Network fees: why should content providers pay a tax for internet infrastructure?
The FIAD Secretariat attended a panel discussion in the European Parliament hosted by MEP Verheyen (EPP-DE) on 9 February. Guests speakers representing news publishers, VOD platforms, Broadcasters and public institutions had the opportunity to exchange on the expected Commission proposal on Network fees. While waiting for the public consultation to be published officially, participants explored the principles at play when discussing such a fee and reasons why it should be rejected. Telecom operators are supporting the idea of introducing an obligation (fee) for content providers generating high online traffic volume to invest in internet infrastructure.
Panel speakers highlighted 3 main points against the obligation.
The introduction of a network fee is not justifiable on an evidence basis: even if internet traffic is indeed increasing, this isn’t true to the point of having to impose obligations on content providers that will be reflected on final consumers. Even during peak traffic time, the capability of the infrastructure is far from being affected, as on average, consumers consume 2 to 3 mbps per second while their service should have 100 mbps capacity. An Oxera report expected by the end of February 2023 confirms these findings. The introduction of such a fee should be supported by evidence that is simply not there. This point was shared among panelists and supported by the interventions of Dr. Lukas Wiewiorra, Head of Department "Markets and Perspectives" at WIK-Consult and Jorn van Steenis, Dutch Ministry of Economic Affairs and Climate Policy.
Content providers already invest in infrastructure technology: The European VOD coalition, represented by Giulia Iop, EU Policy Manager at SKY, highlighted the fact that content providers such as VOD platforms already invest in infrastructure technology such as content delivery networks, compression technology, caching, and much more. She added that, it is also important to consider that the fee would limit creative content providers’ capacity to invest in production and distribution.
Finally, a network fee would undermine the net neutrality principle: (So far defended by the EU). A fee for content providers would distort the market as it could establish preferential treatment for large data generators, said Philippe Meistermann, Bundesverband Digitalpublisher und Zeitungsverleger e.V.
Closing the panel, MEP Verheyen highlighted that, although there is indeed a lack of investment in internet infrastructure, the answer should not be found in the introduction of fees or other measures distorting the digital market. Public agreement and lengthy permission processes might have a role to play as well. She continued, confirming that net neutrality also needs to be maintained to safeguard media freedom and access to information.