NTIA, Tech Groups Oppose Potential EU Network Usage Fees

There is “substantial risk” in enforcing mandatory direct payments to telecom network providers, “especially absent mandatory, enforceable obligations on how such payments are spent,” said NTIA: “Enforcing mandatory payments on a subset of traffic generators could be discriminatory and degrade equal access to the Internet, thereby endangering the principle of Internet openness/net neutrality.” Citing findings from the Body of European Regulators for Electronic Communications (BERC), NTIA said such a model “would provide ISPs the ability to exploit the termination monopoly and it is conceivable that such a significant change could be of significant harm to the internet ecosystem.” NTIA cited other studies showing similar policies in South Korea created “unnecessary costs and bottlenecks.”

Mandating such payments without spending requirements might reinforce the dominance of the largest network providers, said NTIA: “It could give operators a new bottleneck over customers, raise costs for end users, and alter incentives for CAPs/LTGs to make efficient decisions regarding network investment and interconnection. It is difficult to understand how a system of mandatory payments imposed on only a subset of content providers could be enforced without undermining net neutrality.”

The Computer & Communications Industry Association, the Information Technology Industry Council and the Information Technology and Innovation Foundation all made similar arguments to the EC. Treating data “differently” would undermine net neutrality, traffic fees would harm the EU’s digital transformation, and South Korea’s “failed experiment” provides ample evidence for why network usage fees would harm Europeans, said CCIA. EU regulations require ISPs to treat all internet data equally, based on the principle of net neutrality, said CCIA.

“We are concerned that network fees are even being considered in this debate,” said ITI Director General-Europe Guido Lobrano. “Those fees would not only be unjustified, they would also fundamentally change the internet as we know it. Network fees also hamper innovation by diverting resources away from other important investments, ultimately leaving European consumers and businesses with higher costs and fewer choices for services and content.” ITI said the EC’s questionnaire “risks prematurely narrowing the discussion by asking leading questions towards a predetermined outcome.”

Traffic-based fees would create a “perverse incentive wherein popular content providers would be punished for providing outsized value to the Internet, the largest ISPs would get a regulatory thumb on the scale, and consumers would bear the brunt of the costs,” said ITIF.

An academic accused NTIA of parroting arguments from tech trade associations to promote Big Tech’s “free ride” on global broadband networks. “The American people deserve better than an executive branch agency which appropriates industry reports as official US government positions,” said Roslyn Layton, Strand Consult executive vice president and visiting researcher at Aalborg University. European telecos are asking the EC to support “market-based negotiation with Big Tech,” she said. She noted Netflix argued it has “no obligation to pay or negotiate for the use of broadband providers’ networks,” and Meta “simply stopped paying with Deutsche Telekom.” The tech platforms believe they're “entitled to a free ride” and disrespect “other’s property rights,” she said.