November 9, 2023
On 10 October 2023, the Commission published a summary of the responses to its exploratory consultation on the electronic communications sector launched in February 2023. The consultation and responses, coming from a wide range of businesses, civil society organisations, public authorities, consumers and academics, cover issues under four headings: technological and market developments, fairness to consumers, barriers to the single market and fair contribution by all digital players.
The Commission’s key takeaways include the identification of technologies that will have a significant impact on the electronic communications sector, such as network virtualisation, edge cloud, artificial intelligence and open networks, the scale of the investment in connectivity infrastructure that will be needed over the next five years, increasing costs associated with cybersecurity and network resilience, and the need to streamline relevant EU-wide regulation.
The issue of net neutrality was raised in the consultation. Commenting on data traffic trends, respondents provided their views on which businesses are the current primary contributors to network traffic, mentioning Netflix, Facebook (on mobile), Google, TikTok, sports streaming services, popular porn sites and Hulu. The section of the consultation on fair contribution by all digital players raised issues around the ability of electronic communications networks (“ECNs”) to charge digital players for increased data traffic (over and above the charges some ECNs currently impose on content providers). The consultation asked whether digital players benefitting from the digital transformation should contribute in a fair and a proportionate manner to the costs of public goods, services and infrastructure, and about the introduction of mandatory direct payments from content application providers and large traffic generators (“LTGs”) to support the financing of network deployment.
In its response, the ECN providers highlight obstacles to their ability to impose charges arising from imbalanced bargaining power between them and the LTGs and call for regulatory intervention to ensure LTGs are required to pay based on the traffic they generate. ECN providers argue that LTGs generate revenue without contributing to network cost, while ECN providers struggle to recover investment. NGOs, consumers organisations, academics, content providers, broadcasters, digital platforms and consumers opposed mandatory fees, some of them citing the risk of breaching the principle of net neutrality (the principle that traffic carried across networks (both broadband and mobile) is treated equally and that certain content and services are not prioritised, slowed or favoured over others) if such a payment mechanism were adopted.
The European Commission has since announced plans to bring in new EU telecoms legislation, but it is not yet clear how this might approach the imposition of network fees on content application providers.
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