March 29. 2024. 1:45

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NGOs, streamers join forces against EU Commission’s senders-pay initiative


The European Commission’s initiative to make online content providers pay for network investment costs has managed to bring together two historical enemies, civil society groups and rightsholders.

One year ago, Internal Market Commissioner Thierry Breton announced an EU initiative to ensure that telecom operators have ‘fair remuneration’ for their networking, stating that there are no longer the right conditions for investing in digital infrastructure in Europe.

In other words, Breton, a former CEO of France Télécom, endorsed a long-standing grievance from large telecom operators that point out how they are continuously asked to invest in upgrading their networks’ capacity whilst a handful of tech companies reap most of the economic benefits.

Commission to make online platforms contribute to digital infrastructure

The European Commission is set to present a legislative initiative to make content-heavy platforms contribute to the cost of telecom networks before the end of the year.

The idea of making large traffic generators give a ‘fair contribution’ was included in a consultation that the Commission launched in February with a Connectivity Package. The consultation is exploratory, a format never used before, meaning the EU executive did not commit to presenting any legislative proposal.

At the same time, this initiative has prompted concerns from several sectors and interest groups, a diversity of which is reflected in the signatories of the joint statement, published on Wednesday (3 May).

“A mechanism of direct payments to telecom incumbents would in fact have immediate and wide-ranging negative consequences, not only on European businesses, but also on consumer interest,” the statement reads.

Remarkably, the statement is signed by NGOs and rightsholders, two groups that consistently clashed in the context of the Copyright Directive. Ironically, the EU’s copyright rules are somewhat of a blueprint for the senders-pay initiative, as they set a precedent in trying to redistribute revenues generated in the digital economy with regulatory intervention.

EU Commission launches Connectivity Package with ‘fair share’ consultation

The European Commission put forth a Connectivity Package on Thursday, including measures to boost the rollout of high-capacity networks in Europe and a public consultation that might pave the way for Big Tech companies to chip in infrastructure costs.

Civil society groups are particularly concerned that a senders-pay mechanism would violate the net neutrality principle, as it would be based on putting specific conditions on certain large traffic generators.

By contrast, streaming services fear being caught in the proposal’s scope rather than Big Tech companies. This uneasiness is due to one of the proposals floating around, which would see the large traffic generator based on the highest shares of peak hours.

“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,” continues the letter, which also counts the European Consumer Organisation (BEUC) among the signatories.

“A network fee direct payments scheme is not the right solution to achieve high quality and affordable connectivity for consumers,” said Ursula Pachl, BEUC’s Deputy Director General.

The signatories consider the harm to consumers would come from the fact that the network contribution would be passed on to them, whilst their choice will be reduced as content companies will have less money to invest and distribute new content.

Mobile Virtual Network operators have also joined the coalition, stressing that a senders-pay contribution would inevitably favour legacy telecom companies, the former state monopolists, to the detriment of smaller alternative operators and those that do not own the infrastructure.

According to the joint statement, the Commission is also giving privileged treatment to incumbent operators via its Recommendation on gigabit connectivity, which alternative operators vehemently oppose as it will lighten up price control obligations for accessing network infrastructure.

Gigabit recommendation – what impact on the telecom sector?

The European Commission has recently proposed a Gigabit recommendation as part of a broader Connectivity Package. We discuss the potential impact of the recommendation on the European telecom market with Kamila Kloc, Acting Director for Connectivity at the European Commission, …

Moreover, the statement stressed that there is no evidence of a market failure, pointing to the findings of the Body of European Regulators for Electronic Communications (BEREC), which were indeed critical in this sense.

The signatories also include broadband service providers, cloud associations, and Wikimedia. Big Tech companies, which are also set to be affected by an eventual initiative, have avoided publicly opposing the proposal to avoid the debate being framed as Big Telcos vs Big Tech.

The joint statement was published with a ‘statement of concern’ from MEPs Tiemo Wölken, Karen Melchior, Cornelia Ernst, Patrick Breyer, and Christian Terheş, saying that a senders-pay proposal “risks undermining the smooth functioning of the European internet economy.”

The mobilisation of EU lawmakers is much smaller than a letter sent in July last year.

EU regulators give negative view on proposal to make platforms pay for telecom infrastructure

The Body of European Regulators for Electronic Communications raised several critical points in its preliminary assessment of an upcoming senders-pay model that would see the most data-intensive platform contributing to the financing of digital networks.

Read more with EURACTIV

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