Digital Bridge: Telecom priorities — Tech-on-Thames — AI rulemaking

Digital Bridge: Telecom priorities — Tech-on-Thames — AI rulemaking
Опубликовано: Thursday, 02 March 2023 21:07

POLITICO’s weekly transatlantic tech newsletter for global technology elites and political influencers.




By MARK SCOTT


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WELCOME BACK TO ANOTHER DIGITAL BRIDGE. I’m Mark Scott, POLITICO’s chief technology correspondent, and in the spirit of self-improvement, I promised myself that I would be more organized this year — an effort to be more productive. This, however, is how I feel as we enter the third month of 2023.


Pick up your beverage of choice and settle in:


— The United States and European Union have another tech topic to fight over: telecommunications.


— What is the United Kingdom’s plan for digital, and why does what happens in London matter more than you think?


— Another sign of the Europeanification of U.S. policymaking: state-based AI rules.


THE TALE OF TWO TELECOM STRATEGIES


FOR THOSE KEEPING TRACK, March 2 marks the end of Mobile World Congress, an annual gathering in Barcelona for the global telecom industry. It’s the first time people have descended, in their droves, on the Spanish city since the beginning of the COVID-19 pandemic. This week’s event highlights conflicting approaches to telecom’s future between Brussels and Washington. For the Europeans, the focus is on finding ways to fund new infrastructure via potential levies (read: taxes) on the likes of Google and Netflix. For the Americans, the imminent threat of China — and who’s going to set the standards for the next generation of mobile technology — remains paramount.


It’s worth unpicking these differences. For years, European carriers have moaned that while they spend billions on new cable and mobile equipment, the vast majority of profits from people’s time online goes to American tech giants — known in the industry as “over-the-top” services. The likes of France’s Orange and Germany’s Deutsche Telekom have tried, unsuccessfully, to convince lawmakers that these U.S. firms should be forced to cough up money to pay for this infrastructure, given that you can only use Google on a smartphone if there’s a mobile network underpinning it.


Over the last six months, that argument — that Big Tech isn’t paying its fair share — has gained ground. The European Commission started a consultation this week to figure out if new levies (paid by Big Tech to Big Telco) are needed. It’s doubtful we’ll have new laws by the time the current Commission ends its tenure next year. But in the ongoing lobbying battle, telecom operators like Vodafone are outgunning the likes of Meta. It also helps that Thierry Breton, Europe’s internal market commissioner running this consultation, is the former boss of Orange. Go figure. “We will need to find a financing model for the huge investments,” the French politician told an audience in Barcelona this week.


Now, contrast that with Washington. U.S. officials aren’t (mostly) against new levies on Big Tech. It’s just that for them, it’s a sideshow. What is existential is the ongoing threat of China and how its telecom equipment makers like Huawei and ZTE are scooping market share globally. Cue: market export controls to hobble these companies; immense pressure on European allies to cut Huawei out of their telecom infrastructure; and new funding for emerging markets to use Western technology.


U.S. officials are also very aware of how American companies aren’t really part of the telecom industry anymore, excluding the likes of Intel and Qualcomm. Big hitters like Motorola and Bell Labs are now owned by those pesky foreigners, leading American policymakers to push for so-called OpenRan technology. That approach would allow U.S. software giants like Cisco to piggyback onto existing hardware. In one swoop, so the theory goes, Americans would again be part of the telecom industry that’s now dominated by Nokia, Ericsson, Samsung, Huawei and ZTE. “A competitive wireless ecosystem is vital for our domestic and economic security,” Alan Davidson, U.S. assistant secretary of Commerce for communications and information, said last month.


Not surprisingly, Europeans aren’t that enamored with this approach. Local telecom equipment makers like Ericsson have shown interest. But reshaping the industry to help American software giants to compete isn’t exactly a must-have for Brussels and EU capitals. For Washington, getting Big Tech to pay more so that Europeans can readily surf the internet also isn’t a vote winner. Both sides understand where the other is coming from. It’s just that neither believes the other’s priorities are their concern.


The problem with that apathy is that it creates wedge issues just as negotiations get underway for the next generation of mobile technology, known as 6G. Sure, we’re at least another five years away before that really matters. But Brussels and Washington have made it clear they want to work together to push back on China’s eagerness to tilt these worldwide standards for its own benefit. That’s a difficult proposition if both sides have significantly different priorities when it comes to the underlying questions facing the global telecom industry.


WILL THE UK’S DIGITAL STRATEGY PLEASE STAND UP?


SHAMELESS PLUG ALERT: POLITICO is expanding its tech coverage into the U.K. (if that’s your jam, you can sign up for the newsletter, written by my British colleagues, here). As someone based in London, I’m helping out to get the ball rolling and have been doing the rounds to figure out what London’s approach to tech actually is. Disclaimer: I’m not a personal fan of Brexit. But the U.K.’s departure from the 27-country bloc offers a rare chance to see what happens when a government tries to blend EU-style lawmaking with a U.S.-style approach to business.


Well, that at least was supposed to be the plan. But what’s happened over the last six years is that the Brits veered from one political crisis to another — with their approach to digital rulemaking often one of the first casualties of the ever-changing political winds. This matters. London pitches itself as the transatlantic go-between, able to speak both to Brussels and Washington. But its failure to articulate a clear message on tech represents a failure of British policymakers to turn Brexit into the opportunity that its proponents claimed it would be.


It’s not that the U.K. doesn’t have ambition. There’s a data strategy; an innovation strategy; and a digital strategy. There’s legislation on online safety (more on that here); on digital competition; and on data reforms. Last year, the country brought in the most amount of venture capital for its local tech industry, behind only the U.S. and China. Its agencies — from the Competition and Markets Authority to the Alan Turing Institute — have global reputations. Parts of East London, filled with startups, hipster coffee shops and multilingual engineers, have a distinctly Silicon Valley feel.


But what the country continues to suffer from is a political stagnation that has repeatedly undermined these success stories. I talked to scores of U.K. officials, lawmakers, industry executives and digital campaigners, and all of them bemoaned the lack of focus on tech — even if they disagreed on what that focus should be. What’s clear is the British government wants to prioritize innovation, growth and entrepreneurship (who doesn’t?). But it’s lacking a coherent strategy that has left it, unfortunately, in the second string of global digital powers.


This isn’t just about British navel-gazing. In parts of the EU more sympathetic to market economics (read: Northern Europe), Britain’s departure from the bloc led to power shifting toward Germany and France’s mosre intervention approach on policymaking. It’s not a surprise the EU’s core digital achievements — the Digital Services Act and the Digital Markets Act — are more cumbersome than their British equivalents. “Without the Brits in the room, the French and Germans are in charge,” one EU diplomat told me.


The opposite is true for Washington. The so-called special relationship between the U.S. and the U.K. is often overblown. But on tech, London is a lot more aligned with Washington, especially on national security issues. Two American officials told me they were eager for the U.K. to revamp its digital rules in ways that showed how unwieldy the European approach had become. London’s likely involvement in a Washington-led global data protection regime also could be seen as a middle finger to Brussels on the shifting power dynamics of Western digital rulemaking.


And yet, it can’t be stressed enough how the U.K.’s approach to tech — part EU-style regulation, part U.S.-focused economics — only works when there’s a perception that adults are steering the ship. Officials and policymakers can come up with the greatest of plans. But if the government keeps changing (there have been eight British digital ministers since Brexit) and the priorities continue to shift, none of that matters. I’m still left thinking: What exactly does Britain stand for on tech? I’m not the only one asking that question.


BY THE NUMBERS



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US STATES GO EUROPEAN ON AI


LONGTIME DIGITAL BRIDGE READERS know about my skepticism of Washington passing any digital laws. But just as we’ve seen U.S. states enact a series of privacy standards — mostly because of a lack of comprehensive federal privacy legislation — some of these local lawmakers are now weighing in on the world of artificial intelligence. Call it the Europeanification of American policymaking, in which parts of the U.S. move ahead with their own policymaking akin to EU countries passing their own domestic laws. It’s not a like-for-like comparison. But without movement in Washington, U.S. state legislators are moving ahead on their own.


A lot of these AI-focused proposals fall within the scope of the wider push for state-based (and European-style) privacy regimes. Those rules in California, Colorado and Connecticut, for instance, include provisions that oversee so-called automated decision-making, or AI-powered services reliant on reams of personal data. Other states like New York and Maryland are similarly pushing to regulate specific use cases of the technology, mostly focusing on how AI is used to make employment decisions. A lot of those proposals include EU-style risk assessments and audits of AI systems that wouldn’t look out of place in parts of Europe. Watch this space.


WONK OF THE WEEK


PACK YOUR BAGS, WE’RE HEADING BACK TO BRUSSELS. As part of the recent code of practice on disinformation, a co-regulatory approach to keeping such material off social media, Krisztina Stump is the European Commission official in charge of making sure the proverbial trains run on time when it comes to those rules doing what they are supposed to do.


It’s not an easy task. The Columbia Law School grad (and German citizen) has to wade through newly-published reports from the code’s signatories (including the likes of Meta, Alphabet and Twitter) about what they are doing to combat disinformation. The goal is to hold those companies to account by linking the co-regulatory (and nonbinding) code to the mandatory Digital Services Act. Yes, I know. It’s complex.


“Disinformation is not new,” Stump told a virtual panel last year. “What is new is the speed and the virality of how this information can reach a very broad public. This is a domain [where] we are usually not in the domain of illegal content … More often than not, this isn’t illegal content, which means that the freedom of speech is particularly important.”


THEY SAID WHAT, NOW?


“That’s the way we want to operate, always with our allies, build consensus, build a coalition,” U.S. Commerce Secretary Gina Raimondo told an audience at Georgetown University in reference to convincing allies to slap an export control ban on China. “Having said that — and I want to be clear about this — our export controls are narrowly tailored and designed to deny China certain technology that China wants for their military, and we’re going to do whatever we need to do to make that happen.”


WHAT I’M READING


— The new boss of YouTube, Neal Mohan, lays out his priorities for the video-streaming platform this year, including helping content creators to make more money and protecting users online. Read his open letter here.


— The United States Trade Representative published its annual report on trade policy priorities. There are some chunky sections on both EU-U.S. relations and what to do about technology. Take a look here.


— A Brazilian Senate committee outlined the basic principles for the country’s AI rulebook that would place transparency, explainability and the ability to audit automated systems at the heart of the proposals. If you speak Portuguese, read them here. Otherwise, here’s a good English-language breakdown.


— With ongoing tensions around the Nigerian election results, Logically offers examples of the types of online false narratives linked to election violence that plagued the country’s recent vote.


— The U.K.’s competition watchdog has appointed technology experts to help wade through its soon-to-be-expanded regulatory powers. Check out the boffins here.


— Russia and China are increasingly working in conjunction to peddle false claims about the war in Ukraine in ways that did not exist before the conflict began, according to Joseph Bodnar, Bret Schafer and Etienne Soula from the German Marshall Fund’s Alliance for Securing Democracy.


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