Consultation prior to the EU regulation on shared network costs.

12 January, 2023

The European Commission will perform a public consultation to gather the opinion of the different areas of the technology sector, to shortly legislate on shared network costs.

This consultation, which will be published next month, will be conducted before the EU establishes a regulation in this respect.

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Why does Europe want to make platforms like Google or Netflix pay shared network costs?
What are network costs?
Who is called to the consultation?
Purpose of the consultation.

Why does Europe want to make platforms like Google or Netflix pay shared network costs?

It has been almost a year since the main European operators, through a joint letter, demanded that the ‘digital giants’ pay for the use of the networks or invest in them.

Thus, the EU listened to their demands and that is why this consultation will be carried out. Its purpose is to find out the opinion of all the parties involved, on the payment of shared network costs to platforms such as Netflix, to compensate telecom operators for network costs associated with the data traffic generated by these platforms.

What are network costs?

The operators are responsible for maintaining and paying for the existing and new network infrastructures. In other words, fully assuming the costs of the network, for example, the installation and maintenance of cabling, routers, etc., needed for the transmission of the data.

The problem that operators claim is that these costs are high, so they want to pay for the use of the networks.

Consultation prior to the EU regulation on shared network costs.

Who is called to the consultation?

Telecom operators like Deutsche Telekom, Orange, Telefónica or Telecom Italia are in favour of conducting this regulation. Their main reason is that this measure is equitable since it would mean the payment of a ‘fee’ by the ‘digital giants’ that use their networks, whose traffic is estimated at almost half of the total.

On the contrary, and in disagreement with this regulation, there are the largest technology companies or digital giants such as Google, Netflix, Meta or Amazon, among others. They indicate that this idea is like a tax that could affect European rules about network neutrality, which aims to treat all consumers equally.

Purpose of the consultation.

The purpose of the consultation is to gather information on all the parties involved concerning shared network costs and their impact on the European market. The information collected will help the European Commission to establish an appropriate legislative framework to address this matter.