Euro-IX, the association of European Internet Exchange Points, expressed their concerns about the ‘Sending Party Network Pays’ model and its potential impact on IXPs. In a letter sent to the EU in early January 2023, Euro-IX opposed the ‘fair share’ argument that proposes Big Tech should pay network costs to telcos to help fund network maintenance and upkeep.
This has been a complex issue that has continued to trouble policymakers and industry. Euro-IX recognised the need of some form of regulatory adjustment to address the issue of great network costs that operators face, but raised concerns about the SPNP model, including:
- Increased costs of concluding interconnection agreements.
- Inhibiting networks’ choice to peer.
- Reduced interconnection density and quality of service for end users.
- Replacement of the current market-based model for interconnection with a highly regulated market wherein administrative rules rather than technical considerations become the primary determinant of interconnection decisions.
- Accidental creation of new systemic weaknesses in critical infrastructure.
Pointing to the recent case of South Korea, where mandatory termination charges have resulted in reduced service quality and security, Euro-IX warned that regulation as proposed by SPNP would ‘… be detrimental to the correct functioning of the Internet connectivity and peering market and distort competition therein’.
As this continues to be a live debate, we will have to keep an eye out for developments in Europe to see how the policy landscape may change in Australia.