In a move that completely reverses the key notion of network neutrality--that all bits be treated the same on access networks, the EU is considering whether some big app providers should be making payments to connectivity service providers to support infrastructure investment.
A study sponsored by the European Telecommunications Network Operators association claims that a few big app providers represent about 56 percent of the usage of EU access networks, so ETNO wants them to pay as much as that percentage of access infrastructure costs.
ETNO estimates internet service providers in the EU spend about $28 billion on capacity that directly supports the operations of a few big app providers, according to the report published by the European Telecommunications Network Operators association.
The issue for ISPs is that revenue no longer is tied in some direct fashion to use of network resources. In the voice era, usage was basically related to revenue” use more, pay more.
In the internet era, customer data consumption is not directly related to revenue. Customers generally pay for buckets of usage on mobile networks and by speed tiers on fixed networks.
But mobile ISPs sometimes offer “unlimited usage” as well. A flat fee for unlimited usage completely breaks the relationship between usage and revenue.
On fixed networks the pricing is variable based on speed, with some overall usage limitations.
According to ETNO figures, the mobile networks are where the biggest disparity lies.
Traditionally, customers pay for usage of network capacity. ETNO proposes, and the EU is considering, altering that business model by adding third party users to the financial support picture.
Where traditionally “customers” paid for access, ETNO and the EU now also want third party users to contribute. In other words, a few big users would be required to subsidize the access networks. The irony is that this flips network neutrality on its head.
All bits would not be treated equally. Payments would have to be made by some app providers but not all. The “threat” of such unequal treatment, which net neutrality laws were intended to address, now would be embraced by policymakers.
Where financial payments for use of the access network were outlawed for consumer access, in order to “protect” freedom, now regulators propose precisely a remedy that authorizes unequal treatment of bits, albeit in the guise of infrastructure support.
There are other ironies. The “threat” to internet freedom was said to be the ISPs who could act as “gatekeepers.” Recent evidence has shown that the actual gatekeepers of content expression and freedom are the major app providers.
Though in principle none of the network neutrality or proposed network unequal treatment rules directly address freedom of expression directly, they do so indirectly, by creating unequal costs to reach consumer end users.
In the end, as EU policymakers now have been on both sides of the issue, it is clear that winners and losers within the internet value chain, and the costs of doing business for participants in different segments of the business, is the real issue.
Earlier net neutrality rules were supposed to prevent ISPs as “gatekeepers” from distorting freedom and access. Now the EU considers policies that see a few big app providers as the true gatekeepers, and hence propose the reverse set of measures to prevent distortion.
The other issue is that trade policy and perceived support for domestic industries also is involved. European policymakers long have noted that internet innovation happens in China and the United States, not Europe.
The latest set of rules would have the effect of placing hurdles on U.S. firms that could indirectly aid EU domestic app and content providers as well as domestic telcos.
It always is true that for every valid public policy purpose, there are corresponding interests. It is never more obvious than in considerations of how access infrastructure is supported.
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