March 23, 2023, 11am-12:30pm
'Fair Share' or an 'Internet Traffic Tax'? The EU Telcos vs. 'Big Content' Debate and its Global Implications
The peering and transit model of interconnection has been a key building block for the Internet’s spectacular growth. But over the past decade, the major European telecommunications carriers have sought to move the EU toward a system under which the major content suppliers would be required to pay them volume-based fees for delivering content to their customers. The telcos argue that accommodating today’s explosive growth in network usage, especially for video on demand, requires broadband investments that they cannot afford to make without receiving mandatory payments from ‘Big Content’ originators. Accordingly, they have pushed at both the multilateral and regional levels for legally required ‘fair compensation’ by these originators for the use of their networks. The European Commission has welcomed this proposal in the context of its far-reaching Digital Agenda that has emphasized industrial policy and the regulation of US-based tech giants in the name of building Europe’s ‘digital sovereignty.’ In time, such fees also could target emerging data-intensive domains like the metaverse.
In response, the European telecom regulators and some other governmental entities, corporate suppliers and users, industry associations, the Internet technical community, civil society organizations, and others have mobilized against the telcos’ proposal. The critics argue that the the proposal constitutes a Sending-Party-Network-Pays (SPNP) system that is contrary to the traditional peering model; content providers already invest heavily in infrastructure build-outs and the telcos are already adequately compensated by their customers; the mandated compensation could negatively affect many actors beyond Big Content; the proposal is contrary to network neutrality and would require further regulations that could favor incumbent carriers; and that an EU shift to SPNP could ripple across the the global Internet. Amidst this heated debate over whether the telco proposal constitutes ‘fair compensation’ or rather an ‘Internet Traffic Tax,’ the EC is running until May 19 an online open consultation on electronic infrastructure in advance of considering legislation.
This webinar, by the Columbia Institute for Tele-Information, assembles a panel of leading expert participants in the raging debate. The group will lay out the merits of the respective arguments; assess the compatibility of SPNP with other policy frameworks and objectives; discuss alternative options for funding broadband rollouts and digital transformation; and in particular, consider the potential implications of EU adoption for the global Internet environment and digital governance.
As always, the panelists’ conversation will be followed by an open dialogue among all participants.
Introduction
Eli Noam, Paul Garrett Professor, Emeritus, and Director of the Columbia Institute for Tele-Information
Moderator
William J. Drake, Director of International Studies at the Columbia Institute for Tele-Information
Roundtable Panelists
Rudolf van der Berg is a Partner at Stratix Consulting. Previously, he was a regulatory affairs manager at Tele2, a senior policy advisor at the OECD, a management consultant at Logica Management Consulting, and a policy manager at the Dutch Ministry of Economic Affairs. (Netherlands)
Michael Kende is a Senior Advisor for Analysys Mason consulting and a digital development specialist with the World Bank Group. Previously he was the Chief Economist at the Internet Society, and a Visiting Lecturer at the Graduate Institute of International and Development Studies. (Switzerland)
Maarit Palovirta is the Senior Director for Regulatory Affairs at the European Telecommunications Network Operators' Association, ETNO. Previously she held manager roles at the Internet Society and Cisco Systems and worked in well-known Brussels based consultancies.