Government & Policy

50+ ISPs, NGOs and broadcaster groups hit out at ‘Big Telco bias’ driving anti-competitive EU network fee proposal

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A coalition of more than 50 European consumer and digitals rights groups, smaller ISPs and broadcasters have inked their name to a joint statement urging EU policymakers and Member States to reject a controversial network fee proposal being lobbied for by major telcos in the region.

They suggest any move to legislative for a mechanism that funnels direct payments to telecom incumbents would have “immediate and wide-ranging” negative consequences for European businesses and consumer interest — arguing it would hit consumer costs and choice by damaging the diversity and quality of products and services available online, as well as harming competition.

“The risks of introducing network fees are many but ultimately the biggest threats would be to consumer rights, costs, and freedom of choice,” they warn. “Users of the internet and mobile networks are the key players in the debate, not content providers. Consumers access content (and thus drive internet traffic and take-up), so the fee would effectively be a fee on consumer behaviour and choice.”

Signatories to the statement run the gamut from civil society groups such as Access Now, BEUC, EDRi and the EFF, alongside ISPs like Level7, Link Broadband, and Total Wireless, plus broadcaster groups and publishers such as the Sports Rights Owner Coalition, Motion Picture Association, and Wikimedia Europe, to name a few.

EU uses key telco stage to press the case for rethinking network funding

Major European telcos, meanwhile, want regional lawmakers to let them extract a network fee from Big Tech platforms whose popular services they claim are responsible for generating the most traffic across their fixed and mobile networks — spinning the ask to double dip (given consumers already paid them for connectivity), such as getting tech giants like Meta and Netflix to contribute what they dub a “fair share” toward funding network infrastructure costs.

While the likes of Meta have pushed back, saying that such a fee would actually be arbitrary and unfair.

Thing is, the European Commission, which is responsible for drafting EU legislative proposals, has been sounding suspiciously sympathetic to Big Telco’s lobbying.

Back in February, internal market commissioner Thierry Breton appeared onstage at a major industry confab, MWC in Barcelona, where Big Telco gathers annually to hype the next flavor of connectivity, to personally evangelize the “Web 4.0” “connectivity revolution” he suggested would be speeding down carriers’ pipes.

Simultaneously, Breton questioned the “traditional model of vertical integration” — telling conference delegates: “We will need to find a financing model for the huge investments needed that respects and preserves the fundamental elements of our European acquis,” and signposting the existence of an exploratory consultation on funding future networks the Commission had launched mere days before. (BTW: The deadline for contributions to this consultation is now just a few weeks away, on May 19.)

While the Commission maintains no decisions have been taken on how the bloc should evolve funding mechanisms for internet connectivity to ensure infrastructure upgrades enable the next wave of disruptive digital services — saying it wants to take a comprehensive look to consider how best to proceed — signatories to the statement are concerned the process is biased in favor of Big Telco.

“We welcome the European Commission’s decision to only launch an exploratory consultation on the matter, and many of us intend to submit contributions. That being said, we fear that the process could lead to misleading conclusions on the need for and consequences of a network fee,” they write. “This fear seems to be shared by other stakeholders: leading MEPs have already publicly called this consultation ‘biased’ because of its assumptions and structure, which do not allow all stakeholders to contribute in an equal way (i.e. civil society, consumers, academia compared to ECNs and CAPs).”

The coalition also argues there is no evidence of the need for such an extraordinary network fee, claiming: “The concept of the contribution stems from large internet providers proposing a favourable solution for a problem that has not been identified, justified nor clarified. This ‘solution’ would harm and discriminate against every other part of European business and consumer good, to the single benefit only of large telecom providers.”

They also raise antitrust concerns, suggesting additional payments made direct to telco incumbents would only crank up the “profitability gap” that already exists between traditional telecom operators versus smaller alternative operators and MVNOs; and versus other content services providers that rely on telcos’ networks to provide “vital competition and choice for consumers,” as their statement puts it.

The prospect of the Commission taking steps to cement Big Telco’s grip on connectivity does seems at odds with recent moves by the Commission to regulate Big Tech’s market muscle, under the incoming Digital Markets Act — lending weight to a critique of pro-telco bias in the upper echelons of the EU’s executive.

Six parliamentarians (including five MEPs) have also co-signed a separate statement today supporting the coalition’s concerns over “the Commission’s approach on the network fees.” The lawmakers also warn the proposal “risks unprecedented impacts to net neutrality, to the health of competition and content, as well as to consumer welfare, choice and costs.”

While Thomas Lohninger, from the digital rights NGO epicenter.works (another signatory to the coalition statement), takes direct aim at Breton, writing in another supporting statement, “Never in the last decade has the European Commission appeared so captured by special interests and shown such disrespect for its own due diligence principles. Former France Telecom CEO and current commissioner Thierry Breton seems determined to sacrifice consumer choice, competition and the open internet for the profits of the telecom industry.”

So, er, ouch!

We’ve reached out to the Commission for a response to the claims of bias and the wider concerns raised about the network fee proposal.

“The threat to competition is even more obvious if we consider the Commission’s proposed Recommendation on regulatory promotion of Gigabit connectivity, published alongside the exploratory consultation,” the 50+ signatories on the joint statement go on. “European alternative operators’ have already warned that the draft Recommendation would have ‘detrimental impacts on competition, on the EU internal market and on consumers’ interests,’ due to its focus on ‘increasing the profitability of ex-monopoly telecom operators’ (via lighter price control obligations). The pattern is thus clear — as is the risk of disproportionately enhancing the power of telecom incumbents, whether by deregulation or via direct contributions.”

“In light of all this, we ask European policymakers and Member States to stand against imposing direct payment obligations in favour of the largest telecom operators. The current system is sustainable, built on the shared success on telecom operators, content distribution and consumer choice,” they add. “We also call on the EU Commission and Regulatory Scrutiny Board to duly apply Better Regulation principles throughout the whole process. Any type of policymaking should always be based on evidence, involve all relevant stakeholders (incl. citizens and businesses) and follow a thorough, comprehensive impact assessment. There should not and cannot be any shortcuts on this.”

Update: A Commission spokesperson has now responded, sending the following response:

First, we would like to clarify that the Commission’ current exploratory consultation is neither a  Commission “proposal”, nor a Commission “initiative” nor does it indicate any “Commission approach” on any of the topics it touches upon.

The consultation has a broad objective of identifying Europe’s needs in terms of connectivity infrastructure to lead the digital transformation and tackles several topics, such as spectrum and single market for telecoms, which may need to be addressed to ensure this infrastructure can be delivered.

We need to increase investments for more modern and more resilient networks across the EU. This is to the benefit of EU citizens and businesses which rely on connectivity to provide their services.

As part of this broad reflection the consultation touches upon the issue of a fair and proportional contribution to the costs of public goods, services and infrastructures. This is a complex issue and any decision should be made by understanding the underlying facts and figures.

The exploratory consultation will gather input also to evaluate whether other players should contribute to telecoms’ networks’ costs.

Gathering information on this issue is in line with the 2030 Digital Decade policy programme and the Declaration on digital rights and principles, which contain the aim that “all market actors benefiting from the digital transformation should assume their social responsibilities and make a fair and proportionate contribution to the public goods, services and infrastructures, for the benefit of all Europeans.”

The spokesperson also reiterated a prior claim that: “Reopening EU net neutrality rules has never been in question,” adding: “The Commission has made a strong commitment to protecting a neutral and open internet where content, services, and applications are not unjustifiably blocked or degraded, in Europe as well as on the global stage. This is enshrined in the Open Internet Regulation, and it is also one of the fundamental principles in the “European Declaration on Digital Rights and Principles for the Digital Decade”, by the European Parliament, the Council and the European Commission.”

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