Talk of the day: data sovereignty in Europe, and beyond, and the role of telcos in it; plus the impact of digital regulation on digital revolution, and how it might impede or unleash innovation and growth; plus also what it means for late/post-capitalist Big Tech. How do we fit all of that in 200 words? Well, just start writing… The point is there is a ‘throughline’ – to use hateful pattern-matching AI jargon – in certain of the below stories: vaulting between a total state takeover of TIM’s assets in Italy and more Bell-ringing about home-grown compute in Canada, via a January news item (late notice, c/o of an RCR LI fave) about a standalone AWS cloud venture in Europe. 

Across the map, then, we have moves from all sides about regional data trust and traffic flows – watchful authorities seeking greater control, and a fairer deal; hopeful telcos betting on compliance and trust, and a new role in the value chain; fearful cloud giants negotiating the minutiae of local regulation to preserve elastic scale and profits. It is a key narrative in telecoms, and more widely – mostly in opposition to the unfettered free-market growth of US-owned Big Tech, but also in tandem with fractured regulation in the US (where states pursue accountability, including fines on social media conduct recently, while the federal government backs deregulation and free data flows). 

There is a popular meme (or quote) doing the rounds that light-touch regulation in the US has given us AI, whereas the fusty EU has produced the tethered bottle cap. It is a play on Orson Welles’ speech on the ferris wheel in The Third Man, about how 30 years of Italian “murder and bloodshed” produced the Renaissance while 500 years of Swiss “brotherly love” produced the cuckoo clock. But what do you want? War or peace? EU-style (non-US) patchwork regulation is bad for start-up innovation; it makes for a graveyard of ideas and experimentation, and plays into the hands of Big Tech, which can afford ways around the red tape. Every business person says so.

But trust is a competitive advantage. It must be, given the lack of it – as perceived in democratic institutions, as propagated by Big Tech, as coming full circle, possibly. Trust in trust; we are editorialising. But trust can be built by proper regulation to enforce privacy, safety, and accountability. Trusted digital platforms and systems should see higher adoption – so long as they are performant. That should foster long-term growth. There is a trust gap and a trust app, and AI’s future probably depends on how it fills both. Clear rules reduce regulatory arbitrage, so innovation is less dominated by savvy giants; sovereignty measures, propped-up by telcos, can incentivize local ecosystems. 

Hence why telcos in Italy and Canada are setting-up as AI trust centers. Hence also why AWS has local cloud zones across Europe, with an independent parent and independent governance, and a dedicated security center (‘centre’, per the notice) – to be “locally controlled in the EU, led by EU citizens, and subject to local laws”. And so… there isn’t an answer – no victory for sovereignty, no defeat for Big Tech; just a messy equilibrium, as much about perception and jurisdiction, and how to engineer trust. Regulation might screw with SMEs, but it helps with checks, balances, and trust. Which telcos can moderate and monetize, perhaps, and which Big Tech must comply with, at least. Sorry, we overran.