This week, Analysys Mason, a respected telecoms consulting firm, presented a study that highlights the dangers of extending telecoms regulation to cloud services. The detailed economic, legal and regulatory Analysys in the report reinforces CISPE’s own views regarding the negative unintended consequences of the Commission’s plans for unified cloud and telco regulation.
The Analysys Mason study highlights that Europe’s cloud sector isn’t just another utility – it’s the powerhouse behind AI, innovation, and the digital transformation that European policymakers embrace. However, the European Commission’s insistence on dragging cloud providers into the telecoms regulatory framework risks undermining the benefits of cloud computing, thereby jeopardising cloud-dependent growth, productivity and innovation including in areas such as artificial intelligence.
CISPE is concerned that such extension of the scope of the European Electronic Communications Code (EECC), for which no clear justification or assessments have been made, would have a serious adverse impact on the European cloud sector. Analysys Mason’s findings, as well as comments made by a wide range of stakeholders including BEREC, make it clear that CISPE’s views are widely held and supported. As Analysys Mason points out, telecoms regulation was built for state-run monopolies that needed regulatory intervention to establish and foster competition. Extending telecom rules to cloud services is a bad fit that would raise costs, slow investment, and seriously threatens Europe’s digitalisation objectives.
As a reminder, the Commission wants 75% of businesses using cloud services by 2030 but admits that the continent is currently set to miss this target. Contrary to current thinking in the Commission, replayed in the recent Draghi report, Europe has not ‘lost’ in the cloud market. Europe has a more vibrant cloud sector with more players providing bespoke services and innovation that benefit consumers and businesses than any other geography. Yes, it is fragmented, but treating these digital native businesses in the same way as incumbent telcos will only exacerbate the challenges they face and consign all chance of growth – including via EU-wide federated cloud infrastructures – to the dustbin.
In our view, the bottom line is that forcing cloud services into the telecoms regulatory box would be a disaster for Europe’s digital ambitions. Instead of burdening the cloud industry with ill-suited rules, regulators should be encouraging growth, innovation, and investment in the sector.
Europe’s digital future depends on it.