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Plum Consulting finds “FFT’s proposal is misguided” in recent analysis

Brussels – 14 February 2023 The recently re-opened discussion on Sender Party Network Pays proposal (SPNP model) continues to stir the debate in the EU. Internet Service Providers (ISPs) argue exponential growth in traffic demanded by its broadband customers leads to incremental cost, and call for a content levy for traffic to be paid by Content and Application providers (CAPs).  An official consultation by the European Commission on the future of the connectivity sector is expected shortly.

The Fédération Française de Télécoms (FFT) released a note entitled “For a fair contribution of large bandwidth users to network financing”. Plum,  commissioned by Google, has performed an analysis of the French note. The analysis was launched today. Plum Consulting investigates the FFT’s arguments, questions the debatable base of reasoning of the note and concludes “An SPNP model would lead to negative outcomes for both telecom industry and consumers. It adds it would be challenging to implement a SPNP model both on regulatory and legal grounds.”

“This absence of a market scope and proven market failure make the legal and regulatory basis for the FFT’s solution unsound,” says Benoît Felten, director Plum.

Plum argues the FFT methodology is designed to achieve financial targets while no market, market power or market failure is demonstrated. At the same time, the proposed measures contravene the EU’s Net Neutrality measures and generate negative outcomes for the market and ecosystem. The FTT doesn’t specify how it intends to measure to ‘increasing’ share of traffic ISPs claim to have seen and seems to ignore the fact that all traffic is generated by the end user requests. Contradictory to current EU legal frameworks, the FFT wants to impose a financial contribution on CAPs. Such contracts do not have a clear legal basis in the EU.

All in all, the Plum study shows the FFT’s arguments are unsound at various levels and would have serious negative outcomes.

You can download the paper here: Analysis of the FFT Sender Party Network Pays proposal.


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