S fast internet? That’s actually what most people want. Municipalities want it because then they become attractive as a location. The network providers have an interest in this because they can then sell their customers more expensive tariffs with higher performance. Consumers want this if they want to use data-intensive services, such as video streaming or online gaming. Providers like Netflix and Amazon with their video and cloud services would benefit because more customers would then be able to use their offerings more intensively. And politicians are in favor of anything that potentially ensures economic growth anyway.
The EU Commission also wants fast internet. So: improving the framework conditions for this, strengthening the internal market, that is at least the declared aim of the Digital Networks Act (DNA), which the Commission proposed on Wednesday.
The legislative process is still in its early stages, but consumer advocates feared in advance that there could be more problems than solutions in the end. And that has, among other things, to do with a central question: Who actually pays for the network expansion? The legislative process is still in its early stages, but consumer advocates feared in advance that there could be more problems than solutions in the end. And that has, among other things, to do with a central question: Who actually pays for the network expansion?
The operators of the network infrastructure, in Germany such as Telekom and Vodafone, have been drumming for this for a long timethat the providers of data-intensive services, for example Netflix, Amazon and YouTube, which belongs to Google, should be directly involved in the costs of network expansion. Their argument: The amount of data that the big tech companies send through the internet is constantly increasing. On the other hand, the income of infrastructure providers would decrease. There is therefore a need for a way in which direct payments flow from the providers of data-intensive services to the network operators.
What sounds fair at first glance has several catches. First: If, for example, video streaming providers have to pay Telekom and Co., then the former will not simply record their higher costs as a loss, but will pass them on to the customers. Meanwhile, there is no guarantee that network providers will actually invest their additional income in fiber optic expansion – and not simply use it to improve their balance sheets.
Second problem: Companies the size of Amazon, Google or Netflix could easily afford additional fees. Those who cannot do this: small or non-commercial services. So they would have significantly worse cards in their negotiations with the network operators than their big competitors. However, in a situation in which the market is already unsightly concentrated, it would be a bad idea to increase the barriers to entry for smaller providers.
Ultimately, this would undermine the principle of network neutrality. Net neutrality means that the infrastructure providers treat all data that passes through equally. It doesn’t matter whether it’s an email or a video stream, and no matter which sender it comes from and who it goes to. The principle is intended to ensure that network providers do not favor individual services or types of data and disadvantage others, thereby creating or reinforcing an imbalance in the market. However, consumer advocates already suspect that individual network providers are not consistently complying with network neutrality. The Federal Association of Consumer Organizations (vzbv) therefore announced in the spring Complaint filed with the Federal Network Agency, which monitors compliance with network neutrality.
The EU Commission now emphasizes in its proposal: Net neutrality should remain. It is hoped that she will stay in this position. But there is no reason why Big Tech should not contribute to the costs of network expansion. Because there is a solution that combines net neutrality and Big Tech participation: a digital tax. The tax could be measured based on the turnover of companies. This means that the big companies in particular would have to make a significant contribution. A practical side effect would be that the income from this would go to the state – and the state can decide where, for example, funding for network expansion is most urgently needed.