Select Committee on European Union Minutes of Evidence

Memorandum by the Communication Workers Union


  1.  The Communication Workers Union (CWU) represents some 280,000 communication workers in the UK, covering principally posts, telecommunications and related information technology industries []. We regularly contribute to the public debate on the social and economic implications of information technology and welcome the inquiry by the Select Committee and the opportunity to submit evidence to it.

2.  The CWU's Senior Deputy General Secretary, Tony Young, is a Governor of the BBC. The Union's Head of Research, Roger Darlington, is the Chair of the Internet Watch Foundation.

  3.  In the interests of brevity, our submission to the Sub-Committee is confined to a short discussion of the variegated nature of e-commerce and our response to the first three (arguably the most fundamental) of the questions posed by the Sub-Committee in its Call for written evidence.


  4.  Traditionally e-commerce is said to take two forms:

    —  Business to Business (B2B); and

    —  Business to Consumer (B2C).

  5.  However, we think it important to recognise a third form of e-commerce:

    —  Government to Citizen (G2C).

  6.  While G2C is perhaps not seen as traditional e-commerce, it is essentially transactional in that Government—whether national, regional or local—provide information and services to citizens online as a result of payment in the form of direct taxes, indirect taxes and rates. Indeed, in the future, more G2C will become traditionally transactional, through for example online payment of taxes and rates and purchase of car and television licences.

  7.  In the European Commission document e-Europe—An Information Society for All, there are 10 "Priority Areas For Action" and one of these—rightly in our view—is "Government Online". The UK Government has made e-Government a priority and recently advanced its target for 100 per cent online service provision from 2005 to 2003.

  8.  Currently e-commerce breaks down globally into 80 per cent B2B and 20 per cent B2C, so that the e-commerce which consumers and politicians "see" is only a small part of the total. However, in the EU, B2C is only 15 per cent at present since, compared to the United States, a smaller proportion of EU consumers are online and those that are online spend less time surfing.

  9.  However, in perhaps three years time, we could expect the breakdown of e-commerce in Europe to be something like:

    B2B—70 per cent

    B2C—20 per cent

    G2C—10 per cent.


  10.  The key factors determining the growth of e-commerce can be categorised as the "five Cs".

  11.  Connectivity—It is self-evident that one cannot engage in e-commerce unless one has a connection to the Internet. Currently about a quarter of UK consumers have a home Internet connection, virtually all via a personal computer. In future, we will see a wide range of terminal devices for accessing the Internet, including interactive television, games consoles and mobile phones. We are concerned that all citizens should have easy and affordable access to the Internet regardless of class, income, disability or location. Therefore we recommend that:

    —  employers permit reasonable use of their IT equipment for e-commerce by staff in order to develop transferable IT skills and to stimulate the information economy as a whole;

    —  a range of public access points be developed, including post offices, libraries, local government buildings and community centres (see the Government's report "Closing The Digital Divide: Information and Communications Technologies in Deprived Areas").

  Also, it is important that regulators at both national and European level ensure that there is no monopoly on any technical platform for accessing the Internet and conducting e-commerce.

  12.  Cost—It is essential that the tariff structures of Internet service providers permit and encourage surfing at leisure, so that consumers can compare and contrast e-commerce offerings and take time to choose best value products and services.

  13.  Therefore, we welcome new tariff structures such as BT's SurfTime, and similar offerings from companies like AltaVista and NTL, and new service offerings, such as BT's roll out of Asymmetric Digital Subscriber Line (ADSL) technology and the growing availability of cable modems.

  14.  We recognise that competition has an important role in bringing down tariffs and stimulating new services and that, in this respect, Local Loop Unbundling (LLU) has a role to play, but we would counsel that:

    —  LLU has serious operational implications for BT and its staff and cannot be rolled out without addressing such issues as safety and security.

    —  LLU of itself does not add to the nation's physical telecommunications infrastructure and we need to encourage investment in new technologies and new network infrastructures to become a genuinely broadband society.

  15.  Cash—By definition, e-commerce has to involve some form of payment and currently, in the B2C scene, this is primarily through the use of credit cards, but there are some consumer concerns about the privacy of data and credit card scams. Therefore, we need to develop various new forms of e-cash including smart cards.

  16.  We regret the Government's abandonment of the smart card element of the Post Office's Horizon project, but we welcome the encouragement in the European Commission's e-Europe initiative of the establishment of a European-wide infrastructure to maximise the up-take of smart cards.

  17.  Confidence—If e-commerce is to thrive, consumers should not fear going online because of what they might encounter or experience.

  18.  As regards content, we support the work of the Internet Watch Foundation (IWF) in its operation of a "notice and take down procedure" to combat criminal material, its promotion of rating and filtering techniques, and its new education and awareness role.

  19.  There are similar self-regulatory organisations in Ireland, France, Germany, Austria and The Netherlands, but the Sub-Committee could usefully encourage the adoption of such a model in all EU Member States.

  20.  As regards transactions, we welcome the recent establishment of TrustUK as a joint initiative by the Alliance for Electronic Business (AEB) and the Consumers' Association (CA) and we would encourage the new Financial Service Authority (FSA) to take on an appropriate role in relation to online financial services.

  21.  The European Commission has encouraged the development of such organisations and schemes with funding in part or whole for the specific projects, but we believe that too often the approval of such Commission funding is too slow and too bureaucratic.

  22.  Culture—Arguably the most important—if the least tangible—variable in the growth of e-commerce is culture. It is very noticeable that there is already a "digital divide" in Europe between northern countries like Sweden, Finland and Denmark (where Internet access is 35 per cent to 45 per cent), and southern countries, like Spain, Italy and Greece (where Internet access is only around 10 per cent to 15 per cent). The UK currently finds itself somewhere in the middle of both in terms of geographical location and the proportion of Internet users [see Annexes A and B for details].

  23.  Within these national totals, we see wide variations in the proportion of companies operating transactional web sites and the percentage of consumers making online transactions.

  24.  Education is an important factor in cultural attitudes to new technologies. Every school needs high-speed Internet access and schools and colleges should be opened up to adults wishing to develop familiarity with the Internet and all its uses including e-commerce.

  25.  Also, the media has a role to play here and we would encourage bodies like the BBC to run innovative programming around the e-commerce message.


  26.  The e-Europe draft action plan was launched in December 1999 and the Sub-Committee began its inquiry in January 2000. Since then, on 16 March 2000 the European Parliament has adopted its own report on the eEurope initiative and on 23 to 24 March 2000 the European Council met in Lisbon and considered the initiative as part of "Employment, Economic Reform and Social Cohesion—Towards a Europe of Innovation and Knowledge". The European Parliament has gone some way to addressing what we believe is a serious weakness and omission in the original eEurope document, namely the lack of attention to employment issues. Indeed, the Parliament has urged an "Eleventh Priority Area": "Strengthening Employment and Social Cohesion in the Information Society"—something which we very much support.

  27.  E-commerce, in all its forms, will change dramatically patterns of employment and the number, nature and location of jobs. Fears around such issues could prove to be a brake on the rapid deployment of e-commerce initiatives. Therefore, the European Commission needs to sponsor research, develop case studies, and promote best practice in the development of e-commerce. Furthermore, it needs to promote social dialogue between employer and employee representatives at all levels, including most crucially at enterprise level.

  28.  The agenda for this dialogue must encompass:

    —  lifelong learning through education and training in relevant skills;

    —  new patterns of work such as teleworking and atypical work.

  29.  Of course, the very information and communications technologies that are causing concerns can assist dialogue and organisation:

    —  companies can use the technologies to communicate strategic plans more directly to the workforce;

    —  trade unions can use the technologies to recruit and service members among a more distributed workforce;

    —  Government and local authorities can provide employment and training advice and services online and make all this more interactive.


  30.  As regards the regulation of communications infrastructures, clearly codes of conduct and co-regulation are not enough. We believe that the convergence of telecommunications, broadcasting and the Internet requires the creation of a new single regulator for all infrastructure issues—what we might call OfCom.

  31.  By contrast, broadly speaking we support the voluntary approach to the regulation of Internet content generally and e-commerce more particularly. Such an approach—based on codes of conduct and company regulation—works well because:

    (a)  it is supported by industry and avoids heavy bureaucracy and costs;

    (b)  it can be established much more quickly and evolve much more flexibly than legislative frameworks.

  32.  However, there is at least one major drawback to such an approach: it tends to be piecemeal and involve a whole variety of different codes and different bodies to supervise or regulate different aspects of online content.

  33.  Already, in the UK, we have:

    —  TrustUK for problems of buying online;

    —  the Financial Services Authority for the supervision of financial products and services;

    —  the Independent Committee for the Supervision of Standards of Telephone Information Services (ICSTIS) for premium services and chatlines on the telephone network;

    —  the Internet Watch Foundation for criminal content on the Internet, especially child pornography.

  34.  The problem will become greater as we experience multimedia convergence because we will be able, for example:

    —  to access the Web via interactive television;

    —  to watch broadcasts on a PC;

    —  to conduct financial transactions on a mobile phone.

  35.  Therefore there is a case for providing consumers with a "one stop shop" for problems relating to online content:

    —  whether the problem is a credit card scam, a premium telephone service, a television programme, a website or a Usenet news group;

    —  whether the delivery mechanism is a fixed or mobile phone, a PC, a television or a games console.

  36.  Such a "one stop shop" could be a new organisation or a virtual operation run on a contract basis by an existing organisation. This "one stop shop" would not itself advise or intervene on all problems of online content, but it would:

    —  provide a single point of reference for customers and suppliers;

    —  make an initial determination of the nature of the problem and the agency best suited to handle it;

    —  log the reference and refer the problem to an appropriate agency.

April 2000

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