Let’s practice more ‘Wu Wei’ rather than implementing more unnecessary regulation

Let’s practice more ‘Wu Wei’ rather than implementing more unnecessary regulation

At the beginning of February we joined Agoria and other telecom operators in calling for a ‘New Deal’. We are keen to continue to invest in digital networks and services, but would ask the government to create the right framework in which to do so. Barely a few weeks after this appeal it is rather disconcerting to see that the introduction of 5G in the capital is being jeopardized by the strict Brussels radiation norm, which in fact had previously caused problems when 4G was rolled out. If we want this country to remain amongst the telecoms front runners in Europe we cannot afford to continue to procrastinate.

There’s definitely something to be said for ‘Wu Wei’ here. Who? What? It is a philosophical concept of Taoism, literally based on the principle of ‘non doing’ or ‘action without action’. Manuel Kohnstamm, Head of Corporate Affairs at Liberty Global, Telenet’s parent company, used it in one of his keynote speeches on regulation in the telecoms sector last year. And he’s right. ‘Doing nothing’ can sometimes be an effective technique to achieve something big.

“Today’s internet giants have one thing in common: they identified new opportunities in relation to the internet where hardly any rules existed,” stated Kohnstamm. “In actual fact the absence of policy measures generated new and disruptive developments.” This is a brilliant example of Wu Wei. The business world can achieve great things but is sometimes hampered by well meaning rules that don’t always have the desired effect.

Obviously we do need regulation in order to prevent chaos or other problems. But Belgian competition legislation in the telecoms sector is already particularly extensive and distortion in competition is being dealt with effectively. Belgian consumers are extremely well protected and competition is being encouraged more than ever before, as demonstrated by, for example, Easy Switch.

That’s why Belgium would do well to introduce a bit more Wu Wei. It is not unlike bringing up children: will you let them climb a tree, albeit with the risk of them falling out of the tree, or are you teaching them how to climb? Or do you say right from the start: ‘Don’t climb that tree!’ – which means that, yes, they won't ever fall, but they will never learn to climb either?

Giga investment

There’s absolutely no doubt that major action is required in the telecoms sector. The demand for data volumes continues to grow exponentially and the number of connected apparatus will also triple by 2020 as a result of the Internet of Things. The European Union has consequently set three major targets to realize by 2025 in order to prepare Europe for a giga network: every family must have access to a network with an internet speed of 100 Mbps, which is ready for an upgrade to 1 Gbps. Schools, universities, research centers, transport hubs, hospitals and government authorities should also be able to achieve an internet speed of 1 Gbps. And by then 5G should be possible in all urban areas, on major roads and train connections.

The European Commission has estimated that this will require an investment of no less than 500 billion euro. Most of this will have to be generated from private companies. In this respect it is rather unfortunate to see that certain regional governments and the Belgian telecoms regulator are creating an unfavorable climate by obstructing the introduction of 5G in the capital and by imposing ever stricter rules in terms of wholesale access to the cable network.

Their regulation is at odds with the policies of the federal government and the European Commission, which specifically aim to promote investment to keep Belgium a front runner in Europe in the field of digitization.

Greater impact through Wu Wei

And yet we are making every effort in this country to be able to compete with the best. In 2016 the telecoms sector invested no less than 1.6 billion euro, or 217 euro per inhabitant. A study by Arthur D. Little in 2017 demonstrated that each euro invested in networks generated 4 to 8 euro in terms of GDP. The telecoms sector is one of the main drivers of the Belgian economy. Telenet alone invests approximately 25 percent of its turnover. The sector consequently also has a major impact on employment. Each job in the telecoms sector actually creates 1.3 indirect jobs in support of the sector.

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Supervisory bodies and policy makers often only focus on consumer prices as a measure for success and competition. However, that is short term thinking. If we want to remain relevant we need competition in innovation and investment. Otherwise there would be no price competition. What should be clear, however, is that you cannot have the best infrastructure in Europe and the lowest prices.

Hence: Wu Wei. By refraining from a certain action, rather than continually imposing regulation, a government can sometimes make more impact. It is not a good idea to continue to leap from one regulation to another. Continued investment requires regulatory stability. Moreover, it is a waste of time to impose stricter rules at micro level because progress cannot be stopped. Unfortunately, however, it can make you late...

Sources:

by Ann Caluwaerts Chief Corporate Affairs at Telenet