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Compensation between Content and Application Providers (CAPs) and network operators: An evolving discussion

Are online platform providers obliged to fund the broadband networks in the EU?



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Over the past year, a number of large EU network operators have argued that the largest online platform providers, based mainly in the US, should be obliged to make additional contributions to fund the deployment and operation of broadband networks in the EU. They base this claim on growing internet video traffic. What does neutral scholarship tell us about this proposal?

  • Internet traffic has always been growing. Is traffic growth faster in relative terms today than in the historic past?
  • Does any increase in traffic imply an increase in cost to the network operators? Which network operator investments are relevant?
  • Does any increase in traffic imply an increase in cost to the CAPs? Which CAP investments are relevant?
  • Who is responsible for any increase in traffic?
  • Do the BEPS/G20 reforms to corporate taxation play into this discussion, since they mainly impact the same CAPs?
  • Are any changes to compensation arrangements warranted? If so, in an ideal world, who should pay how much to whom?