MADRID -- A day after America Online and Time Warner unveiled their mega-merger, policymakers and Internet executives on Tuesday said Europe had to work harder to catch up with the booming US Web business.
Delegates at an Internet conference in Madrid said delays in speeding up the technological revolution would not only deny Europeans state-of-the-art media services but would also get in the way of a fundamental overhaul of the region's economy.
"In Europe we are being left behind, we have not been capable of reproducing the successes achieved on the other side of the Atlantic in the 1990s," Spanish Prime Minister Jose Maria Aznar told the "Europe in the Internet Economy" seminar.
"Our problem is not the lack of a scientific or technical base," he said. "Our problem is the lack of stimulus for business initiatives, which is key to North America's success."
Speakers said the roughly $160-billion merger of AOL with Time Warner represented just the kind of bold, deal-doing spirit that was still difficult to pull off in Europe.
"This shows the way we will have to go in Europe," said Spanish Industry Minister Josep Pique. He noted the combined market worth of AOL-Time Warner -- estimated at around $350 billion -- was equivalent to about 60 percent of Spanish GDP.
He criticized the German government for opposing a bid by British mobile operator Vodafone Plc to take over Germany's Mannesmann.
Just 12 percent of homes in the European Union are hooked up to the Web, compared with around 50 percent in the United States, and while European e-commerce revenues soared to 17 billion euros in 1999, they were less than a third of similar income in the United States, European Commission figures show.
The ability of the US economy to grow without stoking inflation has been widely attributed to technological progress.
The Commission unveiled an "eEurope" plan in December with the aim of giving all Europeans access to the Internet over the next few years. But some delegates at the Madrid meeting said it would take too long to implement given the pace of innovation.
Erkki Liikanen, EU Commissioner for Enterprise and Information Society, said Spain had awakened to the need for greater Internet literacy by pledging to spend around $3 billion in three years to provide wide access to the Web.
"But we need a wake up and a shake up at the European level," he said.
European e-entrepreneurs have complained they are challenged not only by Europe's linguistic and cultural differences, but also by varying regulations across the region and by politics.
Most European governments also have yet to begin deregulating "local loops" -- the last sections of cable into homes -- which is a key step in providing competitive prices for the bandwidth on which advanced Internet applications function.
However, delegates to the conference said there was at least one area in which Europe had advantages over the United States.
Esther Dyson, chief executive of US risk capital fund EDventure Holdings, said she was encouraged by plans of new European entrepreneurs to take advantage of the region's far higher level of mobile phone use than in the United States.
"I think they are going to be well ahead of what we have in the United States," she said.
A new generation of mobile phones capable of accessing the Internet for simple operations has recently been introduced in European markets.
