Viviane Reding
Member of the European Commission responsible for Information Society and Media

Reinforcing the links between the EU and Japan in the ICT and media business

EU-Japan Business Dialogue Round Table
Brussels, 8 July 2005

Co-Chairmen,

Members of the EU-Japan Business Dialogue Round Table,

Ladies and Gentlemen,

I am honoured to participate in this new edition of the EU-Japan Business Dialogue Round Table. This is a special year for both the EU and Japan.

2005, "20 Years of competition in the Japanese telecommunications sector"

Indeed, 2005 marks the 20th anniversary of Japan's 1985 Telecommunications Business Law. It is a good moment to recall that Japan was one of the first countries to introduce competition in this sector.

In recent years both Japan and the EU have endeavoured to adapt their frameworks to the rapid changes of the convergent worlds of telecommunications, information technologies and audiovisual.

I commend my Japanese colleagues for their efforts to address these challenges. I encourage them to continue working to foster competition in all markets; to ensure the transparency and predictability needed by the business; and to implement an efficient and competitively neutral system, in particular for the management of radio spectrum, allowing all operators to realise their potential for growth and investment.

The EU - JAPAN High-Level Meeting on Regulatory Reform and the different contacts established between both administrations have created in recent years a venue for constructive discussions that will certainly contribute to achieving these goals. The Recommendations of Japanese and European participants in the EU-Japan Business Dialogue Round Table have certainly been a significant incentive as well.

Even if the flow of investments between the EU and Japan is important, I am convinced that they are still below their true potential and that working together we will help to create the right environment for them to develop further.

2005 "EU-Japan Year of People to People Exchanges"

2005 has been chosen as the "EU-Japan Year of People to People Exchanges", devoted to promoting a better mutual understanding of European and Japanese society and culture.

Therefore, it is important to recall that People are also at the heart of the EU-Japan cooperation. In our 2004 Joint Statement on Information and Communication Technology we agreed to enhance the quality and convenience of ICT for Citizens. We count on your recommendations to advance on this point.

Recent developments in Europe have shown that European citizens will only believe in the European idea if we can assure prosperity and jobs for them and if they are put at the heart of our initiatives. This is a challenge that both Japan and the EU, as two of the world leading economies, have to face in an increasingly competitive international environment.

New initiative i2010

My new initiative i2010 - European Information Society 2010 is the first concrete initiative taken under the renewed Lisbon Agenda to address the issue of competitiveness.

i2010 has two main goals:

• On the one hand, it is my strategic framework to further develop European Information society and Media policies.
• On the other hand, i2010 is designed to help our Member States raise the profile and reinforce the visibility of ICT policies in the national context.

What is in i2010? It is based on three pillars

The first pillar - an internal market for the digital economy focuses on:

1. Modernisation of the EU rules on audiovisual content services. Currently these are limited to traditional broadcasting and reflect the technology and the regulatory thinking of the 1980s.
2. Increasing access to fast broadband. By 2010 we want to see 50% of EU households connected to high-speed broadband networks to allow access to rich content formats such as video. The review of the regulatory framework will focus on how to:
3. Reinforce competition - we have found that where there is effective competition there is higher broadband take-up.
4. Encourage investments in new high speed infrastructures.
5. New wireless services (e.g. mobile broadcasting, car-to-car mobile networks, wireless local area networks). We need an efficient approach to the use of spectrum (which is a scarce resource) and pan-European approaches that allow cross-border services.
6. Opening markets for rich on-line content. This requires right holders and service providers to agree on conditions enabling to put rich content on line. We have to work with all stakeholders on practical EU level solutions to licensing issues, e-piracy and interoperable digital rights management.

The second pillar is Innovation and investment in ICT research and deployment.

Here, Europe has a problem. EU under invests in research and doesn't translate enough of its research results into economic growth. Evidence is strong that ICTs drive the economy (40% of productivity growth; 25% of GDP growth). But, ICT R&D per head in USA and Japan are at €400 and €350 respectively, the EU puts €80€. USA and Japan put 30% of their total R&D into ICTs; the EU puts 20%.

We have therefore proposed the following:

1. An increase of the investment in ICT research in the EU by 80% from 2007.
2. We also need to encourage the take-up of ICTs across the economy, and in particular for SME.

The third pillar of i2010 looks at the social dimension of ICT

Here we are setting priorities: e-inclusion, e-government and 3 ICT flagship initiatives: 1) ICT services for an ageing society; 2) intelligent car - safer, smarter and cleaner and 3) digital libraries - high-tech tools to bring our Europe's literary and audiovisual heritage available to as many as possible.

1. e-Inclusion will focus on

• access to broadband (4.5 million Europeans risk being having no broadband access even by 2015). We will bring forward proposals on this later in 2005 based on public consultation which we will launch soon;
• e-Accessibility, the public consultation is complete. In autumn we will propose measures (e.g. guidelines, self-regulation, regulation market stimulation);
• We will follow all these lines, building to a European initiative on e-inclusion in 2008.

1. E-Government - our work will continue reinforced through an action plan which shifts emphasis to take-up, quality of services and impact on public sector efficiency. We will focus on key issues such as identity management, security and reliability.
2. The 3 flagships for quality of life that we have proposed build on existing R&D programme expertise (assistive technologies, e-safety and digital archiving & preservation). We aim to develop these further in FP7, with regulatory support where needed and to work with stakeholders to make sure that the innovations have a wide take-up. These flagships will be about putting research into action.

The challenge of security

Let me add a few words on the challenges of network and information security. Our society is heavily dependent on communication networks like the Internet which are exposed to of threats ranging from technology failures to malicious attacks.

Businesses and public services need secure environments in their daily operations. In addition, these threats affect the citizen's confidence in the use of electronic services, which is an essential condition for a broad deployment and use of ICT technologies.

Security is only as good as the weakest link. In other words, significant investment in security measures on one part of a network can be dramatically undermined by the presence of unprotected machines elsewhere on the network. In addition, in a global world these threats have no geographical boundaries and international cooperation is also required to address the problem properly.

What has been done so far?

The EU has recognized that the issue of security is complex and that national security initiatives will not suffice. A coordinated EU initiative is required. A major achievement is this respect was the establishment of the European Network and Information Security Agency, ENISA, in March 2004. ENISA will advise the Commission and Member States on network and information security-related matters. It will also assist the Commission in the technical preparatory work for updating and developing Community legislation.

But the Agency will also contribute to Community efforts to cooperate with third countries and, where appropriate, with international organisations to promote a common global approach to network and information security. You had the opportunity to listen yesterday to a representative of ENISA.

What is next?

Due to the global scale of the threats and their potential impacts, we must combine all forces in a co-ordinated effort to develop policies, regulation and technology addressing these issues. We need to ensure the interoperability between various security options. Local market players are however often tempted to use less costly proprietary solutions, which means that embedded security features in goods and services are not necessarily interoperable.

The i2010 Communication indicates that the Commission will develop a Strategy for a Secure Information Society. All instruments available will be used to foster the establishment of trustworthy, secure and reliable information and communication systems. In the preparation of this Strategy the Commission will need to consider how to enhance the interoperability of security solutions and services; the need for further research addressing Internet stability and network and information security; and the means to raise awareness of users, to benchmark progress and to encourage the exchange of best practices.

Internet

Finally, let me recall that both Japan and the EU have played an important role within the World Summit on Information Society.

In the context of this process, the UN Working Group on Internet Governance has now completed its work and a final report is due in the coming days. The report will be a significant contribution to the preparations for the discussions on Internet governance, in Tunis and after Tunis.

The EU has recently signalled its priorities for Internet governance. These are:

• the need to ensure the continued security and stability of the Internet;
• the need to find ways to deal effectively with SPAM;
• the increased internationalisation of core Internet resources;
• the need to ensure that developing countries can better participate in this governance.

The continued stability and security of the Internet is essential. To date, the Internet has been provided almost entirely by private sector initiative and investment. We recognise this and applaud it. At the same time, more and more governments are asking themselves what they can do to ensure that this critical resource remains reliable and dependable.

I take note of the recent declaration of the US administration concerning certain aspects of Internet governance. For Europe, it is crucial that the future approach to Internet governance is led by the principles of efficiency and openness, and not by considerations of internal policy. At the same time, I have taken note with interest that the US Government has reaffirmed its willingness to pursue an "on-going dialogue with all stakeholders" on Internet governance.

The EU feels that there is indeed room for better exploiting the potential for public-private partnership. We should build on existing governance structures. However, there appear to be areas where there are no appropriate existing global fora where governments and other stakeholders can come together to solve common challenges. Importantly, this includes security and stability, as well as SPAM and cybercrime. Where we have effective bodies, such as the OECD, these are not inclusive enough to allow for the participation of developing countries. It is crucial that all parts of the world become more active in these fields of security and stability and better enforce existing legislation.

Of course, it is clear in my view that reflection on an improved, more effective and inclusive model should not hamper the day-to-day operation of the Internet, and not undermine the good work carried out by organisations such as ICANN. A key objective must be to help support private sector initiative and investment and to promote innovation.

Conclusion

In all the topics I have addressed today, Japanese and European business have a major role to play. I this respect, I hope that the EU-Japan Business Dialogue Round Table will be able to further improve the EU-Japan relationship, providing the information, analysis and recommendations based on concrete business experiences that are essential to continue our tasks, to achieve the common objectives that we have established and to identify and define new areas for cooperation.

I thank you for your attention.