EC Enters Debate Over Fees for Carrying OTT Content

Whether over-the-top players should pay telcos for carrying their content has been a hot topic in Europe for some time (see 2210130001), and the European Commission waded into the fight Thursday. As part of a proposal to transform the EU connectivity landscape, it's consulting on the future of the electronic communications sector and its infrastructure. The inquiry brought expected cheers from mobile operators, jeers from the tech industry.

This is a time of "marked technological disruption," Internal Market Commissioner Thierry Breton noted at a briefing. It's also a time of "outright war on our continent," not only from Russia's invasion of Ukraine but also from cyberattacks, he said. In addition, there's also a tremendous amount of data from streaming and other services, networks are no longer just land based, there are 5G, 6G and fiber networks, and there's a continuing need to maintain telecom competition.

All this means telecom network architecture must be urgently transformed, Breton said. The consultation on the future of the sector seeks feedback on what infrastructures are needed and how to ensure the necessary investment in them. Internet content and app providers have been developing attractive products at a time when there's pressure on operators' finances, giving rise to questions about "fair share" payments for network use, he said.

The EC intends to maintain the key principle of net neutrality but wants to identify new mechanisms, such as fair contribution, which would guarantee fast deployment of new networks while preserving competition, Breton said. He refused to signal where the EC stands on fair contribution now, saying it wants to hear from all stakeholders first. He denied fair contribution is a way to introduce a digital tax through the back door. The inquiry also asks whether Europe's telecom market and spectrum management policy should be more harmonized. Comments are due May 19.

The inquiry is a "positive and urgent step toward addressing major imbalances in the Internet ecosystem to the benefit of European end-users," said the European Telecommunications Network Operators' Association. The GSM Association praised EC "leadership in initiating an honest discussion about the role that companies benefiting the most from use of European networks should play in contributing to infrastructure investment in Europe."

The tech sector, however, worried the EU has already bought into the telcos' demands. "If big EU telecom operators get their way, tech firms would be forced to pay network fees whenever they respond to users' requests for internet data," said the Computer & Communications Industry Association. The consultation questionnaire "already appears to accept that false 'fair share' premise pushed by big telcos."

The connectivity package includes a proposed Gigabit Infrastructure Act. The regulation would boost rollout of advanced networks such as fiber and 5G by simplifying deployment. Among other things, Breton noted, it would require new and renovated buildings to be fitted with fiber; cut administrative costs and the burden of permit procedures; and facilitate coordination of civil engineering works needed to deploy networks.