement will work for 99 percent of all incidents. But you're right, we have to handle the court issue. It's not easy for a consumer to go to a court thousands of kilometers away. But it's also hard for a small SME to go to courts in fifteen countries. So better do it online.

Concerning copyright, do you think there is still a balance between the rights of the users and the rights of the artists, or better say the rights of the channels who distribute the work of the artists? What about fair use in the information age?

Erkki Liikanen: I think we have two risks here. One is that if we create too many road barriers, this whole sector will not develop. There will be no markets. The other risk is that there will be no royalties. But I think royalties should be paid once. And if you use the work for private purposes afterwards you don't want to pay a second royalty. But it's now in Parliament and still negotiated, that's why I am a little careful. I'm sure that if there is no market for artists they will lose. For businesses, if it comes to heavy, multiple systems where you have to pay royalties on different stages, you can't build an industry on that. We all will lose then. So what we need to do is to just strike the balance and to understand that the Internet and E-Commerce are huge possibilities for our economy.

It's all the time in the debate that we in Europe make things so complicated and then we start to legislate for about five or six years. Let's put what's essential: universal service, privacy, confidentiality, trust - and these things are terribly important - but do it now. That's why I said that we have to clear this in this year. Because business otherwise doesn't develop if we don't have a proper framework.

As the "successor" of Mr. Bangemann, do you feel that the liberalization of the telecommunications market is well under way?

Erkki Liikanen: It's going reasonably well. For long distance there are more operators in the market and prices are going down. But there are weaknesses. Most importantly in the area of local access, in the last mile that is very important for the consumer. To lease lines which is important for SMEs is still not cheap and easy enough. So we must push the development further.

Do you think there's a need for a pan-European regulation office?

Erkki Liikanen: Intellectually it's an attractive idea. But if we would start to make a proposal we would be stuck for years with questions like how to work out its competencies and so forth. So, too avoid this block we should essentially create better coordination between national regulators which would systematically sit together with the Commission to guarantee that their policies are about the same in member countries.

Do you think that the dot-eu domain will be a force multiplier for European E-Commerce?

Erkki Liikanen: We will see. But it is received enthusiastically by many operators and companies and NGOs who say, when we'll get it we will go for it right away. It's also of symbolic importance and it will come.

Your home country Finland is famous for Linus and Linux. Do you think that pushing the open source movement could be an opportunity for Europe to take the lead in a new sector in the information society?

Erkki Liikanen: I think the open source philosophy is a fascinating subject. Even in Davos there was a workshop about open source software, and it was quite funny. It's very clear that solutions where you know the code and can develop it further is very challenging for young people, and for many companies also. I'm sure it will be a serious competitor in the market. What we need, of course, are user friendly solutions and then the services will follow. It's interesting that many companies are investing in open source software now and in Linux. Linux has good productivity results in the area of servers. I have been testing Linux and I've also sent a letter to my colleagues in the commission that we should use open source software. The atmosphere is very open.

When will Linux be on the desktops of all the Commissioners and the delegates of the Parliament?

Erkki Liikanen: In France they want to make it an obligation to use open source software. But to change the platforms of some twenty thousand people is always a very heavy operation. There are public sectors that are using partly Linux in whole Europe. In Germany, Linux use is growing. In Finland we have administrations that run fully on Linux. I have started the discussion, I've opened the issue and I will make a proposal to consider where we could do open software. Because it's never good to be totally dependent on one single operating system.

Do you think that the use of open source will also bring with it a more open information society?

Erkki Liikanen: I'm sure the philosophy helps also there. Of course we have always the big philosophical debate about standards and codes and lock-in effects. In the companies standards are often used to lock in people to become your clients. But then you're fully dependent on one solution and it's terribly hard to change. So for that reason open software is a possibility. There are two big issues that are on the agenda. Open software and the mobile Internet. Both are challenging and I'm happy that my country has been deeply involved in both efforts.

Do you feel that the directive for electronic signatures is pushing the market?

Erkki Liikanen: Definitely. Usage of electronic signatures is coming. More and more software companies are going to propose software solutions and they will want to make sure that they are compatible with the European directive. We really need these solutions because we not only have to ensure safety for people but also business opportunities for companies. I think that the directive is now fine. The whole trust issue as such will of course develop further and there is huge discussion in that area about smart cards and so forth, which will be exciting. We are proposing a smart card summit now to be held in April in Lisbon to try to find common specifications because there are so many smart cards at the moment and no interoperability. Europe should do things together in that area.

When will we see high broadband mobile networks in Europe?

Erkki Liikanen: GPRS will give us more speed. I just spoke to Ericsson recently and I also talked to Alcatel, Nokia and several operators. They are all sure that GPRS will start this year. It's a rather good short time solution because it increases capacities, it will give you more or less ISDN capacity for mobiles. For the third generation it is very important that the governments do the licensing operation in a proper way. We gave them two years, but some countries like Germany have already started it. In the liberalization area there is one law that has to be clear. The faster you move, the more you win.

Are you using encryption?

Erkki Liikanen: No. I'm working so much with the Finish language - so it's always encrypted. There are so few Finish people. But of course, we have to keep encryption issues high on the agenda because it's a European market in the software area. The American companies are coming now too, so there's a need to push it even further.

Can you imagine a society where everybody has a digital ID? Harvard's Cyberlaw Professor Lawrence Lessig fears that we are going to set up a very tough control system with digital IDs where every move is tracked.

Erkki Liikanen: We must be careful. Let's say we have a chip that is inserted in your jeans when you buy it. You can be followed throughout your life. Labeling techniques are getting better and better. If you put labels in your tires and they are stolen, you can follow their life time. That is changing life and we have this kind of moral discussions, we must work with them. But we must remember also what huge opportunity we have to come towards a society where distance is meaningless. For somebody like me who comes from the periphery it's the biggest revolution you can imagine. Distance is no longer important. If you open access to the net, everybody is in front of wonderful sources. So there are huge advantages. Then there are these side issues which are difficult and we must just work with them without loosing the central proposition. Recently I was in a panel about filtering. We must work with all that and must try to find software solutions. But let's not loose the central proposition. Of course we could also say, let us simply go ten years back and then we would have no problems. But I think it's better to work on the research and technology side to find solutions.

Do you think filtering will work?

Erkki Liikanen: We have some research projects which start to create software and rating systems which will be there. Of course, the problem with all that is that children know the Internet better than their parents. So if the parents want to use the software, the children have to teach them how to do it. We need this kind of tools, but they can never be a 100 percent certain. You cannot protect your children from anything they hear in the kindergarten or in the schools. And you cannot always follow them when they're watching TV. But there should be a possibility for the parents to limit the access to certain contents. It's very important for industries to push this kind of self-regulation efforts. Legislation doesn't help if you don't have the software to do it.

I'm sure that this kind of revolution creates many problems also, so let's tackle them. But we have to put the benefits on the agenda first. Otherwise it's like starting a discussion with the problems for an industry without any industry. It's theoretically exciting, but it's not very good for the deployment of jobs.