What is the
" internet toll" ?

Major telecommunications companies are always in pursuit of new revenue sources. Now, in 2023, a strategy that has been gaining momentum echoes proposals from the era of telephone company monopolies. ISOC has already commented that this is a global industry strategy but one that has been consistently rejected. For instance, In Europe, during the initial stages of streaming’s widespread adoption (around 2012), telecommunications companies sought higher payments from major platforms to facilitate the delivery of video services to end-users. This proposal was rejected back in 2012, and subsequent iterations of the same policy met the same fate. The updated guise for this policy is now labeled as “cost-sharing” or “network fees,” masquerading under the pretense of fairness, and it has been coined by major operators as a “fair share” initiative. However, in reality, it operates in precisely the opposite manner. Both within the European Union and here in Brazil, the landscape closely mirrors one another. On one side, the major telecom operators advocate for the proposal, while on the other, all other stakeholders, including smaller telecom operators who collectively hold over half of the national market, vehemently oppose it. This alignment is not coincidental. The measure is fundamentally flawed from a technical perspective.

In truth, the concept of “cost-sharing” is inherently unjust and runs counter to the fundamental dynamics of the Internet itself. The Internet’s ecosystem comprises independent networks that voluntarily interconnect, predominantly operating through mutual agreements that foster a collective system of connectivity among all participants. The Internet functions in this manner because it was designed to be an open and interconnected realm. The notion of introducing “tolls” where certain services must pay to deliver their content to users could potentially result in the effective fragmentation of the Internet. In such a scenario, as users, we would no longer enjoy unrestricted access to the interconnected and pervasive infrastructure we are accustomed to. Instead, we would transition to a reality in which access is contingent upon those who can afford to pay for specific services through their providers. Decades of accumulated knowledge affirm that a “toll-free” network is not only more efficient and resilient but also provides the flexibility required to accommodate new applications. Conversely, a “toll” network operates counter to these principles, stifling online activities over time, deterring innovation, creating perverse incentives, fostering market concentration, diminishing the quality of services, and simultaneously inflating costs.

Anatel has initiated “Tomada de Subsídios No. 13/2023 (“Public Consultation No. 13/2023”)” to gather input from users and telecommunications service providers. However, it is crucial to note that the concept of Internet tolls has already found its way into the regulatory agency’s 2023-2024 Agenda Regulatória 2023-2024 (“Regulatory Agenda 2023-2024). Major telecommunications corporations are staunchly supporting this concept. During a special event, Claro S.A. asserted that “investing in telecommunications in Brazil is not attractive,” a statement that is misleading, to say the least. Furthermore, Vivo S.A. drew an inaccurate analogy between the Internet and the credit card market, a technically unsound comparison for a platform designed to operate within an open and efficient architecture. Neither the prominent telecom operators nor Anatel have been able to substantiate, with concrete evidence, the existence of a market problem necessitating the approval of a misguided regulatory framework for a non-existent issue. This underscores the urgency of taking action and putting an end to this proposal immediately.

South Korea was the initial testing ground for a prototype of the cost-sharing policy, and the outcomes were far from favorable. This Asian nation stands as a trailblazer in the realm of digital transformation, boasting a high-quality Internet infrastructure. However, since the policy’s implementation in 2020, the overall landscape has undergone a significant transformation. The prevalence of voluntary agreements among Internet providers has dwindled, leading to an increased reliance on international networks. Presently, the cost of network transit in Seoul is tenfold higher than that in Frankfurt or London. The Internet Society (ISOC) has conducted an exhaustive study on this matter offering detailed insights.

In Europe, there is unanimous opposition to cost-sharing (with the notable exception of major telecom operators). This opposition includes governments, regulatory bodies, scholars, Internet companies, small and medium-sized service providers, digital platforms, consumer advocacy groups, civil society organizations, and a diverse array of stakeholders. Here in Brazil, the chorus of dissent is growing. While the issue has only recently gained momentum, we are witnessing an increasing number of voices joining the ranks of the opposition, and this emerging resistance should be duly considered in Anatel’s Subsidies.