"Sending-Party-Pays" proposal endangers open and free internet

• vzbv opposes the telecommunication industry’s proposal to introduce charges for internet content providers.
• Charges would endanger net neutrality, competition, and the internet economy.
• vzbv criticises the European Commission for not providing transparent and inclusive venues for public participation in the legislative process and calls for a public consultation at EU level.

The European Commission has, surprisingly, taken up a telecommunications industry proposal which the Federation of German Consumer Organisations (Verbraucherzentrale Bundesverband – vzbv) considers a threat to an open and free internet: The sending-party-pays model. The model calls for content providers such as streaming services, Amazon, and Google to pay telecommunications providers for using digital infrastructure. Such a charge would undermine rules on net neutrality and free competition. The European Commission could present a proposal as early as autumn 2022.

“We are opposed to content providers having to pay telecommunications providers a charge for using the internet. It would damage the existing economy and the autonomy of the internet,” says Susanne Blohm, Policy Officer Team Digital and Media. “The negative consequences for competition, the internet economy and consumer interests outweigh the profit motives of the telecommunications industry.”

Under net neutrality rules, telecommunications providers in the EU have been obliged to treat all data traffic equally since 2016. In addition, data packages are routed independently, as quickly as possible and within the limits of the available resources according to the “best-effort principle”.

If the telecommunications industry were to now charge streaming services and other content providers for this data traffic, data would no longer be treated equally. It could indirectly undermine rules on net neutrality.

South Korea – the only country in the world to have introduced such charges – shows the possible impact they might have. Since the charges were introduced there, content providers have withdrawn from the market, consumer choice has shrunk, and in some cases streaming quality has been reduced.

There was a similar debate on possible content provider charges as far back as 2012. At the time, the European Commission and the Body of European Regulators for Electronic Communications (BEREC) spoke out clearly against the proposal. They opposed it because, among other reasons, it would heighten the risk of monopolies.

vzbv calls on the European Commission to initiate a public consultation before it publishes any legislative proposal. All those who would be impacted, including civil society, industry representatives, and consumer associations must be given a say. In addition, the European Commission should wait for BEREC’s final report on the topic before proposing any specific legislation.