{"id":716345,"date":"2026-01-23T23:33:26","date_gmt":"2026-01-23T23:33:26","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/716345\/"},"modified":"2026-01-23T23:33:26","modified_gmt":"2026-01-23T23:33:26","slug":"the-resurrection-of-network-fees","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/716345\/","title":{"rendered":"The Resurrection of Network Fees\u00a0"},"content":{"rendered":"

After defeat in Dubai, Europe\u2019s telecommunications operators held fire. The EU introduced the Open Internet Regulation, protecting net neutrality after many of the same European telecom companies were found to be arbitrarily blocking access to online services that they\u00a0deemed\u00a0to be competing with them, such as\u00a0VoIP\u00a0providers like Skype. But after a few years, the operators brought their fight back to Brussels. Their main trade group ETNO, renamed itself\u00a0Connect Europe<\/a>\u00a0and wielded its familiar arguments about the need to charge big content\u00a0providers\u00a0additional\u00a0fees.\u00a0\u00a0<\/p>\n

The campaign kicked off in 2022, when the European Commission first proposed a Declaration on Digital Rights and Principles, set ambitious connectivity targets for the continent to achieve average one-gigabyte upload and download speeds, and stipulated that \u201call market actors\u2019\u2019 should make a \u201cfair and proportionate contribution\u201d to the cost of the required infrastructure. The Commission\u2019s Digital Decade Policy\u00a0Programme\u00a02030\u00a0codified<\/a>\u00a0these targets.\u00a0\u00a0<\/p>\n

The political climate looked favorable. The EU had spent the\u00a0previous\u00a0decade cracking down on US\u00a0tech, imposing a series of tough laws.\u00a0The General Data Protection Regulation to protect privacy\u00a0was followed by the Digital Services\u00a0Act to combat illegal content and the Digital Markets Act to reign in powerful \u201cgatekeepers.\u201d\u00a0\u00a0<\/p>\n

Thierry Breton, former director-general (CEO) of France\u00a0T\u00e9l\u00e9com, served as the European Commissioner responsible for digital affairs. In 2023, he gave a speech\u00a0calling for<\/a>\u00a0the imposition of\u00a0Network\u00a0Fees.\u00a0\u201cAt a time when technology companies are using most bandwidth and telco operators are seeing their return on investment drop, this\u00a0also raises the question of who pays for the next generation of connectivity infrastructure,\u201d he explained. \u201cThe European Declaration on Digital Rights and Principles for the Digital Decade already established that all market players benefiting from the digital transformation should make a fair and proportionate contribution to public goods, services, and infrastructure.\u201d\u00a0\u00a0<\/p>\n

Delighted, Europe\u2019s incumbent telecom operators launched an aggressive lobbying campaign. They commissioned a report by Analysys Mason asserting<\/a>\u00a0that\u00a0\u2014\u00a0despite\u00a0high levels\u00a0of telecom investment\u00a0\u2014\u00a0roll-out is still too\u00a0slow\u00a0and private investment in Europe\u00a0remains\u00a0lower than that of global peers. \u201cTech giants generate disproportionate network costs with respect to consumers, and they monetize this through advertising and exploitation of personal data, it is only logical for tech giants to contribute to network roll-out.\u201d Another commissioned report by Axon consulting built on these arguments to unashamedly demand an \u201cannual contribution of \u20ac20 billion by OTTs [Internet companies] to the development of telecoms infrastructure in the EU.\u201d\u00a0\u00a0<\/p>\n

The battle\u00a0turned\u00a0ugly. A US-based tech association commissioned a new\u00a0Analysys\u00a0Mason\u00a0study<\/a>\u00a0that\u00a0pointed to<\/a>\u00a0\u20ac183 billion on internet infrastructure for Europe between 2011 and 2021 alone.\u00a0These investments save telecom operators \u201can estimated $5 to\u00a0$6.4 billion\u00a0per year in network and transit fees, \u201cbringing local caching servers as close to the end-user as possible, reducing the amount of work for telcos.\u201d\u00a0\u00a0<\/p>\n

The two sides traded other barbs. Telcos\u00a0claimed<\/a>\u00a0that they had to absorb an explosive growth in internet traffic, driven \u201cby a small number of leading Over-The-Top (OTT) providers.\u201d\u00a0Tech companies retorted that traffic growth was stable at best, and independent observers supported the assertion. \u00a0A study for the German Federal Network Agency\u00a0reported<\/a>\u00a0\u201crelative market saturation for streaming services.\u201d\u00a0The Body of European Telecom Regulators (BEREC) concluded<\/a>\u00a0that \u201cthere has been no fundamental change in the general growth tendency.\u201d\u00a0<\/p>\n

Telecom incumbents\u00a0argued<\/a>\u00a0that \u201ctelcos\u2019 financial health is being increasingly undermined\u201d by \u201ccapital investments required to deal with exponential traffic growth.\u201d\u00a0Analysys\u00a0Mason analyzed the numbers and\u00a0found<\/a>\u00a0that \u201cnetwork-related ISP costs increased by 3% in total between 2018-2021, whilst [global] network traffic increased by over 160%.\u201d\u00a0In reality, this\u00a0showed that European telecom operators managed steady traffic growth at almost negligible incremental cost.\u00a0\u00a0<\/p>\n

The biggest disagreement concerned the impact on the fundamental Internet principle of net neutrality\u00a0\u2014\u00a0that all traffic, from small and large content providers, be treated equally. Telcos\u00a0argued<\/a>\u00a0that they \u201care not asking to amend the current EU Open Internet Regulation,\u201d which prohibits the discriminatory treatment of internet traffic\u00a0\u2014\u00a0even though\u00a0Network\u00a0Fees is all about treating internet data differently, giving preferential treatment to companies who (can afford to) pay to reach customers.\u00a0\u00a0<\/p>\n

Critics pounced. In a joint letter, members of the European Parliament warned<\/a>\u00a0that telcos\u00a0getting their way \u201cwould reverse decades of successful internet economics by requiring the providers of websites and applications to pay fees to ISPs that have never existed before.\u201d \u00a0Access fees \u201cwould abolish key Net Neutrality guarantees that Europeans fought for.\u201d BEREC agreed, forecasting \u201cvarious risks for the internet ecosystem,\u201d it\u00a0said<\/a>\u00a0in its \u201cpreliminary analysis\u201d of the\u00a0Network\u00a0Fees proposal. \u00a0\u00a0<\/p>\n

The bottom line looked clear.\u00a0\u201cData is sent to networks because users are requesting it through the internet connection they pay for,\u201d digital rights group Epicenter Works\u00a0argued.<\/a>\u00a0In short, it is telcos\u2019 own consumers that are requesting data, and they have already paid telcos to receive it.\u00a0\u00a0\u201cWho would want a cable running through their home if it was not for the content provided by\u00a0tech?,\u201d\u00a0asked\u00a0<\/a>Communications Chamber consultant Brian Williamson.\u00a0\u201cAfter all, it is consumer demand for online content that actually drives demand and revenues for telcos.\u201d\u00a0<\/p>\n

Perhaps the\u00a0most damning argument of all came from the only country that imposed\u00a0Network\u00a0Fees\u00a0\u2014\u00a0South Korea. The Asian country was an Internet star, boating widespread bandwidth connections at blazing speeds. In 2016, it imposed\u00a0Network\u00a0Fees. The\u00a0results proved catastrophic, <\/a>consultant WIK\u00a0reported. Consumer prices soared. Network speeds plunged. Content providers steered content outside of the country, through Taiwan and Japan. \u00a0Koreans received less diverse\u00a0content at slower Internet speeds,\u00a0while investments in network infrastructure\u00a0actually declined.\u00a0\u00a0<\/p>\n

Europeans took\u00a0note. The European Internet Exchange Association (Euro-IX)\u00a0warned\u00a0<\/a>that the Network Fees in South Korea \u201cresulted in reduced quality and security of the services provided to end-users.\u201d \u00a0Analysys\u00a0Mason predicted\u00a0Network\u00a0Fees would leave Europeans with \u201cfewer choices and a lower quality of experience, and fewer services for businesses could also slow digitalization.\u201d Indeed, a network usage fee would\u00a0ultimately end\u00a0up hitting Europeans directly in their pockets, in the form of more expensive cloud and streaming services.\u00a0\u00a0<\/p>\n

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As the evidence mounted about the dangers of\u00a0Network\u00a0Fees, the tide turned against the telecom operators. A new European Commission took over. Mr.\u00a0Breton was replaced by a pragmatic pro-innovation Finn,\u00a0Henna\u00a0Virkunnen. She could be ready to reevaluate the need to introduce\u00a0Network\u00a0Fees.\u00a0<\/p>\n

However,\u00a0a backdoor\u00a0opened. Instead of asking for direct payments, operators have begun demanding the imposition of a \u201cdispute mechanism.\u201d Content providers would\u00a0be required\u00a0to negotiate with the operators for interconnecting their Internet-connected networks, and if they disagreed on fees, regulators would impose them. The proposal to regulate Internet interconnection in this way had already\u00a0emerged\u00a0as a mechanism to impose\u00a0Network Fees, as\u00a0evidenced\u00a0by the\u00a0response from at least one European incumbent telecom operator<\/a>\u00a0to an EC consultation in 2023. \u00a0\u00a0<\/p>\n

A 2025 decision by Italian communications regulator AGCOM exemplified the new battle. It began with a sensitive subject\u00a0\u2014\u00a0football. In 2021-2022, British platform DAZN\u00a0acquired\u00a0exclusive rights to Italy\u2019s top league, Serie A. Outages and poor-quality streams caused nationwide outrage.\u00a0AGCOM\u00a0intervened<\/a>, ordering DAZN to improve reliability.\u00a0\u00a0<\/p>\n

AGCOM then required DAZN to obtain a general telecom authorization\u00a0\u2014\u00a0a status normally held by network operators. Seizing on this extraordinary precedent,\u00a0in August 2025, AGCOM\u00a0brought\u00a0<\/a>Content Delivery Networks under the scope of the European telephone code, effectively applying telecom-style rules\u00a0\u2014\u00a0including mandatory registration and regulatory oversight \u2014 to a critical layer of the Internet. \u00a0\u00a0\u00a0<\/p>\n

Telcos rushed to seize the opening. Telecom Italia\u2019s CEO Pietro Labriola was quick to\u00a0praise<\/a>\u00a0the decision, calling it \u201ca turning point\u201d for the telecom sector and a step toward \u201ca level playing field.\u201d In\u00a0September\u00a02025, the French federation of telecom operators signed\u00a0an op-ed<\/a>\u00a0advocating again for\u00a0Network\u00a0Fees, and\u00a0openly made the link with a dispute resolution mechanism as a fallback\u00a0option.\u00a0<\/p>\n

Despite AGCOM\u2019s claims to the contrary, the reclassification of content networks reopens the idea that big tech companies should pay telecoms for using their networks. Regulators could impose usage-based charges, turning voluntary interconnection into a regulated cost center, breaking the open architecture of the Internet.\u00a0\u00a0\u00a0<\/p>\n

The\u00a0real-world\u00a0consequences could be dramatic. If global \u201cproviders like Akamai, Cloudflare, or Fastly decide that Italy has become too burdensome or hostile an environment in which to operate \u2014 due to increased regulatory costs, data localization demands, or forced revenue-sharing with telecom operators \u2014 the impact will be immediate and widespread,\u201d warned\u00a0Konstaninos\u00a0Komaitis, Senior Resident Fellow for Global and Democratic Governance at the Digital Forensics Research Lab (DFRLab) at the Atlantic Council. \u201cTelcos will\u00a0likely hike\u00a0consumer prices under the pretense of infrastructure investment.\u00a0In reality, Italians\u00a0would pay more for a slower, less secure internet.\u201d\u00a0<\/p>\n

The battle\u00a0soon will\u00a0come to\u00a0a head. Every seven years, the European Union updates its telecommunications regulations.\u00a0It\u2019s\u00a0a long,\u00a0drawn-out\u00a0process. The European Commission proposes. The European Parliament and European Council,\u00a0representing\u00a0governments, amend. All three\u00a0institutions then\u00a0must agree. The next revision is due to be proposed at the beginning of\u00a02026.\u00a0\u00a0<\/p>\n

If Europe moves ahead with\u00a0Network\u00a0Fees,\u00a0whether as\u00a0direct payments or through an indirect arbitration mechanism, the consequences could be dramatic and affect transatlantic relations. In the July\u00a02025 EU-US trade deal, Brussels\u00a0promised\u00a0<\/a>\u201cthat it will not adopt or\u00a0maintain\u00a0network usage fees.\u201d\u00a0<\/p>\n

Europe stands at a crossroads. The continent acknowledges that it has fallen behind in the digital revolution. \u201cEurope largely missed out on the digital revolution led by the internet and the productivity gains it brought,\u201d former Italian Prime Minister and European Central Bank President Mario Draghi writes<\/a>\u00a0in his clarion call for the continent to prioritize economic growth.\u00a0\u00a0<\/p>\n

The only solution is to defend the bottom-up,\u00a0open\u00a0and resilient Internet, which boosts innovation and competitive dynamism, not to protect incumbent telecoms. I know firsthand. For two long decades, I have watched with dismay as entrenched interests have fought to hold back the global Internet. They caused\u00a0damage,\u00a0slowing\u00a0athe doption of what has become the biggest single driver of economic growth. Europe acknowledges its pressing need to boost competitiveness. It acknowledges that its digital regulations go too far, stifling innovation. It vows to simplify the rules. The last thing it should do is introduce backward-looking, counterproductive Network Fees.\u00a0<\/p>\n

Fiona M. Alexander is a Non-resident Senior Fellow with the Tech Policy Program at the Center for European Policy Analysis, 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\u2019s Academic Advisory Body on Emerging Technologies, a member of the Freedom Online Coalition\u2019s Advisory Network, and as a Member of the Marconi Society Internet Resilience Advisory Council.\u00a0<\/p>\n

Bandwidth<\/a> is CEPA\u2019s 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.\u00a0CEPA maintains a strict intellectual independence policy across all its projects and publications.<\/p>\n

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