The amount of data exchanged via the Internet—or rather via telecommunications networks—is larger than ever and will continue to increase. Network operators have to invest in their networks to handle the traffic, which is generated to a large extent by content and applications providers (CAPs), i.e. big tech. A study published by the European Telecommunications Network Operator’s Association (ETNO) shows that six companies—Meta, Alphabet, Apple, Amazon, Microsoft, and Netflix—are responsible for more than 55 percent of global traffic. Because they and other companies do not contribute to network investments and rising costs, some network operators are demanding that CAPs should pay their “fair share”.
In connection with the EU Commission’s proposal for a Gigabit Infrastructure Act, presented on 23 February, the fair share idea is pushed forward. In general, the Gigabit Infrastructure Act is intended to enable faster, cheaper, and more effective rollouts of Gigabit networks across the EU by 2030. The proposal is based on a Decision of the European Parliament and of the Council of 14 December 2022 which states 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 citizens in the Union.”
One initiative related to this act is a 69-page survey directed to all categories of users, including companies, public authorities, NGOs as well as citizens of the EU and other countries. Without using the term “fair share”, section 4 of this survey addresses the issue of fair contribution by all players as well as discusses the risks of such fees. For example, the Commission wants to know what the traffic threshold should be for a company to be considered a large traffic generator (LTG). Participants may also submit a written statement. Not only does the Commission expressly welcome replies from all types of respondents, but respondents are free to answer questions that might not fall in their remit or knowledge at first sight. The survey is open for 12 weeks, until 19 May 2023.
Critics of fair share (perhaps “infrastructure levy” would be a more neutral name) point out it’s the users, not the content providers, that increase traffic—thus, they should be the ones to pay. This would result in higher prices for Internet use, which is not in line with the EU Commission’s goal of making Internet access more affordable in order to enhance digitalization. Consumer groups and the Computer and Communications Industry Association (CCIA) also warn of potentially higher prices for streaming and cloud services if CAPs had to pay such a levy, as they pass on the costs to users.
BEREC, mentions a different aspect to consider: CAPs drive the demand for higher bandwidth with the effect that telecommunication network operators are able to sell higher-priced services to users. However, as the availability of broadband access drives demand for content, there is mutual interdependence.
Furthermore, an infrastructure levy could impact net neutrality, e.g., by network operators prioritizing the individual data packets of CAPs that pay the levy.
The Commission’s survey also aims to determine the details of such a levy. While network operators would prefer a direct payment to them, the EU Commission is looking at the idea of a distributing fund. Currently, it is also unclear which companies will be affected by this regulation or what the threshold is for classification as an LTG.
In 2023, this discussion will gain momentum. In the second half of this year, Spain takes over the EU presidency, and Pedro Sanchez’s government is seen as supportive of the fair share idea. With this in mind, the opportunity to comment and provide one’s view on this topic should be taken.