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New EU telecom rules will leave everyone worse off

New EU telecom rules will leave everyone worse off

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Carl Gahnberg is the Director of Policy Development & Research at the Internet Society.

The European Commission has launched a public consultation on new telecom rules that threaten to inflict serious damage on the technology we use to communicate, conduct business and engage with the wider world every day — the Internet.

The announcement of “The future of the electronic communications sector and its infrastructure” was the expected next step in a debate on regulations, which would require online services to contribute to telecom operators’ investments in new infrastructure across the Continent. It’s a response to calls from large telecom operators that content providers — such as Meta, Netflix and Alphabet — make a “fair contribution” to infrastructure investments like 5G.

The logic goes that since a large portion of traffic on the networks is “generated” by these big providers, they should also have to contribute to the infrastructure — however, this premise is fundamentally flawed. Traffic emanating from content providers comes from individual users requesting data, and it is these users paying their Internet Service Provider (ISP) for access to the Internet that drives the traffic — not the other way round.

And if approved, these proposed rules would be a disaster for the Internet as we know it, undermining existing net neutrality regulations, shifting costs to end-users, consolidating the position of big tech companies, and potentially even triggering a fragmentation of the Internet.

While the Commission has not yet produced a concrete proposal, the idea here is centered on an old regime known as “sender pays.” Revealingly, the ideas for this model are inspired by the old telephone system and have rightly been rejected before as outdated for the digital age.

In October last year, the Body of European Regulators for Electronic Communications even published a preliminary assessment on the matter, concluding that there is “no evidence that such mechanism is justified,” and that “such a significant change could be of significant harm to the internet ecosystem.”

The Internet’s brilliant design is that once a network has connected to it, that network is reachable by any user or service in the world. It’s how the Internet reached global scale — one contract is sufficient to reach all parts of it, irrespective of distance or geography.

Thus, the idea that content providers would require a separate contract with a network on the other side of the world to deliver traffic is in direct conflict with the very essence of the Internet. Imagine setting up a website in the United States, India or Brazil, but for European users to access your site, you have to first establish a separate contract with each of their ISPs. That is baffling.

As users, we would no longer be connecting to the global Internet but a network of contractual relationships that our ISP has concluded, and those contracts might not include certain services or countries or even whole regions — it would be an Internet divided according to corporate interests.

Proponents of the new rules may, of course, argue that such concerns are exaggerated. Surely a Google, Facebook or Netflix can just afford the cost?

Perhaps that is the case. But the more likely outcome is that increased costs for content providers would be passed on to consumers, by increasing, for example, the price of streaming subscriptions.

The EU has proved global leadership on key Internet issues, most significantly with General Data Protection Regulation | Manan Vatsyayana/AFP via Getty Images

Further still, the larger impact of a new settlement model would be systemic. As many organizations have warned, it would undermine existing net neutrality regulations and the rights of European users to freely access an open Internet.

In effect, Europeans would only have access to the services their telecom provider reached an agreement with, which would simply consolidate the position of deep-pocketed Silicon Valley giants further, as they would be the only ones who could afford it. And new, emerging content providers would instead focus their investments on other regions of the world.

It’s also hard to not envision this regime broadening. If new regulations are based on the principle that online services must pay for the traffic requested by users, then why not expand the obligations to all services we access on the Internet? It’s a slippery slope, with no way back.

The Internet belongs to no one, which means it belongs to everyone — this we know. But it doesn’t operate in a vacuum either, and regulations matter.

The EU has proved global leadership on key Internet issues, most significantly with General Data Protection Regulation, which has inspired similar rules in other parts of the world. Ironically, Europe has also been a leading supporter of net neutrality, embodied in the Open Internet Access Regulations, now threatened by its own telecoms proposal.

The EU’s position at the vanguard of tech regulation has given it enormous power over how the global community responds to the challenges of the Internet age. But undermining the Internet’s fundamental principles cannot be accepted as collateral damage, and Europe should reject such policies before causing any irreversible damage.

The EU has the power to lead the world here — it just needs to choose the right path.

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