One year to Brexit: tech’s divorce plan
It’s not only the Single Market that the UK will leave in April 2019, but the Digital Single Market (DSM).
A year into the process, the divorce plan is becoming clearer – even if several key factors remain to be decided. Data roaming charges, the geoblocking of digital content, the flow of data through the UK and investment in broadband networks are all set to be disrupted by our departure from the DSM. Here’s what we know so far.
One of the DSM’s key achievements was an end to the “bill shock” of mobile and data roaming, with phone companies gouging consumers and business travellers who wanted to stay connected while abroad. Once Britain leaves the EU, those regulations would no longer apply – but there’s no guarantee that consumers will see a return to high charges.
The UK’s main operators, for example, have all said they have no plans to re-introduce charges post-Brexit. Time to relax? Not yet. Plans can change and the industry has no control over the wholesale charges European Union operators may impose. In its impact assessment for leaving the EU, the Department for Culture, Media and Sport (DCMS) said, “the government would be able to cap the wholesale roaming charges that UK-based operators could impose on EU operators for using their networks, but could not require EU-based operators to reciprocate when UK consumers used EU networks”.
There’s a worrying precedent here, too. In its written evidence to the DCMS, BT pointed out that “customers of Swiss mobile operators face significantly higher roaming
Plans can change and the UK-based industry has no control over the wholesale charges EU operators may impose
costs than customers of EU operators as the Swiss operators do not benefit from regulated wholesale rates”.
And even if operators don’t re-introduce nominal roaming charges, they are likely to make up the shortfall elsewhere. “We’ve seen a number of operators say ‘we’ll maintain a roaming status quo and swallow the cost’,” said Jeremy Lilley, a policy manager at industry group TechUK. “But it’s important for people to understand that has a knock-on effect elsewhere, whether it’s costs being passed on to consumers or a reduction in investment in the networks – these aren’t zero sum games.”
Another key consumer advantage of the DSM is the promise of being able to buy or rent digital content from anywhere in the region – so UK travellers can watch Netflix or other streaming services when abroad.
The EU plans to remove such media borders in 2019, but experts say there’s “still a long way to go” with implementing the legislation, irrespective of Brexit. “Geoblocking figures highly in conversations, and the complexities from a content rights perspective because contracts are negotiated within each country,” explained Chris Wood, a video platform architect with media company Spicy Mango. “What does it mean for content providers? Would the EU overrule local agreements and would distributors such as Vodafone or Discovery be at risk of being sued because content has to be distributed outside of market?”
Being outside of the EU, however, will mean firms operating in Britain won’t have to abide by the rules. That could create a content silo, where British content isn’t automatically available to the EU countries and vice versa.
Free flow of data
Hiked mobile bills and content restrictions could seem like mere potholes if the UK can’t reach an agreement with the EU about data controls. The EU’s principle tool for data is the new General Data Protection Regulation, which in the UK will sit hand in hand with the Data Protection Act.
“We absolutely need to ensure a mutual adequacy decision between the EU and the UK to ensure that free flow of data can happen and the prime minister had positive words on that in that Mansion House speech,” said Lilley. “She said the UK wants to go beyond adequacy and have a regulatory alignment with a continued role for the UK ICO [Information Commissioner’s Office] on the EU data protection board. That’s a key area on whether there are opportunities to do something different.”
But the impact report highlighted that the UK will have less say in the DSM policy, while still having to adhere to it. According to TechUK, the UK will also have to bend to the will of the DSM, while seeking opportunities elsewhere. “There are opportunities there, but a lot of those opportunities aren’t worth pursuing if they outweigh the benefits,” said Giles Derrington, head of policy for TechUK.
“There isn’t a land of milk and honey that’s better than what we’ve got – things are going to have to change. And we’ll have to be cleverer and see how the rest of the world works to mitigate some of the potential downsides.”
One of those downsides is the UK ceasing to become the port through which data travels. At the moment, Britain is a staging post between the US and the EU, partly due to language and political ties, but also because so much cabling infrastructure passes through the UK. According to TechUK, the UK represents 3% of global GDP, but 11.5% of global data flows, with 75% of data passing through the UK flowing between Britain and the EU.
“We want to build on that but the way to do that is not by breaking the ability to free flow data in to the EU,” said Derrington. “We will only find success by maintaining that and having close regulatory alignment and then looking for business opportunities.
“We sent a letter to Liam Fox to say, ‘Look, we understand that you want to do trade deals, but don’t do that if it will diverge from the free flow of data that breaks the link to the EU.”
Although officials, such as Brexit minister David Davis, have painted Brexit as a boost to broadband because it would allow UK taxpayer investment in infrastructure, others believe that leaving the EU and DSM will have a negative impact.
“The UK is already lagging behind in terms of highspeed broadband access and this already has a detrimental effect on SMEs and businesses, in particular those in rural areas,” Theresa Griffin, a Labour MEP, told PC Pro. “Regions in the UK have previously received European Regional Development Funds to upgrade their broadband provision, such as Cornwall receiving £132 million.”
According to Griffin, not only would leaving the DSM pose funding problems, it could also stifle ambition, with EU chiefs pushing targets that are far ahead of those in the UK. “In the Digital Economy Bill, the government has set a target for all UK citizens to have broadband speeds of 10Mbits/sec by 2017, while the EU’s target is 30Mbits/sec by 2020,” she said. “The UK risks being left behind in terms of internet access and the government has already demonstrated very low ambitions for improving it.”
Cornwall has previously received £132 million from the EU to improve broadband across the region