More than 50 ISPs, NGOs and broadcasters denounced ‘Big Telco bias’ driving anti-competitive EU network fee proposal

A coalition of more than 50 European consumer and digital rights groups, smaller ISPs and broadcasters have written their names in a joint statement calling on EU policymakers and member states to reject a controversial network fee proposal that would see major telcos in the lobby region.

They suggest that any move to legislate for a mechanism that would channel direct payments to incumbent telecoms would have “immediate and far-reaching” negative consequences for European businesses and consumer interests – arguing that it would reduce costs and consumer choice by diversity and quality of products. and services available online and harm competition.

“The risks of introducing network tariffs are many, but ultimately the biggest threats would be consumer rights, costs and freedom of choice,” they warn. “Internet and mobile network users are the key players in the debate, not content providers. Consumers have access to content (thereby driving traffic and usage), so the compensation would effectively be compensation for consumer behavior and choice.”

Signatories to the statement range from civil society organizations such as Access Now, BEUC, EDRi and the EFF, in addition to ISPs such as Level7, Link Broadband and Total Wireless, plus broadcast groups and publishers such as the Sports Rights Owner Coalition, Motion Picture Association and Wikimedia Europe, to just to name a few.

Major European telcos, meanwhile, want regional lawmakers to let them collect a network fee from Big Tech platforms whose popular services they say are responsible for driving most of the traffic on their fixed and mobile networks – driving demand for a double dip generated (since consumers have already paid for connectivity), such as getting tech giants like Meta and Netflix to contribute what they call a “fair share” of funding network infrastructure costs.

While the likes of Meta backed off saying such compensation would actually be arbitrary and unfair.

The point is that the European Commission, which is responsible for drafting EU legislative proposals, sounds suspiciously sympathetic to the Big Telco lobby.

In February, Thierry Breton, Commissioner for the Internal Market, appeared on stage at a major industry confab, MWC in Barcelona, ​​where Big Telco meets annually to hype the next flavor of connectivity, to personally celebrate the “Web 4.0” connectivity revolution. which he suggested would be speeding up the pipes of carriers.

At the same time, Breton questioned the “traditional model of vertical integration” and told conference participants: “We will have to find a financing model for the huge investments needed that respects and preserves the fundamental elements of our European acquis”, denying the existence of an exploratory consultation on the funding of future networks that the Commission had launched just days earlier. (By the way, the deadline for contributions to this consultation is now just a few weeks away, on May 19.)

While the Commission insists decisions have not yet been made on how the bloc should develop internet connectivity funding mechanisms to ensure infrastructure upgrades enable the next wave of disruptive digital services – says it wants to take a comprehensive look to consider how to move forward go – signatories to the statement concerns the process is biased in favor of Big Telco.

“We welcome the European Commission’s decision to only launch exploratory consultations on the matter, and many of us intend to make contributions. That said, we fear that the litigation could lead to misleading conclusions about the necessity and consequences of a network fee,” they write. “This fear appears to be shared by other stakeholders: leading MEPs have already publicly called this consultation ‘biased’ due to its assumptions and structure, which does not allow all stakeholders to contribute equally (i.e. civil society, consumers, academia compared to ECNs and CAPs).”

The coalition also argues that there is no evidence for the need for such an extraordinary network fee, claiming: “The concept of contribution stems from major internet providers proposing a favorable solution to a problem that has not been identified, justified, or clarified. This ‘solution’ would harm and discriminate against every other part of European business and consumer goods, only to the benefit of major telecommunications providers.”

They also raise antitrust concerns, suggesting that aadditional payments made directly to telecom incumbents would only widen the “profitability gap” that already exists between traditional telecom operators and smaller alternative operators and MVNOs; and against other content service providers that rely on telcos’ networks to provide “essential competition and consumer choice,” as their statement puts it.

The prospect of the Commission taking steps to tighten Big Telco’s grip on connectivity seems at odds with the Commission’s recent moves to regulate Big Tech’s market power, under the upcoming Digital Markets Act. upper echelons of the EU’s executive.

Six MPs (including five MEPs) also signed a separate statement today supporting the Coalition’s concerns about “the Commission’s approach to network fees”. Lawmakers also warn that the proposal could have “unprecedented implications for net neutrality, the health of competition and content, as well as consumer welfare, choice and cost.”

While Thomas Lohninger, of the digital rights NGO (another signatory to the coalition statement), takes aim directly at Breton, writing in another supporting statement: “Never in the last decade has the European Commission been so preoccupied with special interests and demonstrated 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 benefit of the telecom industry.”

So he, oh!

We have reached out to the Commission for a response to the allegations of bias and wider concerns raised about the network fees proposal.

“The threat to competition becomes even more apparent when we take into account the Commission’s proposed recommendation on regulatory promotion of Gigabit connectivity, published alongside the exploratory consultation,” the more than 50 signatories to the joint statement continued. “European alternative operators” have already warned that the draft recommendation would have “detrimental effects on competition, on the EU internal market and on consumer interests”, due to its focus on “increasing the profitability of ex-monopolistic telecom operators (via lighter price control obligations). So the pattern is clear, as is the risk of disproportionately strengthening the power of telecom incumbents, whether through deregulation or through direct contributions.”

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

Update: A spokesperson for the Commission has now responded and sends the following reply:

Firstly, we would like to clarify that the Commission’s current exploratory consultation is neither a Commission “proposal”, nor an “initiative” by the Commission, nor does it indicate a “Commission’s approach” to any of the topics covered in it are touched.

The consultation has a broad objective of mapping Europe’s connectivity infrastructure needs to lead the digital transformation and addresses different topics, such as spectrum and the telecommunications single market, that may need to be addressed to ensure that this infrastructure can be provided.

We need to invest more in more modern and resilient networks across the EU. This benefits EU citizens and businesses that rely on connectivity to provide their services.

As part of this broad reflection, the consultation touches on the issue of a fair and proportionate contribution to the costs of public goods, services and infrastructure. This is a complex issue and any decision must be made on the basis of the underlying facts and figures.

During the exploratory consultation, input will also be collected to evaluate whether other players should contribute to the costs of telecom networks.

Collecting information on this is in line with the Digital Decade 2030 policy program and the Declaration on Digital Rights and Principles, which include the objective that “all market players benefiting from the digital transformation must assume their social responsibility and make a fair and proportionate contribution to public goods, services and infrastructure for the benefit of all Europeans.”

The spokesperson also echoed an earlier claim that:Reopening EU net neutrality rules has never been in question,” added: “The Commission has been committed to protecting a neutral and open internet where content, services and applications are not unjustifiably blocked or degraded, both in Europe and on the global stage. This is enshrined in the Open Internet Regulation and it is also one of the founding 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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