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There is an informal Ministerial Council meeting happening April 11, where telecoms ministers from the EU’s block will discuss, among others, the White Paper “How to master Europe’s digital infrastructure needs?”, which was published back in February.
Commissioner for Internal Market, Thierry Breton, had promised the release of a White Paper after his legislative campaign on network fees died last year. Just like he did with his proposal on network fees, he chose the Mobile World Congress in Barcelona to announce the White Paper’s release. This was not a coincidence; just like the network fees proposal, the audience of the White Paper is mainly the big five European telcos. Much like other countries around the world, Europe has set some targets for the Digital Decade. And, much like other countries around the world, these targets are ambitious. This is not necessarily a bad thing as long as Europe understands that, for achieving these goals, it will need to provide the necessary legal and economic incentives. Fostering sustainable economic, environmental and social benefits across Europe through digital transformation can only be achieved through collaboration and an ecosystem that is open, non-discriminatory and proportionate. The White Paper is nothing of sorts. There are a lot of issues in there that require the attention of everyone – spectrum allocation, critical submarine cables, development of 5G networks but there is hardly any attempt to lay down the complexity of these issues and outline the need for collaboration. It is a paper that points to the right things, yet it does so through the wrong lens. Telcos are part of the ecosystem; they are not the ecosystem. The White Paper aims at rethinking and broadening the scope of the current European electronic communications regulatory framework. One of the stated objectives is to address what is perceived as an uneven regulatory ‘level playing field’ between traditional telecom providers and cloud and other providers. The idea is to cover every provider of EU core networks and all networks on which public data transits, including a broad range of sectors and providers. The White Paper has a lot of problems in outlining a forward-looking strategy and, once again, the Commission is asking member states to buy into a half-cooked idea. The problem with this idea of course is that it will always be unconvincing because it seeks to advance telcos at the expense of an entire ecosystem – with its good actors and not so good ones. But, does this provide enough justification for the Commission to push an unpopular idea? For instance, the White Paper obviously cannot answer the impact such a drastic reordering of interconnection will have on certain networks. There are types of core networks which are private and they are currently regulated under the European Electronic Communications Code (EECC) as ‘electronic communications networks’. Beyond those, depending on the interpretation of the high level wording in the White Paper, this extended scope of regulation could apply to a whole host of entities including cloud providers, content delivery networks, organisations active in the IP interconnection market and their customers, Internet Exchanges, etc. Is this really the intention? The White Paper takes aim at interconnection even though there is no evidence that the interconnection market in Europe suffers. In fact, the White Paper notes: “There are very few known cases of intervention (by a regulatory authority or by a court) into the contractual relationships between market actors, that generally functions well and so do the markets for transit and peering.” However, the Commission is making the assumption that things may change in the future. “[…], it cannot be excluded that the number of cases in the future will increase.” Making assumptions on a range of markets that have evolved very rapidly in recent years, and continue to evolve fast, is one thing. Moving from these temporary, preliminary assumptions to suggesting major regulatory changes deserves much more serious consideration, scrutiny and stakeholder debate. In order, therefore, to prevent this scenario, the White Paper suggests a whole set of changes for a host of different actors in the Internet’s infrastructure chain. For the Commission, change means regulation which would entail a number of new burdens like some form of legal interception of users’ communications, new reporting and security requirements and the likely payment of universal service fees (a form of ‘network fees’). Yes, you heard it right – all this fuss is about making sure that telcos end up getting their half-cooked and rejected “fair share” proposal. Last year, an entire European ecosystem comprised of governments, small and big businesses, civil society groups, individuals, researchers, startups – all rejected the idea of direct payments from content providers to telcos. The reactionof BEREC, the independent body of European regulators, was also clear about changing the interconnection landscape in favor of telcos: “[t]he “sending party network pays” (SPNP) 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.” The problem with bad ideas, like the one on network fees, is that they persist almost as readily as good ideas. Bad ideas have a long life and they have the tendency to outlive their originators. This is also true in this case as Europe’s bad idea has now taken a life of its own around the world, in countries like India, Brazil and elsewhere. There is no doubt that the tension between over the role telcos should have in the infrastructure of the Internet will be one of the defining Internet policy issues for the next couple of years. Comments are closed.
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