Cloudflare opposes Europe's plan to make Big Tech help pay for networks

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https://www.theregister.com/2023/05/09/cloudflare_opposes_europes_network_usage_charges/

Cloudflare has decided to oppose the European Union’s proposed network usage fees that would see generators of internet traffic required to help telcos pay for their network builds – but not for entirely altruistic reasons.

The EU’s thinking is grounded in the fact that most of the content passing over carriers’ networks comes from Content and Application Providers (CAPs) – Europe’s term for the likes of Netflix and YouTube which pour data onto the world’s networks, leaving carriers to deliver it to users. Telcos complain that they end up having to spend billions on new networks, while CAPs cream the profits.

In February 2023 the EU therefore commenced a consultation into whether CAPs should contribute to the cost of the networks on which they rely to deliver services to consumers.

Big Tech hates the idea of such "network usage charges," arguing that it already pays for submarine cables and other network infrastructure. In the one jurisdiction where such charges have been made law – South Korea – litigation over their legality is ongoing.

Cloudflare's objection to network usage charges stems from its assessment that Europe's big telcos don't practice open peering – voluntary interconnection with other networks without charge. Rather, Cloudflare suggests, Euro-carriers prefer to pay transit networks to carry data among networks.

Doing so can introduce some extra network hops, which isn't optimal. But because it's hard for every network to peer with every other network, transit networks are useful and important. Cloudflare would rather its European users could get to its services directly, and can live with some accessing it over transit networks.

But Cloudflare worries that the EU's network usage proposal would effectively set a price for transit.

The org's senior manager for public policy in Europe, Petra Arts, and director of network strategy, Mike Conlow, argue in a blog post that "Once there's a price for interconnection between CAPs and telcos, whether that price is found via negotiation, or more likely arbitrators set the price, that is likely to become the de facto price for all interconnection."

Cloudflare opposes Europe's plan for network usage charges

Prefers open peering – from which it profits

www.theregister.com