After defeat in Dubai, Europe’s telecommunications operators held fire. The EU introduced the Open Internet Regulation, protecting net neutrality after many of the same European telecom companies were found to be arbitrarily blocking access to online services that they deemed to be competing with them, such as VoIP providers like Skype. But after a few years, the operators brought their fight back to Brussels. Their main trade group ETNO, renamed itself Connect Europe and wielded its familiar arguments about the need to charge big content providers additional fees.
The campaign kicked off in 2022, when the European Commission first proposed a Declaration on Digital Rights and Principles, set ambitious connectivity targets for the continent to achieve average one-gigabyte upload and download speeds, and stipulated that “all market actors’’ should make a “fair and proportionate contribution” to the cost of the required infrastructure. The Commission’s Digital Decade Policy Programme 2030 codified these targets.
The political climate looked favorable. The EU had spent the previous decade cracking down on US tech, imposing a series of tough laws. The General Data Protection Regulation to protect privacy was followed by the Digital Services Act to combat illegal content and the Digital Markets Act to reign in powerful “gatekeepers.”
Thierry Breton, former director-general (CEO) of France Télécom, served as the European Commissioner responsible for digital affairs. In 2023, he gave a speech calling for the imposition of Network Fees. “At a time when technology companies are using most bandwidth and telco operators are seeing their return on investment drop, this also raises the question of who pays for the next generation of connectivity infrastructure,” he explained. “The European Declaration on Digital Rights and Principles for the Digital Decade already established that all market players benefiting from the digital transformation should make a fair and proportionate contribution to public goods, services, and infrastructure.”
Delighted, Europe’s incumbent telecom operators launched an aggressive lobbying campaign. They commissioned a report by Analysys Mason asserting that — despite high levels of telecom investment — roll-out is still too slow and private investment in Europe remains lower than that of global peers. “Tech giants generate disproportionate network costs with respect to consumers, and they monetize this through advertising and exploitation of personal data, it is only logical for tech giants to contribute to network roll-out.” Another commissioned report by Axon consulting built on these arguments to unashamedly demand an “annual contribution of €20 billion by OTTs [Internet companies] to the development of telecoms infrastructure in the EU.”
The battle turned ugly. A US-based tech association commissioned a new Analysys Mason study that pointed to €183 billion on internet infrastructure for Europe between 2011 and 2021 alone. These investments save telecom operators “an estimated $5 to $6.4 billion per year in network and transit fees, “bringing local caching servers as close to the end-user as possible, reducing the amount of work for telcos.”
The two sides traded other barbs. Telcos claimed that they had to absorb an explosive growth in internet traffic, driven “by a small number of leading Over-The-Top (OTT) providers.” Tech companies retorted that traffic growth was stable at best, and independent observers supported the assertion. A study for the German Federal Network Agency reported “relative market saturation for streaming services.” The Body of European Telecom Regulators (BEREC) concluded that “there has been no fundamental change in the general growth tendency.”
Telecom incumbents argued that “telcos’ financial health is being increasingly undermined” by “capital investments required to deal with exponential traffic growth.” Analysys Mason analyzed the numbers and found that “network-related ISP costs increased by 3% in total between 2018-2021, whilst [global] network traffic increased by over 160%.” In reality, this showed that European telecom operators managed steady traffic growth at almost negligible incremental cost.
The biggest disagreement concerned the impact on the fundamental Internet principle of net neutrality — that all traffic, from small and large content providers, be treated equally. Telcos argued that they “are not asking to amend the current EU Open Internet Regulation,” which prohibits the discriminatory treatment of internet traffic — even though Network Fees is all about treating internet data differently, giving preferential treatment to companies who (can afford to) pay to reach customers.
Critics pounced. In a joint letter, members of the European Parliament warned that telcos getting their way “would reverse decades of successful internet economics by requiring the providers of websites and applications to pay fees to ISPs that have never existed before.” Access fees “would abolish key Net Neutrality guarantees that Europeans fought for.” BEREC agreed, forecasting “various risks for the internet ecosystem,” it said in its “preliminary analysis” of the Network Fees proposal.
The bottom line looked clear. “Data is sent to networks because users are requesting it through the internet connection they pay for,” digital rights group Epicenter Works argued. In short, it is telcos’ own consumers that are requesting data, and they have already paid telcos to receive it. “Who would want a cable running through their home if it was not for the content provided by tech?,” asked Communications Chamber consultant Brian Williamson. “After all, it is consumer demand for online content that actually drives demand and revenues for telcos.”
Perhaps the most damning argument of all came from the only country that imposed Network Fees — South Korea. The Asian country was an Internet star, boating widespread bandwidth connections at blazing speeds. In 2016, it imposed Network Fees. The results proved catastrophic, consultant WIK reported. Consumer prices soared. Network speeds plunged. Content providers steered content outside of the country, through Taiwan and Japan. Koreans received less diverse content at slower Internet speeds, while investments in network infrastructure actually declined.
Europeans took note. The European Internet Exchange Association (Euro-IX) warned that the Network Fees in South Korea “resulted in reduced quality and security of the services provided to end-users.” Analysys Mason predicted Network Fees would leave Europeans with “fewer choices and a lower quality of experience, and fewer services for businesses could also slow digitalization.” Indeed, a network usage fee would ultimately end up hitting Europeans directly in their pockets, in the form of more expensive cloud and streaming services.
As the evidence mounted about the dangers of Network Fees, the tide turned against the telecom operators. A new European Commission took over. Mr. Breton was replaced by a pragmatic pro-innovation Finn, Henna Virkunnen. She could be ready to reevaluate the need to introduce Network Fees.
However, a backdoor opened. Instead of asking for direct payments, operators have begun demanding the imposition of a “dispute mechanism.” Content providers would be required to negotiate with the operators for interconnecting their Internet-connected networks, and if they disagreed on fees, regulators would impose them. The proposal to regulate Internet interconnection in this way had already emerged as a mechanism to impose Network Fees, as evidenced by the response from at least one European incumbent telecom operator to an EC consultation in 2023.
A 2025 decision by Italian communications regulator AGCOM exemplified the new battle. It began with a sensitive subject — football. In 2021-2022, British platform DAZN acquired exclusive rights to Italy’s top league, Serie A. Outages and poor-quality streams caused nationwide outrage. AGCOM intervened, ordering DAZN to improve reliability.
AGCOM then required DAZN to obtain a general telecom authorization — a status normally held by network operators. Seizing on this extraordinary precedent, in August 2025, AGCOM brought Content Delivery Networks under the scope of the European telephone code, effectively applying telecom-style rules — including mandatory registration and regulatory oversight — to a critical layer of the Internet.
Telcos rushed to seize the opening. Telecom Italia’s CEO Pietro Labriola was quick to praise the decision, calling it “a turning point” for the telecom sector and a step toward “a level playing field.” In September 2025, the French federation of telecom operators signed an op-ed advocating again for Network Fees, and openly made the link with a dispute resolution mechanism as a fallback option.
Despite AGCOM’s claims to the contrary, the reclassification of content networks reopens the idea that big tech companies should pay telecoms for using their networks. Regulators could impose usage-based charges, turning voluntary interconnection into a regulated cost center, breaking the open architecture of the Internet.
The real-world consequences could be dramatic. If global “providers like Akamai, Cloudflare, or Fastly decide that Italy has become too burdensome or hostile an environment in which to operate — due to increased regulatory costs, data localization demands, or forced revenue-sharing with telecom operators — the impact will be immediate and widespread,” warned Konstaninos Komaitis, Senior Resident Fellow for Global and Democratic Governance at the Digital Forensics Research Lab (DFRLab) at the Atlantic Council. “Telcos will likely hike consumer prices under the pretense of infrastructure investment. In reality, Italians would pay more for a slower, less secure internet.”
The battle soon will come to a head. Every seven years, the European Union updates its telecommunications regulations. It’s a long, drawn-out process. The European Commission proposes. The European Parliament and European Council, representing governments, amend. All three institutions then must agree. The next revision is due to be proposed at the beginning of 2026.
If Europe moves ahead with Network Fees, whether as direct payments or through an indirect arbitration mechanism, the consequences could be dramatic and affect transatlantic relations. In the July 2025 EU-US trade deal, Brussels promised “that it will not adopt or maintain network usage fees.”
Europe stands at a crossroads. The continent acknowledges that it has fallen behind in the digital revolution. “Europe largely missed out on the digital revolution led by the internet and the productivity gains it brought,” former Italian Prime Minister and European Central Bank President Mario Draghi writes in his clarion call for the continent to prioritize economic growth.
The only solution is to defend the bottom-up, open and resilient Internet, which boosts innovation and competitive dynamism, not to protect incumbent telecoms. I know firsthand. For two long decades, I have watched with dismay as entrenched interests have fought to hold back the global Internet. They caused damage, slowing athe doption of what has become the biggest single driver of economic growth. Europe acknowledges its pressing need to boost competitiveness. It acknowledges that its digital regulations go too far, stifling innovation. It vows to simplify the rules. The last thing it should do is introduce backward-looking, counterproductive Network Fees.
Fiona M. Alexander is a Non-resident Senior Fellow with the Tech Policy Program at the Center for European Policy Analysis, a Distinguished Policy Strategist in Residence at the American University School of International Service, and a Distinguished Fellow at the Internet Governance Lab. She serves as a member of the International Telecommunication Union’s Academic Advisory Body on Emerging Technologies, a member of the Freedom Online Coalition’s Advisory Network, and as a Member of the Marconi Society Internet Resilience Advisory Council.
Bandwidth is CEPA’s online journal dedicated to advancing transatlantic cooperation on tech policy. All opinions expressed on Bandwidth are those of the author alone and may not represent those of the institutions they represent or the Center for European Policy Analysis. CEPA maintains a strict intellectual independence policy across all its projects and publications.
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