Global Network Fee Proposals are Troubling. Here are Three Paths Forward.

Today we’re sharing our perspective on the EU’s network fee proposal (aka. “fair share”) that would mandate payments from large Content and Application Providers (“CAPs,” such as YouTube or Netflix) to telecommunications network operators. We believe that our position paper is particularly timely given this week’s EU informal ministerial meeting in León.

Regulators and legislators in the US, Brazil, and India are considering similar policy proposals, and our position on those initiatives is no different.

Our analysis? These proposals would violate network neutrality, a bedrock principle of good internet policy, while enriching billion-dollar-revenue telcos – and, most importantly, they would obscure the real goal of digital inclusion. Here’s our perspective:

  • Digital inclusion should be the focus and priority of policy-makers, rather than the profitability of European telcos. The European Telecommunications Network Operators’ Association (ETNO) has attempted to turn the spotlight on their members with their network fee proposal. Yet any direct payments from CAPs to telcos would be no guarantee of more equitable, inclusive, affordable access for all.
  • Evidence should be transparent and verifiable, whether for or against the network fee proposal. The underlying methodology and sources of evidence supplied by ETNO in support of the network fee proposal are not transparent in terms of either source or methodology. This is amply illustrated by the fact that some of ETNO’s claims are contradicted by the annual reports of their member operators.
  • Third, ETNO claims that their proposal would not violate net neutrality have been rejected by regulators and are not supported by historical or economic evidence. Such mandated payments would effectively grant network operators a termination monopoly, giving them gatekeeper control over content and reaching their customers. There is increasing evidence that the biggest telecom operators are already attempting to extract such payments for sufficient connectivity in their network.
  • Finally, many of the concerns raised by network operators are best addressed via competition tools, not network fee payments.

For each of these buckets, we highlight a path forward that stresses public benefit over the “clash of giants” inherent to the network fee debate.

Recently, both the EU and Brazil released the results of their respective network fee consultations. We are heartened to see widespread opposition to the network fee concept. The results of the EU Commission’s consultation in particular, watched by regulators around the world, presents a clear catalyst for policymakers to shift their attention to policy proposals which will more clearly benefit the public interest.

Read our full position paper here.