EU lawmakers slam “radical proposal“ to let ISPs demand new fees from websites

Fifty-four members of the European Parliament (MEPs) are protesting what they call a “radical proposal” to require payments from online service providers to Internet service providers.

Noting that Europe’s 2015 “Open Internet Regulation ensures that citizens are free to use whichever apps and websites they wish,” the MEPs said they have “deep concern about the European Commission’s plans to change our net neutrality legislation in the upcoming Connectivity Infrastructure Act to be proposed in autumn, without having consulted the public, technology experts, academics, civil society, or expert regulatory agencies.”

No specific proposal has been released, but “statements to the press indicate that a new provision would require payments from online service providers to broadband providers—ostensibly to fund the rollout of 5G and fiber to the home,” the MEPs wrote in the letter yesterday to the European Commission.

The letter cited a May 2 Reuters article that said, “Tech giants such as Google, Meta, and Netflix may have to bear some of the cost of Europe’s telecoms network, Europe’s digital chief Margrethe Vestager said on Monday, following EU telecoms operators’ complaints.” The MEPs’ list of references also includes two Ars Technica articles from 2012 when a similar proposal was being discussed.

Vestager reportedly said at a news conference that “there are players who generate a lot of traffic that then enables their business but who have not been contributing actually to enable that traffic. They have not been contributing to enabling the investments in the rollout of connectivity… and we are in the process of getting a thorough understanding of how could that be enabled.”

European ISPs sought payments from Big Tech

Despite claims by some that Big Tech gets a “free ride,” websites and other online service providers pay for their own Internet access and in some cases build extensive network infrastructure to carry Internet traffic part of the way to broadband users. But ISPs that deliver content directly to Internet users over the so-called “last mile” of the network have clamored for extra payments from websites to help cover their costs, in addition to the payments they already get from home and business Internet customers. In November 2021, the CEOs of 13 large European telecom companies called on tech giants to pay for a portion of the Internet service providers’ network upgrade costs.

“Large telecom companies have tried for decades to require compensation from content providers for providing access to customers, despite the fact that the telecom companies are already being paid by their own customers to provide access,” the 54 members of the 705-seat European Parliament wrote. Letting ISPs collect these payments “would reverse decades of successful Internet economics by requiring the providers of websites and applications to pay fees to ISPs that have never existed before,” and “abolish key net neutrality guarantees that Europeans fought hard for,” they wrote.

Complaining about an alleged lack of transparency, the letter said, “no one outside the Commission has been able to evaluate the announced proposal of access fees. To us it sounds very similar to ones that have been rejected many times already.”

The 2012 European proposal was ditched, and “every strong net neutrality regime has banned these fees, including in the EU, India, the US, and California,” they wrote. (US net neutrality rules were repealed, but the California ones remain in effect after judges rejected ISPs’ attempts to overturn them.)

MEPs warn against broadband monopoly power

The MEPs’ letter further argued that charging websites for access to broadband consumers would help ISPs abuse their monopolies:

Adopting a model that allows for or mandates access fees would be a disastrous return to the economic model for telephony, where telecommunications companies and countries leveraged their termination access monopolies to make communication expensive. Because phone companies had a monopoly over their customers, they could charge exorbitant prices to anyone seeking to call their customers.

Broadband providers have the same monopoly over their customers. Allowing them to charge content providers for access could cause significant harm to the Internet economy.

The MEPs also doubt such fees would improve broadband connectivity, saying that “factors such as permits or construction capacities can act as more severe barriers than lack of funding.” They urged the European Commission to take its time and open an official consultation, saying, “There is no emergency that requires action in autumn 2022.”