Network fees are a solution in search of a problem

Today, we shared our views with the European Commission as part of its consultation on the future of connectivity in Europe. We welcome the opportunity to give our perspective on how best to support the continued development of the telecoms ecosystem to the benefit of all. In our response we describe how Europe’s commitment to network neutrality is foundational to its success in this space and how the introduction of network fees would put this success at risk.

In our submission, we highlight our view that proposed network fees are a solution in search of a problem. Content providers’ investments in infrastructure are growing rapidly, European networks continue to function well with plenty of capacity and there is ample private and public investment already available for deploying next-generation networks. Content providers already work well with telecom operators to increase the efficiency of networks, and as Telefonica have said, “internet Interconnection works well, so don’t touch it.”

Like others, we want to see the open Internet thrive and hope that the European Commission will continue to support open networks into the future. In our submission we outline our concerns about how introducing network fees is not only unjustified, but could upend many of the principles of the open Internet. Beyond looking for data to justify such an intervention in a well-functioning market, there are four key questions worth considering:

1. Will network fees harm the open Internet? We have seen no evidence of such a proposal actually helping, and plenty of evidence that it would hurt. Indeed, many independent experts have argued that introducing such a model would have a detrimental effect on the open Internet, where everybody can send and receive information freely. South Korea is the only country to have introduced such a regime for domestic traffic, and the impact of this decision was that South Korea has experienced a decline in the diversity of online content and deteriorating quality (latency) for users.
2. What impact would “fair share” have on European consumers? Consumers currently pay telecom operators directly for access to the entire open web. It’s their decisions that drive Internet traffic, not content services themselves. If network fees are introduced, it’s likely that consumers would be harmed by less choice, lower quality services and higher prices through content providers passing through network fees to consumers, or by some services simply not being available to European consumers any longer.
3. What impact would network fees have on European businesses? First, it’s clear that a significant portion of the traffic which telecom operators describe as “Google traffic” actually belongs to our Cloud customers. Introducing new fees for this traffic could increase costs for cloud services which would eventually fall on European businesses. This could potentially impact SME cloud uptake and put them at a competitive disadvantage to their global competitors. This would hamper reaching the EU Digital Decade targets on digital transformation of businesses.
4. What impact would network fees have on creators and the digital economy? Imposing a “toll” on content platforms and services would introduce new barriers for European content creators. First, it would introduce new costs for these creators for their content to reach its potential audience. And secondly, the whole content industry is concerned that new fees would mean less funds available for the creation and distribution of European movies and series.

Since the earliest days of Google, we have partnered with telecom operators to support the growth of the web with technical and infrastructure solutions. This work has helped enable a thriving open Internet where anyone with a connection and an idea — creators, publishers, SMEs and telecom operators themselves — can benefit. The symbiotic relationship between content providers like Google investing in our applications, technologies and services, and the telecoms industry investing in their infrastructure, has ensured that European citizens benefit from the open Internet.

This exploratory consultation is an important opportunity for people to share their views on how best to support Europe’s digital economy into the future. It’s important that the perspectives of all players in the ecosystem — content providers, consumers, users, SMEs, creators and others — are taken into account in any next steps. If proposals emerge from this consultation it’s important that these ideas are evidence-based, free from wide scale unintended consequences and support the continued growth of the open Internet in Europe.