Net neutrality dispute

A1 for “Netflix toll”: subscriptions could become more expensive

The A1 company headquarters in Vienna

(Bild: A1)

The Austrian telecoms group A1 (Telekom Austria) is once again campaigning for a kind of "streaming toll": US internet companies such as Netflix or Amazon, which generate a particularly high volume of data traffic, should share in the investment costs of the EU telecoms industry, the largest domestic provider is demanding. According to CEO Thomas Arnoldner, "a rethink is underway at the EU Commission in Brussels".

However, it could become more expensive for subscribers to streaming services if the politicians implement A1's wishes: After all, the major providers such as Netflix, Disney and co. could simply pass on the "toll" costs in the form of higher subscription prices.

The biggest hurdle to making streaming giants pay is the EU regulation on net neutrality. Arnoldner points out that this was abolished in the USA in 2017 without any problems arising. However, the EU would not have to go that far. Arnoldner envisions regulated termination fees that are paid by the service providers.

A1 CEO Thomas Arnoldner would like to ask companies such as Netflix to pay for streaming videos via the A1 network. If they continue to charge the fee, subscriptions could become more expensive.

(Bild: APA/HANS KLAUS TECHT)

A1 speaks out against net neutrality
Net neutrality, which has been upheld in the EU to date, means that every data packet on the internet must be treated equally. Internet activists have repeatedly campaigned for a free and open Internet for all. However, competition also benefits from neutral networks in which start-ups enjoy the same conditions as financially strong corporations, advocates warn against the end of net neutrality.

However, Wifo economist Michael Böheim, who studied the issue on behalf of A1, said that a strict interpretation of net neutrality would have a negative economic impact because, among other things, it would slow down the nationwide expansion of broadband. In addition, streaming giants, who have to pay for the costs they cause in the networks, would have an interest in compressing their data packets in future.

Most data traffic is generated by streaming
Arnoldner said that 80 percent of data traffic comes from moving images and 57 percent of traffic is generated by US internet giants such as Google, Meta, Amazon and Netflix. The current situation is that the public sector finances broadband expansion with taxpayers' money, while the profits flow to the USA and value creation therefore takes place outside Europe.

According to Arnoldner, there is an investment gap of 200 billion euros in the EU. It would only be fair if, in addition to the public sector and providers, internet companies also had to contribute to the costs of network expansion. Arnoldner compared the debate with that over a kilometer-based truck toll, which had ultimately ensured cost transparency on the freeways.

Providers have been lobbying for a "streaming toll"for years
The call for a "streaming toll" is nothing new. In 2022, the lobby group "Internetoffensive Österreich" called for a "gigabit levy". In 2021, 13 CEOs of European telecoms providers campaigned for a "fair contribution" from the US tech industry. In addition to Telekom Austria, the signatories at the time included Deutsche Telekom, Telefonica and Vodafone.