A negotiation model on "fair share" is a back door to give telcos what they want!

On October 2nd, 20 CEOs of European telecoms operators published an open letter on the future of connectivity. Calling for a “Fair Share legislation” and warning that “Europe must act to protect its digital future”, the aim of the letter was to remind everyone that they are not going to back down: telcos want big tech to give them money and insist that the European Commission recognizes them this right even if it means breaking network neutrality, changing the way interconnection agreements are made and work and, effectively, putting the Internet model at risk.
 
The letter repeats some untruths; for example, this idea about the presumed investment gap or the fact that “fair share” and network neutrality rules are compatible; it also persists on mistakenly calling content and service platforms “large traffic generators”. I understand it is meant to sensationalise the debate, but it is fundamentally wrong; (I have lost the number of times this mistake have been addressed; users generate traffic and, it is users who pay telcos for access to the services of these platforms. This is a fact!)
 
Effectively, the letter says nothing new and, I am, frankly, surprised it was picked up so fast by the Financial Times. It goes to show the power dynamics that are at play in this debate as other, more objective, letters have not had this type of coverage. 
 
The letter, however, serves an additional purpose – it gives support to the European Commission to continue pursuing this unwanted file. It has now been more than 20 weeks since the closing of the European Commission’s consultation on “fair share” and, nothing has been made public yet. With a rumored number of around 450 submissions and, the fact that the Commission outsourced their analysis, it is really unreasonable that the comments outcome summary are still not released. I think we can assume that the Commission does not like what Europe’s stakeholders have said. Yet, without the results we cannot be certain. (If you ask me, I bet that European users have not given the mandate to the Commission to proceed with this policy). 
 
One part I found interesting in the letter is the following: “The European Commission has been clear that any regulatory mechanism would be implemented in full compliance with Net Neutrality rules. We agree. In addition, it should be stressed that the underlying objective of the Open Internet regulation is to ensure unfettered access to the internet for end-users. This objective is undermined by the lack of investment capacity on the part of telecoms companies, jeopardizing the build-out of new capacities in the network, so that operators can meet the data growth. An obligation to negotiate with operators a fair and adequate contribution, with a dispute resolution kicking in if negotiations fail, would help alleviate this challenge.”
 
I am not going to engage on the network neutrality argument again because we have a very clear picture of how network neutrality is interpreted in Europe and it comes from two decisions of the European Court of Justice (ECJ) – both technological and economic discrimination are against the Open Internet regulation. The end. The European Commission can make any statements to the contrary but between the Commission and the Court, I would go with the Court.
 
The point that caught my attention, though, is the idea of imposing a requirement for negotiations between telcos and big tech. (This is not new; but, for some reason this time around, I read it as an indication of where things may be heading.) 
 
So, here are some thoughts about a negotiation process:
 

• This is not novel. It has been used as a tool in the context of media laws around the world, creating a requirement for big technology companies and news publishers to sit at the negotiating table. Australia was first, but Canada, the US, France, Brazil and other parts of the world, are considering or have already put in effect such laws.
• Even though it is like comparing apples and potatoes when it comes to the substantive parts of the two issues, telcos want to ‘copy, paste’ the process of negotiations. Here’s what we know though about how the negotiations have evolved in Australia, according to some researchers: “At the same time, there is not a list of new organizations that the platforms are required to deal with, leading to ambiguity as to why some news publishers receive funding and not others, and concerns about a hierarchy among news businesses between the most powerful who are able to negotiate deals, and others who are set aside. In general, there are concerns about a lack of transparency in the bargaining process under the Code.” Now, replace “news publishers” with “telcos”. 
• The negotiation process in Australia’s Bargaining Code may be mentioned in the law, but it is not mandated; it is voluntary. 
• The fact that such negotiations involve deals that are commercial-in-confidence, we will not be able to learn what it is discussed, what compromises have been made and how they may affect consumers or the Internet. Australia’s negotiation model may offer more than 2 years of use, but no formal documentation of these deals has ever been made public given the fact that they fall under commercial confidentiality agreements. Is this what we want from a law? To sanction unaccountable and non-transparent processes? At the end of the day, what real purpose does it serve?

Once again, it sounds like the negotiation model telcos are portraying as the way forward is not all it’s cracked out to be.

The conversation on “fair share” is far from over. The Commission is running out of time, given the election cycle next year, so we should expect that we will see something pretty soon. At this stage, it’s anyone’s guess which way they will be heading. But if there is a chance that the negotiation model is where the Commission may seek compromise, it changes nothing. It is what telcos wanted all along and they will be getting it through the back door.