It’s an old idea that refuses to go away. The European Union has reopened a debate about forcing mostly American Internet platforms to pay telecom companies extra fees for transmitting data. Since these content providers generate a disproportionate amount of Internet traffic; telecom operators argue that they should pay network fees to them for carrying their content — or as they put it, their “fair share.”  

The new initiative could come in the form of the European Union’s upcoming Digital Networks Act, scheduled for release on January 20. Instead of previous plans’ outright direct payments, the forthcoming law may attempt to establish an arbitration procedure that could achieve the same goal of forcing US tech companies to pay fees to telcos. While the initial proposal may make the arbitration procedure voluntary, negotiations on a final text could make it mandatory. 

Such network fees represent an idea in search of a problem, as I detail in my just-published paper Network Fees Redux: The History of a Misguided Internet Access Policy. The Internet works, and it works well. In three short decades, it has grown, bottom up, to serve 5.5 billion users, 68% of the world’s population. “Fair share” payments turn upside down a key Internet principle of net neutrality — that everybody, small startups and giant multinationals, is treated equally on the Net. Payments would unnecessarily insert governments in the middle of private commercial negotiations.  

This misguided idea attempts to graft rules developed for the 20th century telephone age to the 21st century digital age — and it has been rejected, not once, but two, three, four times.Until now, Europe has joined the US in pushing back. This changed only after its own, former government-owned and still often government-influenced, incumbent telephone providerscomplained. 

Over the years, network fees have been called different things. The concept emerged at the turn of the millennium under the moniker, “Internet charging arrangements for Internet services” or ICAIS. Europe and the US united to reject the idea.  At the 2005 World Summit on the Information Society in Tunisia, it popped back up as network fees. Again, Europe and the US united to block it. At the 2012 World Conference on International Telecommunications in Dubai, Europe and the US again rejected a network fees proposal. Yet now it is back in consideration in the upcoming European Digital Networks Act as fair share, either as direct payments or forced payments under a dispute resolution scheme. 

Throughout, I have held a front-line position. In 2000, I represented the US government at the International Telecommunication Union (ITU) conference in Montreal that launched the fight. For the next two decades, I served as the principal official responsible for the development and execution of international Internet, cyber, and communications policy at the National Telecommunications and Information Administration. 

In that role, I developed US policy toward Internet governance. At the Organization for Economic Cooperation and Development (OECD), I initiated the OECD’s Internet policymaking principles and chaired the group that developed the OECD’s Artificial Intelligence Principles, the first intergovernmental standard on AI. 

We now have solid evidence that such fees boomerang. South Korea was an Internet fast mover, building world-class infrastructure that provided speedy broadband connections. It then imposed network fees. The results have been disastrous. Internet providers shifted traffic outside of the country to Taiwan and Japan. Investments in telephone infrastructure plummeted. Prices rose for consumers. Connection speeds slowed — and Internet innovation declined. 

Talk of imposing network fees in Europe threatens to poison already strained transatlantic relations. The Trump administration has signaled its opposition to what it considers a potential European tax on US firms. Tensions would also rise at the United Nations and the ITU, where concerns around financing connectivity for the developing world are once again back on the agenda. If a cost-sharing model is imposed, it will ignore the technical standards that have resulted in today’s interoperable, global Internet. It would open the door for authoritarians to double down on their efforts to control — and stifle — the web. 

Europe needs a modern communications infrastructure for innovation, lower prices, and improved choices for consumers. But it should not rely on 19th-century regulatory concepts to achieve that goal. 

Fiona M. Alexander is a Distinguished Policy Strategist in Residence at the American University School of International Service and a Distinguished Fellow at the Internet Governance Lab. She serves as a member of the International Telecommunication Union’s Academic Advisory Body on Emerging Technologies, a Non-resident Senior Fellow with the Digital Innovation Initiative at the Center for European Policy Analysis (CEPA), a member of the Freedom Online Coalition’s Advisory Network, and as a Member of the Marconi Society Internet Resilience Advisory Council. 

Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions expressed on Bandwidth are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.

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