ISOC/ITS Webinar – Unpacking Civil Society Perspectives on the Cost-Sharing Proposal
In 2023, the debate on the cost-sharing policy within network infrastructure has gained momentum, spurred by the major telecommunications operators, often referred to as the “big telcos.” In Brazil, this issue found a place on Anatel’s agenda through Public Consultation No. 13, eliciting a substantial response from various civil society stakeholders.
In September 2023, ISOC Brasil and ITS Rio convened a webinar, bringing together representatives from civil society, academia, and the technical community to delve into their contributions. Below, we spotlight critical insights from the event, with the complete speeches available in the video and podcast, accessible here.
This content is part of “The Internet Toll” campaign, designed to foster a nationwide technical debate on the cost-sharing proposal. The campaign has already provided essential resources, such as the Reference Library and the map detailing contributions to Anatel’s Public Consultation, including our own input.
Here are the ten crucial elements for comprehending the cost-sharing proposal:
The purported problem targeted by the cost policy simply does not exist. This has been deliberated in both European and Brazilian debates, emphasizing that there is no issue to be rectified. To echo Demi Getschko, “If it’s not broken, don’t fix it.”
The cost-sharing policy introduces a logic contradictory to the longstanding operation of the Internet, which relies on public incentives and the promotion of voluntary agreements between network layers. Paloma Rocillo underscores the lack of data demonstrating issues with this mode of operating network infrastructure.
The proposal directly contradicts the principle of net neutrality by mandating the discrimination of data packages. As Flávio Rech Wagner explained, the ramifications of this measure on the Internet are profound, encompassing the concentration of various digital markets.
The proposal encourages Internet fragmentation, restricting users to content covered by commercial agreements between their respective connection providers, as noted by Flávio Rech Wagner.
Cost-sharing fosters economic concentration, posing significant risks to both the infrastructure layer (small telcos and internet providers) and the application layer (small and medium-sized digital companies). Flávio Rech Wagner notes that the proposal has garnered support solely from large telecom operators.
The proposal establishes a cross-subsidization model, wherein the profit from one sector finances the inefficiency of another, as indicated by Flávio Rech Wagner. This model, akin to the credit card market, has universally failed to provide access to the banking system, a point emphasized by Fabro Steibel in light of the impact of the PIX payment technology.
Contrary to assertions by major telecom operators, the application layer heavily invests in network infrastructure, covering everything from submarine cables to the distribution of localized products, as highlighted by Veridiana Alimonti. Such investments would be discouraged under the proposed policy.
Consumers will bear the brunt of the costs passed on and experience a reduction in content delivery. The principle is akin to credit card market operations. As Flávia Lefèvre points out, this solution raises significant questions, even from the perspective of the Court of Auditors.
The negative experience in South Korea serves as a cautionary tale, revealing adverse effects on local internet infrastructure. Paula Bernardi emphasizes ISOC’s valuable reference material on the negative impacts of implementing this policy in that country.
Finally, Anatel lacks the competence to regulate this matter, as asserted by Flávia Lefèvre. Despite the agency’s attempts to stretch its authority, the illegality of the operation is evident, thereby creating legal uncertainty.
Here are the key points from each expert who participated in the meeting organized by ISOC Brasil and ITS Rio:
Flávio Rech Wagner, President of The Internet Society – Brazilian Chapter:
“Across all supportive contexts for the cost-sharing proposal, it’s evident that endorsement primarily comes from major telecom operators, with dissenting views prevailing among other societal stakeholders.”
Demi Getschko, CEO of NIB.br:
“If it’s not broken, don’t fix it. In this particular case, what is considered broken remains unclear. When I have broadband in my house, I can contract the service I want; meanwhile, the content provider contracts another broadband service to transmit content. This arrangement seems satisfactory to all intermediaries, and if I opt for more broadband, I understand that I’ll incur additional costs.”
Flávia Lefèvre, The Net Rights Coalition:
“Aside from the legal aspects that cast doubt on Anatel’s actions, the efficacy of this solution in fostering increased infrastructure investment is highly questionable, a stance supported by decisions from the Federal Court of Auditors.”
Paloma Rocillo, Director of IRIS:
“We lack sufficient transparent and accessible information to ascertain whether there is indeed an infrastructure deficiency in Brazil.”
Paula Bernardi, Senior Policy and Advocacy Advisor at the Internet Society:
“The Internet Society has produced documents that precisely outline the impact of the regulations related to cost-sharing in South Korea.”
Veridiana Alimonti, Associate Director of Latin American Policy at the Electronic Frontier Foundation:
“These are the fallacies that underpin the cost-sharing proposal.”