Internet Fragmentation > “Fair Share” Proposal in the EU

A Fragmented Digital Future for Europe?

^{Region: Europe
Threat type: Regulating Business Relationships
Last updated: 1 December 2023}

The EU’s “fair share” model will force large platforms to pay more, and it will fragment the Internet.

In 2022, the European Telecommunications Network Operators’ Association (ETNO) revived an old debate about who should be paying for network traffic. The European Commission responded by launching a public consultation on this issue, which concluded in October 2023.

Network operators argue that content providers are “free riding” on their network, and that this is a market failure that needs to be addressed with policy. These operators want to charge large companies a fee that they say is needed for the expansion and improvement of network infrastructure. However, there is no market failure.

On the surface, it might sound like a reasonable way to counteract market consolidation, to ‘tax’ those that send more traffic than they receive. But this thinking is fundamentally flawed. The traffic is not created by online services, it is requested by Internet users. It is this traffic that users pay for in their Internet subscription, just as the online service pays for their own Internet access to send it. In other words, there is no service free-riding on the Internet because the access and data fees are already being paid.

In practice, it would also mean that anyone providing services online may need a separate contract with every ISP their customers might use, which would result in fragmented connectivity—and not everything would be equally accessible. This also creates administrative and financial burdens that undermine their ability to operate globally. And, it means that large ISPs have a built-in advantage over smaller players, which harms competition.

These charges also violate the principles of network neutrality. Like the sender pays proposal in South Korea, this approach to network traffic would not improve the network and would end up affecting the quality of services. The result could also mean higher usage and connectivity costs for the average Internet user in Europe. So even if this policy is intended to create a fairer landscape, the effect is the opposite.

One of the main challenges is that in order to understand the magnitude of this threat, it requires more knowledge about the Internet than the average person can be expected to have. But it would require every service you use as a consumer to have a separate contract with your ISP. If not, you would not be able to connect—and that is a fragmentation of the Internet.

For example, if you run a small business and use an email or cloud service, that service would need a contract with your ISP in order for you to use your email or store your files. That cost would most certainly be passed on to you. If the ISP and the service provider don’t negotiate, you might lose access to that service, or get slower, less reliable performance. This would undermine net neutrality, and turn the network of networks into a ‘network of contracts’. This would damage the Internet itself.

Status

This proposal is broadly opposed across academia, regulators, small and medium-sized ISPs, IXPs, civil society organizations, consumer advocates, and content providers. In other words, almost everyone, apart from the largest network operators, sees this as a potentially damaging decision. Even smaller ISPs would be at a disadvantage, and anyone who sends a large amount of traffic would find it difficult to compete globally, or even with larger players within Europe.

The public consultation’s results were published in October 2023. The ‘fair share’ model was clearly rejected by a majority of those who responded. Moreover, most of the European Parliament is also opposed to this. But because the large operators have broad influence, and they’ve been arguing for some form of this for almost two decades, we can’t afford to turn our attention away.

Our Position

This policy would undermine most of the principles of the Internet Way of Networking that make the Internet valuable to all of us. We believe that this isn’t just a policy that would also contribute to fragmentation—it is, at its core, intentional fragmenting of the Internet, which would serve nobody.

We’ve done an Internet Impact Brief on a similar case in South Korea, made contributions to the public consultation, and we’ve written and advocated across the media and our own stakeholder communities.

Talking Points

People who use the Internet already pay for their connectivity, and so do the businesses that provide services on the Internet. That means there is no market failure—everyone is already paying and getting paid.
It sounds like a good way to keep large platforms in check, but only the largest telecom operators actually benefit from these policies. They already have a significant monopoly on traffic termination, and this would give them even more room to exploit that.
Right now, it is enough to be connected to the Internet, and in doing that, you can be part of this global network of networks. These rules break that idea, and fragment the Internet as we know it.

Take Action

Join our community as an individual or organization
Donate
Use the Internet Impact Assessment Toolkit to understand what the Internet needs to exist and thrive
Become an Internet advocate