Would Network Tax Bring Better Broadband?

It ain’t easy being telco. €100 Billion Euro public support and dividend pay-outs five times above average…  are we sure this is where the state needs to step in and dictate a new revenue-stream? Enter The Network Tax a k a The Sender Pays.

Once celebrated concepts of network neutrality and open internet are old hat when EU telcos look for new revenue. Many interesting failures to broaden income have led to this point. Remember the experiments in central-Asian “emerging markets”, where telcos ended up supporting dictators chasing down democracy activists? Or the fonky-labelled subscriptions for young demographics? Integrating services and content with connectivity, anyone? In the end, it turns out that telcos rely on two main sources of revenue: subscriptions and public money.

ECIPE – a Brussels think-tank – looks into this in a recent report and the findings should be a cause for concern for any fan of European telecoms. At the moment, the European incumbents receive Billions of Euros in public support, but that goes to investment in non-EU markets and pay-outs to share-holders rather than domestic infrastructure. The proposed network tax-regime would bring market concentration, discourage infrastructure investment and potentially bring market disruption where platforms by-pass the telecoms, accessing users directly. Not to mention pricier access for European consumers (need I add it would be poor timing considering the macro-economy and pressure on households?).

Does this blog post put Netopia in the same camp with Big Tech? Maybe, but I’d rather be asking question than making suggestions. In any case, rest assured Netopia will continue to criticize Silicon Valley whenever called-for. Stay tuned.