The regulator echoes many of the arguments presented by BEREC, Meta and Google – but wants more stakeholder input before drawing a final conclusion
Mandated payments from tech firms have not been justified: On 26 May 2023, the BIPT issued a draft communication as it looks to contribute to the debate on the possible introduction of mandatory payments by internet platforms to telcos – i.e. a ‘fair contribution’. The report is open for public consultation for one month, with the regulator eager that interested parties share their views and/or data. The BIPT makes clear that it is not outlining a definitive position at this stage. However, it does state, on the basis of an initial analysis of available data and studies, that the need for financial contributions today from content and applications providers (CAPs) to operators is not sufficiently demonstrated in Belgium. In its view, CAPs and telcos have a “mutual economic dependency” due to the importance of “powerful” networks and the availability of quality content. It is therefore in the interest of both sides to deliver content as reliably as possible to end users.
The outcomes of a ‘fair contribution’ are uncertain: According to the BIPT, allowing telcos to monetise a termination monopoly by means of mandatory, direct payments from CAPs (as alluded to in the EC’s recent ‘exploratory consultation’) would radically reverse the existing, free IP interconnection market and could undermine the principle of net neutrality. It could also bring about “hard-to-assess shifts” in the competitive dynamics on related markets within the internet ecosystem. In contrast, setting up a fund for indirect contributions would leave the interconnection market intact (and is therefore less likely to impact net neutrality). However, this option does not exclude the possibility of a market-distorting effect due to the choice of criteria based on which tech players would have to contribute. In both cases, it remains unclear to what extent payments from CAPs would be passed through to their customers and whether this will discourage their investments (e.g. in content delivery networks) or equally operators’ investments in additional network coverage.
The BIPT (provisionally) adds its name to a growing list of opponents: Though the BIPT states that its provisional position could be adjusted in future if new studies or “more concrete” payment mechanisms are presented, many of the arguments contained in the regulator’s report reflect those made by prominent critics, such as Google and Meta. BEREC appears to fall into that camp, reiterating its reservations around a fair contribution in its response to the EC’s consultation. Previously, the Dutch Government also outlined its concerns with such a plan, while Ofcom in the UK has not yet seen sufficient evidence for introducing this kind of charging regime. ETNO and the GSMA, who have been leading the charge for the telecoms industry, have proposed several principles on which financial payments could be imposed, including a 5% traffic threshold for in-scope CAPs. It remains to be seen whether this is a sufficient ‘hook’ on which to develop a regulation, with EC currently focused on analysing responses and publishing non-confidential versions by this summer.
