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Cooperation Working Group Interim Session: Small Task Team to Respond to European Commission Consultation on the Future of the Electronic Communications Sector and Its Infrastructure

WG Co-Chairs: Achilleas Kemos, Johan Helsingius, Desiree Miloshevic

On 3 May 2023 from 13:00 to 14:00 (UTC), the RIPE Cooperation Working Group small task team held a remote session via Zoom.

View the Recording


On 23 February, the European Commission launched a public consultation on 'The future of the electronic communications sector and its infrastructure’. 
Section four of the consultation, 'Fair contribution by all digital players’, states in its introduction:

‘Some electronic communications operators, notably the incumbents, call for the need to establish rules to oblige those content and application providers (“CAPs”) or digital players in general who generate enormous volumes of traffic to contribute to the electronic communications network deployment costs. In their view, such contribution would be “fair” as those CAPs and digital players would take advantage of the high-quality networks but would not bear the cost of their roll-out. 

Conversely, CAPs and other digital players argue that any payments for accessing networks to deliver content or for the amount of traffic transmitted would not only be unjustified, as the traffic is requested by end-users and costs are not necessarily traffic sensitive (notably in fixed networks), but would also endanger the way the internet works and likely breach net neutrality rules.’ (Et cetera)

Following the consultation’s announcement, the RIPE Cooperation Working Group chairs called for volunteers to form a small task team to draft a submission on behalf of the RIPE community. The list of those who signed up was published on 25 February. 

Session description

The small task team members hold weekly calls to collate arguments, sources and data to formulate a draft response to the consultation as well as a position paper. As stated on the RIPE Cooperation Working Group mailing list, the team shared its draft response prior to its submission and hoped to have time allocated at the RIPE 86 meeting Cooperation Working Group session to discuss it further.

In order to share the initial results of the small task team’s efforts, the direction it was heading in terms of providing a community response to the consultation, and to engage with the community at large and gather input regarding next steps, the small task team organised a one-hour online session on 3 May at 15:00 CEST (13:00 UTC).

Why is this relevant?

According to the European Commission, the consultation is ‘exploratory’ in nature. However, depending on the outcome, combined with strong lobbying efforts on the part of certain players, it could lead to a future EU legislative initiative to intervene because of a perceived imbalance that could negatively impact Europe’s ambitions and the necessary investments in Internet infrastructure to achieve these. As the outcome of this debate is of concern to all operators within the European Union, community members are urged to inform themselves about this important topic and also engage, if possible, by submitting their own responses to the questionnaire, in particular section four. 

Additional sources

Recording of a Cooperation Working Group panel discussion at RIPE 84 in Berlin, based on ‘a call for large content platforms to contribute to the cost of the European digital infrastructure that carries their services’

Regulation update on RIPE Labs, including a summary of the ‘Fair Share’ / ‘Sending Network Party Pays’ / ‘Cost Sharing’ debate

Session minutes

RIPE Cooperation Working Group Interim Session: Small Task Team to Respond to European Commission Consultation on the Future of the Electronic Communications Sector and Its Infrastructure

3 May 2023 from 13:00 to 14:00 (UTC) 

WG Co-Chairs: Achilleas Kemos, Johan Helsingius, Desiree Miloshevic 

- Desiree Miloshevic
- Frode Sørensen
- Thomas Lohninger
- Konstantinos Komaitis
- Patrik Fältström

RIPE Cooperation Working Group Co-Chair Johan Helsingius introduced the session.

RIPE Cooperation Working Group Co-Chair Desiree Miloshevic introduced the work of the small task team that was convened by the Cooperation WG. This team had been preparing a response to part of the European Commission’s consultation on the future of the electronic communications sector and its infrastructure. She noted that there had been previous discussions about Content and Application Providers (CAPs) contributing to the cost of infrastructure, such as at the ITU World Conference on International Telecommunications in 2012. This topic had now reappeared with the EU’s exploratory consultation about how to create adequate regulatory frameworks for all market actors to benefit from digital transformation. This could eventually lead to new regulation that might affect the Internet ecosystem and thus the RIPE community.

Desiree shared the task team’s conclusion that the concept of “fair share,” where CAPs would have to contribute to costs, went against the voluntary agreements of interconnection that already functioned well. Autonomous networks should be free to peer according to their needs, and no network should be considered more important than another. Financially, there should be a separation between the actual functioning of connectivity and of content delivery. “Fair share” threatened these ideas. Desiree then introduced the small task team members and the next speaker, Frode Sørensen. 

Frode Sørensen shared the small task team’s response to Question 54 of the questionnaire the European Commission’s exploratory consultation had produced. This question asked whether CAPs should contribute financially to network deployment. The small task team deconstructed the question; they noted that it implied both CAPs and ISPs would have to contribute to each other. However, these two were already mutually dependent. A mandatory payment mechanism could lead to a termination monopoly that could be exploited by ISPs with end users, thus requiring even more regulation to control.

Thomas Lohninger shared links to other organisation’s responses to this consultation so far and encouraged all stakeholders to participate. In addition to Question 54, Question 60 raised many concerns as well, as it asked whether there should be a fund space solution, or indirect payment system, which presented many of the same risks to interconnection. There would be a commercialisation of interconnection agreements, which would reduce focus on Internet resilience and threaten stability. South Korea was an example of this, as a lot of local caching services had left the country and a lot of traffic had moved to Japan, which was detrimental to the quality of service. In Europe, traffic might move to the United Kingdom and the London Internet Exchange, which had already said it would not adopt “fair share.” Another question, Question 58, asked about the potential risks of the model and allowed for a ranking of the risks. The small task team felt the three main risks were a negative incentive for innovation, harm to the stability of the Internet ecosystem and consequences for consumers. Resilience would be another risk worth mentioning. He encouraged attendees to share their experiences negotiating interconnection agreements, especially with large telecom operators. Question 59, about mitigating measures, was another addressed by the team. They were responding that as there was no need for regulation given the already successful functioning of the system, any intervention here would do more harm than good. 

Konstantinos Komaitis also noted that many stakeholders had contributed to the discussion, especially over the past year. He shared a list of them that included the European Consumer Organisation, which had expressed serious concerns about the impact on prices for consumers and on competition, with reference to the example of South Korea. BEREC had also conducted a preliminary assessment and concluded that the Internet had already proven to be adaptable, that there was therefore no adequate justification to intervene in the market and that this would result in termination monopoly, making regulatory oversight necessary. In South Korea, more regulation had to be created to solve problems with the initial regulation, and the same would happen here. The European Internet Exchange Points (EU IX) also noted that regulation was unnecessary given the Internet’s proven ability to cope with increased traffic. Several member states had also said they were concerned about the proposal and felt more assessment would be required. On the other hand, some telecom operators were in favour of the proposal, but the majority opinion was against it.

Desiree shared some links that the small task team would be including as the background materials in their submission.

Patrik Fältström of NetNod noted that NetNod had been helping with the response of EU IX. He explained how traffic worked on the Internet. Traffic flowed between operators, as one provider could not support all customers. In some cases, a provider with a limited footprint would want to exchange traffic with one that had a larger footprint. There were two ways to exchange traffic: peering, which was free, and transit, in which one operator would pay a fee. Operators with larger footprints had to transport traffic over longer distances, which required more infrastructure and incurred more costs. Thus, the smaller operator would pay a fee to the larger. If two parties were roughly equal in footprint, they could peer for free and could save money by not needing to pay for transit with other operators. There were some hybrid models, such as paid peering, which were purely based on the market economy. Regulation in this sphere would need further regulation to constrain it. The key factor was that the Internet model of settling payment was based on the value of the traffic, in both directions. People were willing to pay more for more bandwidth. If a different model was needed, it would have already been developed to adapt to the massive growth of the Internet.

Desiree opened the floor to discussion.

Rüdiger Folk suggested listing the affiliations of task team members. On the topic of the consultation, it was ill-advised for big operators to begin this discussion, as they stood to lose a lot of ground. The community would also lose out no matter who won. He cautioned Patrik not to oversimplify the economic model by claiming that peering was zero-cost. The power relationship between operators, content providers, transit providers and big-scale excess providers had been shifting. The bandwidth requirements to access large content providers had grown so much that they now had private interconnections.

Patrik said that the costs in peering had to do negotiations about where traffic and money should flow. This was pure market economics, which was why regulation was not needed.

Blake Willis of Zayo said many people were framing the debate as though the Internet was just about content and access. In fact, this was about how the Internet worked, and the model was the same for everyone. They needed to avoid regulation that did not address this, especially as they were already facing issues such as splinternets and paid caches. This should be stressed in responses to this consultation.

Thomas Lohninger said the small task team had a diverse background. He agreed it was better to have no regulation on the fee negotiations. Large telcos were being very vague about what they actually wanted. Many in the industry were distancing themselves from the debate.

Konstantinos Komaitis encouraged everyone to submit their comments on this to the European Commission. The more comments there were, the better they could make the case that legislation was not required and would have a negative impact.

Carsten Schiefner of Instra Corporation said there was no model yet for sharing costs. This suggested operators wanted to contract directly with CAPs.

Sabine Meyer of BNetzA asked what the goal of this small task team was. She was also interested in an assessment of the potential impact of the proposal. 

Desiree said the deadline for the task team’s response was 19 May and said comments could be emailed to the Cooperation WG’s mailing list. The team would present their full submission at the Cooperation WG session at RIPE 86.

Christian de Larrinaga said it was hard to determine the potential consequences of the proposal. He agreed that external influence in agreements would change market competition. Content would start to become narrower, as only content paying for traffic would be routed. On the other hand, the number of networks would go down, reducing competition. This would have a profound impact on how the Internet and overall communications technologies would evolve. Regulators should therefore be cautious about creating regulation here.

Konstantinos said it was important to participate in this discussion because this was slowly becoming a global trend, with some countries imitating Europe. The community needed to arrest this trend this before it grew too much by expressing their concerns.

Blake agreed that this had strong implications outside of the EU, such as in developing markets. Implementing legislation would send the message that there should be heavy government interference in connections on the Internet.

Desiree thanked attendees for their comments and encouraged them to continue the discussion on the mailing list. The chairs would share if there were any new developments with the small task team.

Johan Helsingius also thanked attendees and the small task team.