“European digital toll: Numeum reaffirms its position to the European Commission

In December 2022, Numeum alerted the public authorities to the proposal to create a newcontribution by digital service providers to network financing(see our position). This idea has been put forward for several months by certain telecoms operators, in the name of a “fair share”, and is one of the topics on which the European Commission was consulting.

This “fair share”– or should we call it the “European digital toll” –would call into question the current Internet financing model, which has already proved its relevance, is largely based onfalseassumptionsandcould havedramatic effectson the technological attractiveness of our continent.

Numeum has responded to the European Commission’s consultation, outlining the points we feel are essential to take into account in this debate on the future of electronic communications in the European Union. This response, along with a reminder of our position, also shared with the Commission, can be consulted by clicking on “Download” at the bottom of the page.

Our recommendations

Generally speaking, Numeum pointed out that questioning the current Internet financing model is more ideological than pragmatic: the “European third way” is proving its relevance every day. Today, Internet access is one of the driving forces behind the European economy, enabling new services to be offered in all sectors, including access to public services.

Numeum has made three recommendations tothis effect to the European Commission:

• enabledigital inclusion for all;
• improve the quality of Internet access where necessary;
• harmonize our legislation tomake the European market a true DigitalSingle Market forour companies, including the smallest and most innovative.

Our points of attention

More specifically, Numeum is concerned to see the resurgence of the proposal for a financial contribution: it calls into question a model that works, and is based on biased observations. The list of stakeholders who have already spoken out against this proposal continues to grow: associations from numerous EU countries, MEPs, audiovisual players, academics, alternative telecoms operators, EU member states such as the Netherlands,Germany,Austria, Denmark, etc.

Introducing a “European digital toll” makes no sense, for at least five reasons that we have shared with the European Commission.

1. Demand for high-quality digital services has a positive impact on the financial health of all telecom operators.

The Internet’s current architecture has created a virtuous circle between its various stakeholders. The increasing quality of content offered by digital service providers feeds demand from consumers, who are then more likely to take out subscriptions with their telecoms operators. This digital toll, by benefiting only certain players who already have a major position in their market and are in good financial health, would therefore be to the detriment of smaller operators.

2. Digital service providers already contribute to financing telecommunications networks

The current network architecture is based on co-financing agreements between telecoms operators and digital service providers, and an additional contribution from the latter, with its vague contours, would above all have the effect of making certain companies pay twice.

3. Growth in usage can continue to be absorbed by networks as they are designed today.

Traffic growth is far from exponential, while the bulk of infrastructure costs – 80-90% – are fixed costs in the case of fixed networks. What’s more, the Internet’s current structure has already demonstrated its ability to keep pace with technological innovation and rising demand.

4. Traffic volumes and usage play only a limited role in the environmental footprint of digital technology

Some proponents of digital tolls try to “green” their arguments by showing their proposal as a way of reducing this environmental footprint. However, it should be remembered that our sector is already taking its responsibilities to reduce its environmental impact, in line with national and European regulations, but also thanks to the growing efficiency made possible by the evolution of technologies used by digital service providers. What’s more,the link between traffic volumes and usage and environmental impact is not as strong as the promoters of digital tolls seem to claim. Last but not least, digital technology is essential to accelerate the decarbonization of other sectors of the economy, as demonstrated by the Planet Tech’Care initiative launched by Numeum, which brings together the entire ecosystem and federates over 800 committed signatories.

5. An additional financial contribution could have a dramatic impact on the European innovation ecosystem and the prices paid by users.

With this proposal,the entire digital value chain could be affected sooner or later. There is a potential here to create barriers to entry for the smallest companies: one step away from differentiated treatment of services according to contribution level – in total opposition to the principles of the open Internet enshrined in European law since 2015. This would put a stop to innovation and the development of our innovative startups and scaleups. What’s more, there is a danger that such costs will be passed on to end-users, whether individuals or professionals, as can be seen in countries that have introduced digital tolls, such as South Korea.

The way networks are currently run and financed proves their relevance every day: let's not change a model that works!

Co-funded by public authorities, telecoms operators and digital service providers, our “European-style” Internet is capable of supporting the development of both individual and corporate users, within a legal framework that protects users’ rights and safeguards the duties of access providers.

At a time when the Digital Decade 2030 program aims to ensure that 75% of European businesses use cloud, big data and artificial intelligence services, achieving this ambition requires a boost, not a brake on innovation. Numeum will be vigilant to ensure that the European Commission’s proposals resulting from this consultation reinforce the principles of the open Internet, enable the smallest innovative companies to develop in a strengthened digital single market, to the benefit of the connectivity of all European users – and that they do not lead to the introduction of a “European digital toll” with harmful consequences for our society and our economy.