The difficulties faced by EU telcos to bridge the large investment gap to reach the Union’s Digital Decade connectivity targets have led policymakers to propose various solutions. The possibility of the largest content providers compensating EU telcos, also known as ‘fair share’ or ‘telco tax’, has sparked a fierce debate. How the problem is resolved will have significant consequences for the EU’s strategic autonomy goals.
Telecommunication infrastructures are critical sectors for the EU’s strategic autonomy. A recent consultation launched by the European Commission on the future of the connectivity sector and the possibility of introducing a ‘fair share mechanism’ or ‘telco tax’ to content providers in data traffic has sparked a fierce debate between telco companies and big techs. This paper argues that the issue is not only an economic challenge. It also impinges on core aspects of the EU: political competition across Member States, security concerns, consumer protection, internal markets and international positioning.
Telecommunication infrastructures are a key element for the EU’s strategic autonomy. However, several challenges have arisen that hinder the achievement of the Digital Decade’s targets. In the case of telecommunication infrastructures, a funding gap of €174,000 million by 2030 has been identified, which might lead to approximately 45 million people in the EU being left without broadband by that time, according to the European Telecommunications Network Operators’ Association (ETNO). In turn, there will be an increasing need to raise the volume, speed and capacity of telecommunication infrastructures to allow content flows across the Union, due to a more intensive use of networks and highly advanced technologies, such as Augmented and Virtual Reality, and IoT. That is why the European Commission has launched a consultation on the future of the connectivity sector. Several solutions have been put forward, namely a review of the EU’s telco regulatory framework, the introduction of efficiency obligations for content providers in data traffic and the so called ‘fair share’ or ‘telco tax’ –or ‘cost recovery’, as launched in South Korea–. The ‘fair share’ proposal has sparked a fierce debate, with big telcos, southern European Member States, some MEPs and members of academia supporting the idea, and other telcos, big techs, northern European Member States, some MEPs and NGOs arguing against the detrimental effects such an initiative could lead to –such as the violation of ‘net neutrality’ and favouring a special fund, in the event of a compensation mechanism being introduced–. We argue that measures need to be adopted to reinforce the position of EU telcos, if the Digital Decade’s targets are to be reached. In particular, we consider it necessary to reform the EU’s telco regulatory framework, as well as introducing efficiency obligations for data traffic. Regarding the ‘fair share’ debate, we argue that it is unfair to say that the proposal is only an economic issue and that instead it should be analysed from a multifaceted perspective that eventually refers to the EU’s goal of achieving its strategic autonomy and that of its Member States.
The relevance of telecommunication infrastructures for the EU’s strategic autonomy and the challenges ahead
The key role of telecommunication infrastructures for the EU’s strategic autonomy
Telecommunication infrastructures have long been perceived as a purely economic issue. That is correct, but not enough. Much of the EU’s ambition to set out its own strategic autonomy approach is at stake when it comes to telco infrastructures. These are critical assets that largely impinge on security, economy, and rights and values, and whose strategic approach defines the shaping of a strong, resilient and fair European internal market and its external policy agenda with third countries. Also, network capacity infrastructures are closely related to social challenges such as the inequality gaps generated by the lack of networks in rural areas. This is something that has been raised by the EU Declaration on Digital Rights and Principles as an axis of solidarity and inclusion within the Union, and by the Conference on the Future of Europe, which proposed access to digital infrastructure as a key action line by citizens.
It is not by chance that the Digital Decade Policy Programme 2030, launched in December 2022, sets out the achievement of secure, resilient, performing and sustainable digital infrastructures as one of its four paramount goals. One of its objectives is that ‘all end users at a fixed location [ought to be] covered by a gigabit network up to the network termination point, and all populated areas [should be] covered by next-generation wireless high-speed networks with performance at least equivalent to that of 5G, in accordance with the principle of technological neutrality’.
This aim falls back on the 2021 Digital Compass and is guided by: the principles of a human-centred, fundamental rights-based, inclusive, transparent and open digital environment; the need to ensure the Union’s digital sovereignty; support for the competitiveness and sustainability of its industry and economy, in particular of SMEs; and the importance of reinforcing Member States’ collective resilience and reduce the geographical digital divide.
The first annual report on the ‘State of the Digital Decade’ is planned to be adopted in June 2023, which will contain the trajectories along which progress will be tracked. Within nine months’ time, Member States will present their first national strategic roadmaps, thus launching the cooperation cycle on the Digital Decade. However, evidence shows that the materialisation of these goals is progressing, although it is still only halfway there.
The challenges to achieve the Digital Decade’s targets
The Digital Decade Policy Programme aims to develop an ecosystem of interoperable digital infrastructures, with convergence across high performance, edge, cloud, quantum computing, artificial intelligence, data management and network connectivity. Nonetheless, the objective of having 10,000 edge nodes by 2030 is still far removed from reality, although it remains difficult to identify the specific features of one edge node. Also, the Important Project of Common European Interest (IPCEI) on Next Generation Cloud Infrastructure and Services is facing delays and limitations in its implementation due to an expectations mismatch in funding and governance issues across the participating Member States, among other problems. IPCEIs are intended to support projects that ‘overcome important market or system failures’ or ‘societal challenges’ that prevent the project from being developed ‘in the absence of the [state] aid’; that is, states intervene when the market cannot deliver alone.
In the case of telecommunication infrastructures, several challenges have also raised: a funding gap of €174,000 million has been identified by 2030, which might lead to around 45 million people in the EU being left without broadband at that time, according to the European Telecommunications Network Operators’ Association (ETNO). In turn, there will be an increasing need to raise the volume, speed and capacity of telecommunication infrastructures to allow content flows across the Union, considering the demographic upsurge, the rate of usage of digital devices and the intensification of new technology applications such as 5G, 6G, Virtual Reality, Augmented Reality, Mixed Reality and next-generation communications.
These economic and technological factors add up to the Digital Decade 2030’s aim to facilitate fair and non-discriminatory conditions for users, to strengthen the synergies between private and public investments, and to ensure the Union’s digital sovereignty in an open manner, in particular by secure and accessible digital and data infrastructures capable of efficiently storing, transmitting and processing vast volumes of data that enable other technological developments.
The European Commission’s answer: the Connectivity Package
In this context, Thierry Bréton, the Commissioner for the Single Market, argued in 2022 that ‘high-speed Internet requires high investments. This is why, in addition to facilitating network deployment in the short term, we are exploring the important question of who should pay for the next generation of connectivity infrastructure’. In September 2020 the Commission already adopted a Recommendation calling Member States to boost investments in very high-capacity broadband connectivity infrastructure and, once the Connectivity Special Group was established one month later, a subgroup made up of Member States’ representatives was set up to specifically devote its efforts to address the reduction of the cost of deploying electronic communication networks.
After two years, the Digital Decade 2030 Policy Programme is a reminder for Member States to cooperate on this issue and work towards collective resilience. This explains why the European Commission has launched in 2023 a Connectivity Package Act which consists of three baskets: (a) a proposal for a ‘Gigabit Infrastructure Act’ to enable a faster, cheaper and effective rollout of gigabit networks; (b) a Gigabit Recommendation draft to provide guidance to National Regulatory Authorities on the conditions of access to telecom networks of operators with significant market power; and (c) an exploratory consultation on the future of the connectivity sector.
The third basket on consultation has triggered an enormous debate, especially when it comes to potential modifications in the way telecommunication infrastructures are funded by the operators that make use of them across the EU. Diverging opinions across stakeholders have been raised on the need to make content providers pay for the network they use to telco companies.
The following sections provide a description of the market participants involved, their interactions and the challenging financial situation of EU telcos and address the possible solutions being considered. These options are namely a review of the EU’s telco regulatory framework, the introduction of efficiency obligations for content providers in data traffic, as well as the main arguments in favour and against the so-called ‘fair share network’. The main conclusion is that the issue is part of the EU’s strategic autonomy debate, by further detailing its impact on security, economy and international trade, Member States’ competition and its effects on European integration.
Interaction between market participants and the situation of the EU’s telecom sector
Main market participants
It is advisable to start by providing a short explanation of who the main participants of the market at hand are. There are three main types of participants: Over the Top (OTTs), Internet Service Providers (ISPs) and consumers.
OTTs are the providers of content over the public Internet, which is requested by consumers, who are at the other end of the market. And just in the middle of OTTs and consumers, there are the Internet Service Providers (ISPs).
The main OTTs in terms of data traffic are Google, Netflix, Facebook, Microsoft, Apple and Amazon. Thus, the main OTTs are basically big techs. Even if these six companies are labelled ‘bigtech’, their business models are not the same. The models of Google, Microsoft and Apple basically rely on providing their own operating systems and devices, while Meta and Amazon basically provide complementary applications to the other three companies and Netflix is a streaming service that offers a wide variety of films and series. Although of US origin, all these six companies are international cross-border companies, providing services globally.
ISP is a broad label. Within fixed line networks, these include the network operators, ie, telecommunication companies, which are the owners of the network, but also access ISPs, which lease part of the network to allow subscribers to connect to the Internet, and Internet Exchange Points (IXPs), which are essential technical infrastructure where subnetworks come together to connect and exchange Internet traffic. Access to fixed-line networks is typically regulated. Regarding mobile networks, ISPs include Mobile Network Operators as owners of the transmission towers of 3G, 4G and 5G, as well as Mobile Virtual Network Operators, which lease access to networks of Mobile Network Operators. Access to mobile networks is usually unregulated. For purposes of simplicity and in light of the nature of our analysis, we will identify ISPs with telecommunication companies. Although some telecommunication companies operate in several countries, their services deployment is typically predominant in one single country, differing from big techs, which are evenly distributed across a large number of EU Member States.
Interaction between big techs and telcos
In the last few years, big techs and telcos have started competing in some areas, such as voice and messaging services (eg, Meta is providing a very well-known app in this field) and TV streaming (several telcos are providing their own streaming services). However, all in all, the role of big techs and telcos is highly complementary and they need each other. Basically, big techs provide consumers with services that they seek for a variety of reasons, while telcos run the underlying infrastructure without which it would be impossible to match the supply of big techs with the demand of consumers.
Internet has become indispensable in the professional and personal daily lives of billions of users. This trend has been triggered by the supply provided by big techs and exacerbated by the impact of the COVID-19 pandemic. However, this would not have been possible without the massive transformation of fixed and mobile telecom networks in the form of Very High-Capacity Networks, including FTTH and 5G. According to reports by ETNO, EU telecom companies have invested more than €500 billion to allow this transformation, with ETNO companies having deployed almost 71% of network investment by 2019.
Still, bigtech companies also report their investments in infrastructure. Over the last decade, big techs have collectively invested over US$880 billion in global digital infrastructure, including approximately US$120 billion a year from 2018 to 2021. These infrastructure contributions made by technology companies save telecom operators around US$6 billion per year. For instance, Meta affirms that it contributes to European telecommunication companies and to the industry in several ways. First, it carries out its own investments –with partners in submarine cables such as Marea, Havfrue, Amitie and Havhingsten, which fosters transatlantic capacity–. This initiative has increased Meta’s activity four-fold since 2016. It also argues that it partners with European telecom operators, including Orange and Vodafone. Meta is a direct customer of the European telecom industry, having leased or purchased over one million kilometres of terrestrial fibre since 2018. Likewise, it argues that it has built and deployed its own new telco infrastructure in European territory, for example through its Content Delivery Network (CDN). Big techs state that the increased demand of Augmented Reality by 2030 will not produce constraints in mobile network capacity, while telco companies think the opposite.
Clear proof of this interaction is the evolution of data traffic, with striking increases, especially compared with voice traffic, as shown in Figures 1 and 2.
As indicated in section 1, in order to reach the targets of the EU Digital Decade, massive investments are needed. If the Metaverse is to spread, estimates point to an increase between x5 and x40 with respect to the streaming of HD videos. According to the European Investment Bank’s estimates for 2014 to 2020, the investments needs in that period to reach a global benchmark for broadband services required €75 billion and faced a gap of €30 billion. The European Commission’s current fair share proposal estimates an investment gap of €65 billion by 2025. However, it is important to note that these data are based on reports from 2011 and 2013. This means that figures from 2021 to 2025 have not been fully defined and are unclear. While there is no doubt that investment needs will increase, an appropriate policy decision that balances all stakeholders’ interests will be made only on the basis of a correct, comprehensive assessment of present and future data.
However, there are a number of elements that could make it difficult for telco companies to keep up with investment needs, which explains why the level of investment in infrastructures is currently suboptimal.
Challenges for EU telcos
First, EU telco markets are fragmented. In the EU the general rule of at least four telco operators by Member State deprives telco companies of the financial means to keep up with increasing investment needs. Indeed, EU competition rules have mainly focused on a static approach consisting of providing consumers with low prices, instead of a dynamic one to foster investments. While broadband quality has dramatically increased, retail prices have continued their downward trend.
Back in 2015 this debate was already on the table and stakeholders discussed the need for the European Commission to stimulate cross-border supply in telco infrastructure. On the one hand, by ensuring competition in intra-country mobile markets so that expanding into other EU countries may become an incentive for operators; on the other, by decreasing the costs of expansion into other Member States.
Second, telco companies have faced a limited adaptation to new market conditions such as some digital services which have recorded an unprecedented demand, thus experiencing declining profits. Also, their market spectrum is nationally-based and the different land access regimes pose a problem for their competitiveness.
Third, probably as a consequence of the former point, the financial situation of EU telco companies is far from ideal. For instance, the Compound Annual Growth Rate of the Average Revenue per User since 2015 for EU telcos has been -1% for both fixed and mobile services. Another proof of a challenging financial situation is the evolution of the share price of the six main big techs and the Eurostoxx 600-Telcos, as shown in Figure 3. This is also reflected in the market capitalisation of EU telcos and big techs: whereas EU telco market capitalisation is below €0.3 trillion that of the six largest big techs is above €7 trillion.
One could argue that the differences in market capitalisation between EU telcos and big techs are due to underlying market dynamics. Indeed, big techs are global enterprises, with ample space for growth, scalable business models and limited investments compared with telcos. Nevertheless, market capitalisation of EU telcos has consistently been worse than that of US telcos, as shown in Figure 4.
Therefore, there seem to be specific issues with EU telcos that need to be sorted out if the targets of the EU Digital Decade are to be reached and especially if the EU is to defend its strategic autonomy in the technological field. And it is not only about having different regulatory frameworks: from an economic perspective, there is no ‘unified EU telco market’ but rather ‘EU national markets’ that operate with each other. The fragmentation of the EU market has been a worrying issue compared with the existing markets in Japan, Korea and the US.
Possible solutions to cover the investment needs of the EU’s telco infrastructure
Three possible solutions have been put on the table regarding the problem at hand: (a) a modernisation of EU competition rules for the telco sector, promoting concentration within Member States’ borders and across the EU, and facilitating State Aid procedures for the deployment of 5G; (b) efficiency improvements in data traffic; and (c) cost sharing provisions or agreements for investments between telcos and big techs. As will be explained below, solution (c) is especially contentious and is the focus of one of the four sections of the recently launched public consultation by the European Commission on the future of telecommunication infrastructures.
We argue that measures need to be taken to reinforce the position of EU telcos if the targets of the Digital Decade are to be reached. In particular, we consider necessary a reform of the EU telco regulatory framework, as well as the introduction of efficiency obligations for data traffic. Regarding the ‘fair share’ debate, we argue that it is unfair to say that this proposal is only an economic issue and that it should be analysed from a multifaceted perspective that eventually refers to the EU’s goal of achieving strategic autonomy for itself and for its Member States.
Work should advance in all the three areas in parallel, though making progress in the first suggested solution is urgent. If the ambitious objectives of the Digital Decade and the Gigabit Infrastructure Act are to be met, the Commission must allow national and European consolidation operations, as well as facilitate State Aid procedures for the deployment of 5G.
Solution 1: modernisation of EU Competition and State Aid rules for the telco sector
EU telecom markets were liberalised more than 25 years ago. Nevertheless, the rules introduced to promote liberalisation have barely changed and have led to an extremely fragmented EU telco market, where companies do not have the necessary financial muscle to take forward the investments that guarantee a strong and innovative digital landscape in the EU.
This was acknowledged by Commissioner Thierry Bréton in September 2022, according to whom ‘we must ask ourselves whether our network regulation, conceived at the time of the opening up of copper networks to competition, is still appropriate, when the metaverse and its massive data flows are looming’. EU telcos have also insisted on the relevance of this topic, with TIM’s CEO Pietro Labriola, for instance, indicating that in the EU there are ‘too many operators compared to the potential demand’. Telefónica has also made public a post on its web blog, arguing for more domestic consolidation and less competition in the markets.
In order to promote cross border concentration within the EU, mergers and acquisitions within Member States’ borders need to take place first. A clear example of this is the merger between Orange and MasMovil in Spain, over which the European Commission has decided to open an in-depth investigation, instead of expediting the process. There is no evidence that the European Commission will depart from its reluctance to reduce the number of mobile operators in a big national market from four to three.
Besides, the European Commission has set very ambitious objectives in the Digital Decade and in the Gigabit Infrastructure Act, amongst others, increasing the ambition for the deployment of 5G. In order for these objectives to be reached, State Aid procedures should also be made lighter, especially for the Member States that have advanced further in the deployment of 5G. In particular, State Aid should foster the deployment of active infrastructures, without imposing any additional requirements regarding passive infrastructures.
Solution 2: efficiency improvements in data traffic
Following the call by EU regulators during the first days of the COVID-19 pandemic, the largest bigtech companies took steps on a voluntary basis to adjust the quality of their streaming services during a period of time, without any relevant negative reports by end consumers. This proved that higher bandwidth is not always needed and that there is scope for big techs to act more efficiently.
Some other practices by big techs also lead to unwarranted data traffic. This is the case, for instance, of video auto-plays (ie, a feature that allows next video content to be loaded and played without any engagement on the side of the user) or ‘pre-fetching’ practices (ie, when an ad link appears on a user’s screen and its content is downloaded, so if the user does not click on it, the traffic generated is useless).
Therefore, there is scope for big techs to assume voluntary commitments, as they did during the COVID-19 pandemic, to increase efficiency in data traffic. Moreover, the European Commission and EU colegislators could go even further, by introducing regulatory obligations for big techs to manage their data traffic more efficiently.
Data traffic concentration
As shown in Figure 5, almost 48% of data traffic in the first half of 2022 was generated by the six largest big techs, though as indicated in Figure 6, a decrease was observed from the previous year, 2021. This, together with the high investment needs in the coming years and the differences in market capitalisation of telcos and big techs have led some market participants, public sector representatives and members of academia to request some sort of direct or indirect compensation, known as a ‘fair share’, from the largest big techs to telcos to ensure that the needed investments take place. This demand is not new. In fact, it would be the application of the ‘Sending Party Network Pays’ (SPNP) principle, according to which content platforms that generate and send most Internet traffic should pay a certain fee to telecommunications providers in order to have them deliver that traffic to users. The defenders of ‘fair share’ payments also insist that the principle of net neutrality would not be damaged, as the compensation mechanism would not involve a differentiated traffic management or unequal treatment of data traffic. They also point to other possible alternatives such as the setting up of a special fund as potentially controversial, given the difficulties to establish and run a fund as well as the potential of its mismanagement for other uses, or the uncertain relationship of such a fund with the Universal Service Fund.
Nonetheless, this has sparked a fierce debate, as certain other market participants and public sector representatives do not see any justification for such a compensation, which they refer to as a ‘telco tax’ and deem it would lead to unwarranted market distortions and would put the principle of net neutrality at risk. In their view, the SPNP principle makes sense in the telephony environment, but not in the Internet field. They also allude to the case of South Korea, where this principle was enacted in 2016, requiring ISPs to charge fees for the volume of traffic they were exchanging between them, leading, in their view, to detrimental effects for the South Korean market, although there are diverging views (see the section on ‘International views’). They also argue that big techs are investing in infrastructure, mainly in the form of submarine cables and data centres. Finally, in the event of any sort of compensation mechanism entering into force, they seem to favour the setting up of a special fund, rather than any sort of ‘fair share’ system.
It is unfair to say that the ‘fair share’ proposal is only about economic interests. The scope of the ‘fair share’ proposal and the intense debate that has been raised among stakeholders with different opinions has to be analysed from a multifaceted perspective that eventually refers to the EU’s stated goal of achieving strategic autonomy. While strategic autonomy has received much attention, there is still no common definition. In this paper we refer to strategic autonomy as the capacity of the EU to act autonomously –that is, without being dependent on other countries– in strategically important policy areas.
Strong or smart European internal market?
Telco companies are proposing a compensation mechanism, under the form of either a special fund or a direct payment, while content providers, in the event of any sort of compensation mechanism entering into force, seem to favour the setting-up of a special fund.
This proposal poses several issues:
- The 5% threshold. Most telco companies are proposing the application of direct payment to those content providers whose network infrastructure usage accounts for at least 5% of the total of data traffic in the national territory. The reasoning to set this threshold is to not undermine the power of SMEs, as content providers with a low capacity to monetise users might experience inefficiencies in their business model. This threshold approach resonates to the EU’s efforts on the Digital Services Act and Digital Markets Act, which opens up discussions on its efficacy from two perspectives: the political and the technical.
Also, this 5% threshold has been proposed at the national level because there are some content providers whose share of data traffic largely differs across Member States and can surpass this percentage as much as they do not in other countries. For example, TikTok exceeds the 5% threshold in Spain, but not in Germany. This proposal aims to ensure fair competition for content providers in each of the respective countries where they contribute.
- Traditional telco companies claiming contributions are selling access infrastructure to specialised telcos (eg, towers, fibre...). This is why it would be important to take into account this factor in the discussion about paying for the deployment of access infrastructure.
- The role and mandate of National Regulatory Authorities. The second initiative within the Connectivity Package proposal is a Gigabit Recommendation draft, which aims to provide guidance to National Regulatory Authorities on the conditions of access to telecom networks of operators with significant market power, in order to incentivise a faster switch-off of legacy technologies and accelerated Gigabit network deployments.
The main debate over this point is which institution –at the national or EU level– will be responsible for dispute resolution when the national arbiter does not decide on the conditions of access or when one side asks for additional views.
- Licensing schemes and collaboration in sensitive scenarios. While the goal of the ‘fair share’ proposal is to set a bar on how content providers economically contribute to telco infrastructures, there is an overlooked debate on the effect of the European Commission’s proposal on a common EU-level licensing scheme for spectrum use in certain justified cases such as cross-border services for satellite communications and for dealing with radio frequency interference cases from non-EU third countries. The content providers’ portfolio may also include activities with indirect ties to sensitive, security-related issues: for example, data centres of big techs that handle personal and non-personal data from critical infrastructures. A specific piece of the debate should be how content providers should collaborate with critical infrastructures and critical strategic sectors –as telco companies are in EU countries– when a crisis or public emergency arises.
- Legitimacy and organisational culture. Infrastructure sharing agreements are usually divided into two types: passive infrastructure sharing (towers, sites, data centres, masts…) and active infrastructure sharing agreements (access to software elements, network capacity, etc). According to the OECD Recommendation of the Council on Broadband Connectivity, infrastructure sharing is not detrimental to competition, although passive sharing tends to be the most common as it implies less potential security concerns.
State aid rules: a revamped debate
The European Commission released an assessment on state aid rules for broadband networks in December 2022. It included three main recommendations:
- Explain how public support can be used to incentivise the take-up of broadband services. The fair share proposal aims to contribute to the rollout of further network capacity by 2030. Whether or not stakeholders are in favour or against, what remains particularly important in any case is to guarantee an appropriate, effective and comprehensive risk assessment methodology about concerns related to the economy, security and data-sharing.
- Simplify certain rules in order to facilitate the practical application of the Guidelines and cut red tape for companies and public authorities. For example, the revised Guidelines allow Member States to require operators to provide the most appropriate set of wholesale access products depending on the competitive situation in a given area and the demand for specific products. According to the European Commission, this has a two-fold goal: cost reduction and avoiding lock-in effects that generate dependency on certain providers.
- Clarify and provide further guidance on certain key concepts, which are important for the state aid assessment carried out by the Commission, such as mapping, public consultations, selection procedure, wholesale access pricing and claw-back mechanisms.
The European Commission also proposes to include new criteria such as the contribution to the twin –green and digital– transition goals. These goals remain wide open because leveraging this criterion in network infrastructure might be complex. However, a common approach might be the EU-level ‘Do No Significant Harm’ (DNSH) principle, which is already applicable and guides the implementation of national Recovery and Resilience Facility (RRF) plans.
Overall, the main considerations to bear in mind in the case of state aid rules in the aftermath of a potential fair share application should be to gain access to subsidies that comply with the three-rule criteria: proportionality, pan-European effect and non-discrimination. Also, it should be at the least possible cost for taxpayers and without undue competition distortions.
Also, an important issue will be to effectively oversee how the provisions of the Broadband Guidelines are implemented, as the General Block Exemption Regulation lays down ex ante compatibility conditions by which Member States may implement state aid measures without prior notification to the European Commission. Finally, how the European Commission defines market failure or sub-optimal investment situations will be a critical issue: big techs consider that the fair share idea is getting proposed because telcos are suffering a market failure (they are unable to deliver to the market as expected and face financial constraints), while telcos state that the market failure happens because content providers make use of a service for which they do not pay telcos.
- The most important debate over the consultation has been about the respect for the ‘net neutrality principle’, which is covered by Directive 2018/1972, and which means that information on the Internet should be transmitted impartially, without regard to content, destination or source and that users should be able to decide what they aim to use.
The bigtech perspective is that telcos cannot prioritise or slow down access to certain services. The European Data Protection Supervisor has raised some concerns about the impact of certain traffic management policies on privacy and confidentiality. Digital rights NGOs have warned about the potential infringement of net neutrality, BEREC is changing its view from a relatively initial negative opinion towards a favourable approach to the proposal.
- The increasing amount of data regulations has encouraged some non-EU content provider companies to install their own infrastructure-related apparatus within the EU. This is the case of TikTok, which has launched its Project Clover in the EU –resembling the US Project Texas that harmonises its data compliance programme with the national jurisdiction in place– and has installed in turn three data centres to store the data it collects in EU countries: two data centres will be based in Ireland and one in Norway –which is an Associate Country, not an EU Member State–. While data compliance is always equal for both EU and non-EU companies that settle in a territory, it will be important to assess the impact of the fair share proposal on security issues other than the economic ones.
Consumer protection and behaviour
Strategic autonomy is also about how inhabitants provide legitimacy and trust to the activities their own institutions are deploying to guarantee, respect, protect and promote their own welfare system. This is why customer behaviour is an important topic, even if often overlooked.
According to available data, 62% of those aged under 24 look at their phone within 15 minutes of waking up, compared with 36% of the overall population. More than one third of the population use conversation-focused communication (for example, Amazon’s Alexa) more than display-focused communications. Virtual, Augmented and Mixed Reality are expected to surge in the coming decades, which will require a public response to the network capacity needs of citizens to keep developing their daily activities. In this line, it is true that telcos and big techs work together. For example, they leverage on edge computing to open their networks to third-party app developers.
This is why governments should think about the impact of infrastructure development in the EU as an issue that also touches on the legitimacy they receive from citizens when delivering public services. It will have an impact only if telcos use the money received to improve infrastructure and transform their business market.
Competition across Member States
The differences between EU countries develop in several different ways:
- Geographical divide: some northern European countries, which also have strategic telco companies, opt for a centrally managed fund, while southern European countries advocate a ‘fair share’ direct payment mechanism. The direct payment would mostly benefit telco companies that have a greater level of network deployment in Europe. This is the case of companies from Southern and Western Europe, but not from Northern Europe, which have less network penetration.
- Interest divide: Member States do not all have the same interest in this topic because not all have large, strategic, national telco companies. Meanwhile, some countries contribute state shareholdings to some operators that result in them having two ‘chairs’ in this discussion. Also, bandwith coverage and deployment rates show major differences across Member States. Some countries, such as Ireland, host a large number of bigtech headquarters in EU territory, which might disincentivise Irish participation in this discussion.
- National or EU-level oversight: countries proposing the ‘fair share’ mechanism have advocated different oversight procedures. For example, the French telco association has proposed an SPNP model based on a gigabyte tariff at the European level, so that national authorities can rely on it to adapt their own decisions.
- Peer-review process: this PRP mechanism is not part of the ‘fair share’ proposal. However, the Digital Decade 2030 Policy Programme stipulates the promotion of this peer-review process across Member States, by which they might exchange best practices on specific aspects of policies, measures and actions, and might help to improve the attainment of certain targets of the Digital Decade.
- Industrial policy: the Digital Decade 2030 aims to foster multi-country projects and European Digital Infrastructure Consortiums (EDICs) with at least three Member States. However, this public support for multi-country projects should be used in case of market failures or sub-optimal investment situations. How market failure is defined –scope, resources, ex ante or ex post– might vary greatly across Member States.
- Focus on prices versus affordability: according to an OECD analysis, countries monitor their broadband policies differently. For instance, Finland and Slovakia review broadband affordability on a periodical basis, while Belgium only monitors prices.
The US reaction has been to be cautious about the proposal. Historically, the US government has intervened in a limited and targeted way. The 1996 Telecommunications Act revamped the Universal Service Fund (USF) and extended the universal coverage of ‘advanced services’, including Internet access, and it required telecommunication providers to contribute a percentage of their revenues from calls that crossed states and international borders into the USF.
At the same time, there has been criticism over the US Universal Service Fund due to two reasons:
- First, its viability: Internet access providers and other platforms are exempt from paying into the fund, but companies evolve their technology portfolio and services. This last argument aligns with the European telco proposal.
- Second, its legality: a number of federal court cases have raised concerns because the USF is managed by the Universal Service Administrative Company, a non-governmental actor which was delegated to mandate a critical sector public issue.
Additionally, it is interesting to assess the treatment of network infrastructure in the EU-US Trade and Technology Council. Telecommunications are part of the discussion in the Working Group on ICTs security, but mostly from an economic security perspective: supply chains and resilience at times of crisis. The regulatory side is not treated in any case in the TTC, as already occurred with the transatlantic data framework –the renewed Privacy Shield 2.0– which was left in the hands of the EU Court of Justice, with no political interference.
Third, the impact of the ‘fair share’ proposal, if eventually carried out, might be relevant when it comes to third countries with which the EU has partnered. Particularly, it will remain of interest to follow up the potential implications of the Japanese, Korean and Singaporean bilateral Digital Partnership Agreements, the recently launched EU-Latin America and Caribbean Digital Alliance, and the efforts on regulatory convergence and infrastructure development fostered by EU institutions, falling back on the EU Council Conclusions on digital diplomacy from July 2022.
A remarkable case is South Korea, which launched the ‘cost recovery regime’ in February 2022, by which the Ministry of Science and ICT require the largest content providers to engage with broadband providers for compensation. This regime relies on the Service Stabilisation Act enshrined in Article 22.7 of the Telecommunications Business Act. The government does not set price levels or mandate fees. The act only applies to providers that have at least 1 million users per day and account for at least 1% of the country’s traffic: Google, Netflix, Meta, Naver and Kakao. According to the big techs, the fees for network usage have increased broadband prices for citizens and they have also been disincentivised to invest in South Korea. According to the telcos, the big techs’ revenue model has increased also in 2022. The regime is still recent and figures are not revealing enough, but should serve as a paradigmatic case to follow up.
When it comes to international perspectives, it is important to consider private companies that are not from the EU but participate in it. This is the case of: dark fibre marketers, where non-EU funds have a strong presence; owners of ‘portions’ of submarine cable, where big techs have a strong presence and US regulations are considered applicable; and theoretically passive infrastructures that are gradually incorporating active components (such as Cellnex, Digital Bridge and Vodafone).
A mapping of views and stakeholders
As will be explained below, big telcos, southern European Member States, some MEPs and members of academia support the fair share concept. On the other side, alternative telcos, big techs, northern European Member States and some other MEPs argue against the detrimental effects such an initiative could lead to.
There seems to be a broad support on the side of the European Commission to introduce some type of mechanism to ensure a fair sharing out of the investment costs in infrastructure. Indeed, in May 2022 Executive Vice-president Margrete Vestager said that ‘because we see that there are players who generate a lot of traffic that then enables their business but who have not been contributing actually to enable that traffic. They have not been contributing to enabling the investments in the rollout of connectivity... and we are in the process of getting a thorough understanding of how that could be enabled’. In the same vein, Commissioner Thierry Bréton has called for a system where ‘all market players benefiting from the digital transformation make a fair and proportionate contribution to public goods, services and infrastructures, for the benefit of all Europeans’.
Despite defending the general principle that all market players need to make a proportionate contribution to digital transformation, the European Commission is aware of the different angles of the debate and the need to base any decision on sound evidence. That is why the European Commission published a consultation in February on the future of the electronic communications sector and its infrastructure: the consultation consists of 62 questions divided into four chapters, of which one chapter, consisting of 22 questions, specifically refers to the ‘fair share’ debate.
Positions in the European Parliament are far apart from each other and have been clearly expressed in several letters addressed to the European Commission. In July 2022, 54 MEPs wrote a letter contesting the potential initiative on ‘fair share’, noting the risks for net neutrality as well as negative precedents in the US, South Korea and Germany. In September 2022 the letter written by 48 MEPs supporting the introduction of a ‘fair share’ mechanism was replied by President Ursula von der Leyen with the following statement: ‘increasing volumes of data on the infrastructures need to be met through adequate returns and appetite to invest, especially for mobile networks’.
EU Member States
The position of EU Member States on this matter are similarly far apart.
On the one hand, in July 2022 a group of seven countries (Denmark, Estonia, Finland, Germany, Ireland, the Netherlands and Sweden) requested a careful approach and the widest public consultation possible even before tabling any proposal. In November 2022, following a parliamentary question, the German government took a first and preliminary position, according to which there are basically no clear grounds for the introduction of compensation mechanisms: ‘the federal government assumes that sufficient financial resources are available for the network expansion in Germany. The main contribution to gigabit expansion in Germany is self-sufficient. According to information from the industry, around 50 billion euros will be available in the coming years for fiber optic expansion alone. In areas where network expansion is not economical, state support measures that are in line with competition come into play’. Further negative statements were made by representatives of the German, Dutch and Austrian governments. Finally, at the end of March 2023, the German and Dutch governments tabled a joint position, in which they pleaded for an evidence-based discussion on the issue of network fees.
On the other hand, Spain, France and Italy presented a common position to the European Commission in August 2022, clearly in favour of the introduction of a ‘fair share’. Nevertheless, this joint position was controversial within the Italian government, since the Minister of Industry indicated that the former had been endorsed on his own by the Innovation Minister without any proper discussion previously within the government.
It is surprising to see that the German government has adopted a position which is not particularly in favour of any sort of compensation mechanism, since it departs from the views of Deutsche Telekom, of which Germany is a relevant shareholder. Given the more advanced deployment of FTTH and 5G in southern European Member States, it is also striking to observe that northern European Member States do not favour these sorts of mechanisms. Still, it makes sense that northern European Member States prefer a centrally managed fund and not a ‘fair share’ mechanism, as the direct payment would mostly benefit telco companies that have a greater level of network deployment in Europe. This is the case of companies from Southern and Western Europe, but not from Northern Europe, which have less network penetration.
As in the previous cases, the views among stakeholders are clearly confrontational.
Starting with telcos, there have been a number of statements in favour of a ‘fair share’. ETNO has made public several such statements (eg, in November 2022, and March and April 2023). The CEOs of Deutsche Telekom, Telefónica, Orange and Vodafone wrote an open letter in February 2022 complaining about the asymmetry of earnings and bargaining power between EU telcos and big techs. Several telecom associations joined in July 2022 to launch another statement in favour of fair compensation. Twenty-six telco CEOs followed in September 2022, issuing another statement defending the same principles.
Telco operators have even suggested specific compensation models. For instance, the French telco association has proposed an SPNP model based on a common gigabyte tariff at the European level, which national authorities would have the possibility of adapting in order to take into account differences in investments and the particularities of each Member State. Then parties would be obliged to conclude a private law contract including compensation for the costs invested in the networks concerned. Telefónica has also tabled a proposal that would be based on European legislation and that would establish an obligation for the largest big techs to negotiate and conclude commercial agreements with telcos, including a fair and reasonable price, for the delivery of their traffic through the networks of operators to end users. In the event of an agreement not being reached within a reasonable timeframe from the date of receiving the negotiation request, any of the parties can invoke a dispute resolution process to be managed by a Competent Authority and whose decision would be binding. The main question from big techs is how to verify that all market players benefiting from digital transformation make a fair and proportionate contribution to public goods, services and infrastructures.
Nonetheless, not every ISP has spoken in favour of a fair share. For instance, Init7, a Swiss ISP, and MVNO Europe, the association of independent mobile virtual operators in Europe, have both expressed concerns about the introduction of any sort of compensation mechanism, stressing the lack of evidence supporting this debate and the risk that such additional resources may be used by telcos for price competition rather than for investments. The Association des Opérateurs Télécoms Alternatifs, which is the French association of small telcos, has also joined those criticising the ‘fair share’ concept, for reasons of net neutrality and competition. The European Competitive Telecommunications Association (ECTA), which is the association representing alternative telco operators, has not taken a specific position, but has also argued in favour of competition and the preservation of net neutrality principles.
In July 2022 ACT, the European Broadcaster Association, spoke against the ‘fair share’ principle, arguing that its members are already investing significantly in content delivery networks and are supporting ISPs by allowing Europeans to derive value from the premium broadband connections they purchase from telcos.
Another relevant figure is the European Internet Exchange Points (IXPs), which acts as the interconnection between Internet networks facilitating multilateral Internet data exchange (peering). Organisations providing IXPs are recognised as ‘Operators of Essential Services’ for Digital Infrastructure in the Network and Information Systems Directive (2016/1148) and will be deemed ‘Essential Entities’ in the NIS2 Directive. While IXPs do not aim to identify which financial mechanism would be most appropriate, their main concern comes from the potential weaknesses in critical infrastructure due to market ups and downs. They showed their concern in a letter to the Commissioner for Competition, highlighting that the ‘fair share’ proposal would: increase the costs of concluding interconnection agreements, inhibiting the networks’ choice to peer; replace the current market-based model for interconnection with a highly regulated interconnection market in which administrative rules rather than technical necessity or a high-quality Internet for the European citizens becomes the primary determinant of interconnection decisions; and potentially create new systemic weaknesses in critical infrastructure.
Civil society associations have also taken part in this debate. In 2023 NGOs showed their concern about potential harm to consumers due to the potential risk that the network contribution would be passed on to them, whilst their choice would be reduced as content companies would have less money to invest and distribute new content. Also, in June 2022 a group of 34 civil associations addressed a letter to European Commission’s representatives challenging the ‘fair share’ concept and cautioning against the impact it could have regarding the net neutrality principle. BEUC, the European Consumer Association, has also expressed concerns regarding the ‘fair share’ doctrine. On the other hand, the European Digital SME Alliance supported in July 2022 the fair share initiative but indicating that any financial contribution should give place to more affordable conditions for SMEs to use the networks.
Several studies have also been made public, many of them upon demand of the interested parties.
For instance, Axon published its own analysis commissioned by ETNO, highlighting that telecom network operators do not have enough bargaining power to negotiate fair commercial terms with big techs, putting the achievement of the European Commission’s Digital Decade targets at risk. That is why Axon suggests several solutions, namely a contribution by big techs to telcos that would be based on a regulated mechanism for direct agreements with network operators. Axon also mentions alternative compensation mechanisms, such as a special fund or a form of digital taxation, which they label as potentially raising serious concerns in light of the difficulties in setting up such a solution and the possibility of misdirecting the funds to other uses. Finally, Axon insists on the need to introduce regulatory obligations for big techs to manage their data traffic more efficiently.
Frontier also made public an analysis commissioned by Deutsche Telekom, Telefónica, Orange and Vodafone, estimating the costs that are associated with the ‘traffic sensitive’ elements of fixed and mobile telecom networks across Europe that can be attributed to bigtech traffic.
The Dutch Ministry of Economy requested an analysis by Oxera, on the basis of which it shaped its position against the idea of introducing a ‘fair share’ mechanism. Indeed, adopting an approach that departs from indirect and longer-term impacts such as investment in network capacity, Oxera comes to the conclusion that the transaction and regulatory costs of the ‘fair share’ proposal would be significant, potentially leading to a degradation of Internet quality, as in the case of South Korea, and to reduced incentives for investments by big techs in infrastructure. Oxera also considers an alternative scenario, in which big techs would be requested to pay contributions to a centrally-managed fund from which the telcos could draw, concluding that this solution would potentially reduce some of the regulatory and transaction costs of the former option.
In the academic field, the University of Toulouse has made public an analysis according to which cost-sharing could be efficient when restricted to large and efficient content providers, where efficiency implies that they have the ability to monetise demand through prices, advertising or other means. Yet, imposing a positive contribution to content providers with a low ability to monetise users would be inefficient according to their model.
Finally, in the regulatory field, BEREC, the Body of European Regulators for Electronic Communications, has issued a preliminary assessment, concluding that the Internet has proved its ability to self-adapt to changing conditions, such as increasing traffic volume and changing demand patterns. It argues that there needs to be an adequate justification for any measure intervening in the market and that the SPNP model would provide ISPs with the ability to exploit the termination monopoly, potentially harming the Internet ecosystem. Therefore, in its view, SPNP would require regulatory oversight and could require regulatory intervention.
Telecommunication infrastructures are key for the EU’s strategic autonomy. However, several challenges have come up against the achievement of the targets of the Digital Decade. In the case of telecommunication infrastructure, a funding gap of €174 billion has been identified by 2030, which might lead to approximately 45 million people in the EU being left without broadband at that time. In turn, there will be an increasing need to raise the volume, speed and capacity of telecommunication infrastructures to allow content flows across the Union. That is why the European Commission has launched a consultation on the future of the connectivity sector.
Several solutions have been put on the table, namely a review of the EU’s telco regulatory framework, the introduction of efficiency obligations for content providers in data traffic, as well as the so called ‘fair share’ or ‘telco tax’. The ‘fair share’ proposal has sparked a fierce debate, with big telcos, southern European Member States, some MEPs and members of academia supporting the idea, and other telcos, big techs, northern European Member States and some MEPs arguing against the detrimental effects such an initiative could lead to and favouring a special fund, in the event of a compensation mechanism being introduced. We argue that measures need to be taken to reinforce the position of EU telcos, if the targets of the Digital Decade are to be reached. In particular, we consider it necessary to reform the EU’s telco regulatory framework and to introduce efficiency obligations for data traffic. Regarding the ‘fair share’ debate, we argue that it is unfair to say that this proposal is only an economic issue. It should be analysed from a multifaceted perspective, which should eventually lead to the EU’s goal of achieving strategic autonomy.
ACT-European Broadcaster Association (2022), ‘TV & VoD statement on network fees’, TV & VoD statement on network fees | ACT (acte.be)
Alexander, F. (2023), ‘Europe, do not misunderstand US telecom policy’, Center for European Policy Analysis (CEPA).
Association des Opérateurs Télécoms Alternatifs (2022), ‘Position de l’AOTA sur le fairshare’, Tribune Le Monde - Position de l’AOTA sur le fairshare - Aota.
AXON Partners Group (2022), ‘Europe’s Internet ecosystem: socio-economic benefits of a fairer balance between tech giants and telecom operators’, Reports (etno.eu).
BEREC (2022a), ‘Draft BEREC Report on Internet Ecosystem’, Draft BEREC Report on the ex ante regulation of digital gatekeepers (europa.eu).
BEREC (2022b), BEREC preliminary assessment of the underlying assumptions of payments from large CAPs to ISPs, Microsoft Word - BEREC BoR (22) 137 BEREC_preliminary-assessment-payments-CAPs-to-ISPs (europa.eu).
Bertuzzi, L. (2023), ‘NGOs, streamers join forces against EU Commission’s senders pay initiative’, Euractiv, 4/V/2023.
Decision (EU) 2022/2481 of the European Parliament and of the Council of 14 December 2022 establishing the Digital Decade Policy Programme 2030.
Deloitte (2017), ‘To be or not to be: the future of the telco business model’, Monitor Deloitte.
European Commission (2020), ‘COMMISSION RECOMMENDATION of 18.9.2020 on a common Union toolbox for reducing the cost of deploying very high capacity networks and ensuring timely and investment-friendly access to 5G radio spectrum, to foster connectivity in support of economic recovery from the COVID-19 crisis in the Union’.
European Commission (2021b), ‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, 2030 Digital Compass: the European way for the Digital Decade’.
European Commission (2021c), ‘State aid: Commission adopts revised State aid rules on Important Projects of Common European Interest’.
European Commission (2022), ‘Digital Economy and Society Index’.
European Commission (2023), ‘Public consultation on the Future of the electronic communications sector’, EUSurvey - Survey (europa.eu).
European Commission (2023b), ‘Trade and Technology Council’.
European Competitive Telecommunications Association (2022), ‘ECTA statement on suggested contribution to network investment (“fair contribution” debate)’, ecta_statement_on_suggested_contribution_to_network_investment_13_September_2022.pdf (ectaportal.com).
European Investment Bank (2016), ‘Restoring EU competitiveness 2016 updated version’.
European Parliament (2022), ‘EU strategic autonomy 2013-2023. From concept to capacity’, Briefing EU Strategic Autonomy Monitor, July.
European Parliament (2022), ‘Letter by 54 MEPs’, 20220712_COM_Access-Fees-MEP-Letter_final3.pdf (patrick-breyer.de).
European Internet Exchange Association (2023), ‘Letter: OBJECT: fair share debate and potential impact of SPNP on European IXPs and Internet ecosystem’.
European SME Digital Alliance (2022), ‘A fairer and stronger European SME Ecosystem’, Digital SMEs call for measures to make the European internet ecosystem fairer and stronger - European DIGITAL SME Alliance.
European Telecommunications Network Operators’ Association (2023), ‘9 questions and answers on the “fair contribution’’ debate’, ETNO.
Fédération Française des Télécoms (2022), ‘For a fair contribution of large bandwidth users to network financing’, Microsoft Word - Fiches OTT Fair Share vEn2 (lafibre.info).
FRONTIER (2022), ‘Estimating OTT traffic-related costs on European Telecommunications Networks’, 2022-03-30-Frontier_Fair-Share_FINAL-REPORT.pdf (telefonica.com).
Init7 (2022), ‘GAFAM to pay for FTTH?’, FTTH in Switzerland (ripe.net) wp_tse_1376.pdf (tse-fr.eu)wp_tse_1376.pdf (tse-fr.eu).
Jullien, B., & M. Bouvard (2023), ‘Fair cost sharing: big tech vs telcos’, Working Paper, nr 1376, Toulouse School of Economics, March.
Killeen, M. (2023), ‘Telecoms stakeholders look to sector reset amid declining profits’, Euractiv, 5/V/2023.
Mariniello, M., & F. Salemi (2015), ‘Addressing fragmentation in EU mobile telecoms markets’, Bruegel, nr 2015/13, July.
Meta (2023), ‘Network fee proposals are based on a false premise’.
MVNO Europe (2022), ‘Position paper’, MVNO Europe expresses concerns about discussion on potential network investment contributions to finance telecom infrastructure - MVNO.
OECD (2021), ‘Recommendation of the Council on broadband connectivity’.
OECD (2022), ‘Broadband networks of the future’, OECD DIGITAL ECONOMY PAPERS, nr 327, July, .
Poitiers, N., & P. Weil (2022), ‘Opaque and ill-defined: the problems with Europe’s IPCEI subsidy framework’, Bruegel.
StrandConsult (2023), ‘Fair share contributions and broadband cost recovery – When Google and Netflix talk about things being bad in “Korea”, they probably mean North Korea, not South Korea’, Research Note.
Telefónica (2022), ‘Official blog – Towards pro-investment market structures in the telecom sector’.
Telefónica (2023), ‘Fair share for network sustainability’.
Telefónica, Deutsche Telecom, Vodafone & Orange (2022), ‘A call for large content platforms to contribute to the cost of the European digital infrastructure that carries their services’ | Corporate (orange.com).
Wooden, A. (2023), ‘Meta hits back at telcos’ “fair contribution” demands’, Telecoms.
34 Civil Society Organizations (2022), ‘Letter to the European Commission’, 2022_06-nn-open_letter_cso_0.pdf (epicenter.works)
 European Commission (2021), ‘Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions, 2030 Digital Compass: the European way for the Digital Decade’.
 N. Poitiers & P. Weil (2022), ‘Opaque and ill-defined: the problems with Europe’s IPCEI subsidy framework’, Bruegel.
 European Commission (2021), ‘State aid: Commission adopts revised State aid rules on Important Projects of Common European Interest’.
 European Telecommunications Network Operators’ Association (2023), ‘9 questions and answers on the “fair contribution’’ debate’, ETNO.
 Deloitte (2017), ‘To be or not to be: the future of the telco business model’, Monitor Deloitte.
 European Commission (2020), ‘COMMISSION RECOMMENDATION of 18.9.2020 on a common Union toolbox for reducing the cost of deploying very high capacity networks and ensuring timely and investment-friendly access to 5G radio spectrum, to foster connectivity in support of economic recovery from the COVID-19 crisis in the Union’.
 BEREC (2022), ‘Draft BEREC Report on Internet Ecosystem’, Draft BEREC Report on the ex ante regulation of digital gatekeepers (europa.eu).
 While Google and Microsoft allow the use of their operating systems in third-party devices, Apple relies on the integration of its operating system and own devices.
 The case of Amazon is interesting, as its business model is increasingly diversified. Amazon plays a key role in e-retailing and cloud services, but is also expanding to devices (eg, e-book readers), with their own operating system.
 A. Wooden (2023), ‘Meta hits back at telcos’ “fair contribution” demands’, Telecoms.
 Meta (2023), ‘Network fee proposals are based on a false premise’.
 M. Mariniello & F. Salemi (2015), ‘Addressing fragmentation in EU mobile telecoms markets’, Bruegel, nr 2015/13, July.
 M. Killeen (2023), ‘Telecoms stakeholders look to sector reset amid declining profits’, Euractiv, 5/V/2023.
 These include Deutsche Telekom, British Telecom, Telefónica, Telia, Telenor, Telecom Italia, Vodafone and Orange.
 Mariniello & Salemi (2015), op. cit.
 Telefónica (2022), ‘Official blog – Towards pro-investment market structures in the telecom sector’, see Towards pro-investment market structures in the telecom sector - Telefónica (telefonica.com).
 For the purposes of this analysis, the term ‘fair share’ will be used.
 European Parliament (2022), ‘EU strategic autonomy 2013-2023. From concept to capacity’, Briefing EU Strategic Autonomy Monitor, July.
 OECD (2021), ‘Recommendation of the Council on broadband connectivity’.
 Deloitte (2017), ‘To be or not to be: the future of the telco business model’, Monitor Deloitte.
 StrandConsult (2023), ‘Fair share contributions and broadband cost recovery – When Google and Netflix talk about things being bad in “Korea”, they probably mean North Korea, not South Korea’, Research Note.
 Dark fibre are fibre-optic cables that have been laid underground and do not have service or traffic running on their fibre strands.
 European Parliament (2022), ‘Letter to the European Commission’, 20220712_COM_Access-Fees-MEP-Letter_final3.pdf (patrick-breyer.de).
 According to the letter, in the US, when the largest ISPs tried to charge such fees, tens of millions of US citizens suffered significant harm, including being unable to watch videos, work remotely and, for one school system, upload payroll data.
 See above for further information.
 According to the letter, in Germany universities saw a huge increase in online learning traffic as a result of the pandemic. But Deutsche Telekom refused to handle the additional traffic without compensation from universities. As a result the German Research Network became effectively unusable.
 Telefónica, Deutsche Telecom, Vodafone and Orange (2022), ‘A call for large content platforms to contribute to the cost of the European digital infrastructure that carries their services’ | Corporate (orange.com).
 AOMR (Romania), APMS (Czech REpublic), AssoTelecomunicazioni (Italy), ATI (Bulgaria), DigitalES (Spain), ETNO (EU), Fédération Française des Télécoms (France), GSMA Europe (EU) and Internetoffensive Österreich (Austria).
 This was signed by various operators, such as Swisscom, A1 Telekom Austria, United Group, Bouygues, Proximus, Telenor, Fastweb, KPN, Altice Portugal, Orange Group, Deutsche Telekom, BT, Telia, TIM, Telefónica and Vodafone.
 Fédération Française des Télécoms (2022), ‘For a fair contribution of large bandwidth users to network financing’, see Microsoft Word - Fiches OTT Fair Share vEn2 (lafibre.info).
 Telefónica (2023), ‘Fair share for network sustainability’, see public-policy-Fair-share-for-network-sustainability-1.pdf (telefonica.com).
 MVNO Europe (2022), ‘Position paper’, see MVNO Europe expresses concerns about discussion on potential network investment contributions to finance telecom infrastructure - MVNO
 Association des Opérateurs Télécoms Alternatifs (2022), ‘Position de l’AOTA sur le fairshare’, see Tribune Le Monde - Position de l'AOTA sur le fairshare - Aota.
 European Competitive Telecommunications Association (2022), ‘ECTA statement on suggested contribution to network investment (“fair contribution” debate)’, see ecta_statement_on_suggested_contribution_to_network_investment_13_September_2022.pdf (ectaportal.com).
 ACT-European Broadcaster Association (2022), ‘TV & VoD statement on network fees’, see TV & VoD statement on network fees | ACT (acte.be)
 European Internet Exchange Association (2023), ‘Letter: OBJECT: fair share debate and potential impact of SPNP on European IXPs and Internet ecosystem’.
 L. Bertuzzi (2023), ‘NGOs, streamers join forces against EU Commission’s senders-pay initiative’, Euractiv, 4/V/2023.
 BEUC (2022), ‘Connectivity infrastructure and the open Internet. BEUC preliminary position on possible introduction of network infrastructure fees’, see BEUC-X-2022-096_Connectivity_Infrastructure-and-the_open_internet.pdf.
 European SME Digital Alliance (2022), ‘A fairer and stronger European SME ecosystem’, see Digital SMEs call for measures to make the European internet ecosystem fairer and stronger - European DIGITAL SME Alliance
 FRONTIER (2022), ‘Estimating OTT traffic-related costs on European telecommunications networks’, see 2022-03-30-Frontier_Fair-Share_FINAL-REPORT.pdf (telefonica.com).
 BEREC (2022), ‘BEREC preliminary assessment of the underlying assumptions of payments from large CAPs to ISPs’, see Microsoft Word - BEREC BoR (22) 137 BEREC_preliminary-assessment-payments-CAPs-to-ISPs (europa.eu).
Image: Telecom transmission tower at the Europaboulevard in Amsterdam (Netherlands). Photo: Diana den Held (@denheld).