EU Backs Down on Network Usage Fees... Netflix Says "We Spent 79 Trillion Won"

Atmosphere at MWC Unfolds Differently Than Expected Clash
Netflix States "Network Usage Fees Cause Creative Decline"

The European Union (EU) has stepped back from its stance that large information technology (IT) companies, so-called ‘big tech,’ should be charged fees for network usage. In response, Netflix, a leading global content provider, immediately launched a counterattack.

At the world’s largest mobile telecommunications exhibition, Mobile World Congress (MWC) 2023, which opened on the 28th of last month (Korean time) in Barcelona, Spain, the issue of network usage fees was raised once again.

Thierry Breton, the EU Commissioner for the Internal Market, stated in his keynote speech on the first day of MWC, “We need to find a funding model to fairly distribute the massive investments required for telecommunications infrastructure,” but he also added, “It is not a binary choice between network providers and traffic suppliers.”

This cautious attitude contrasts with Breton’s earlier tweet just before the opening of MWC, where he targeted Netflix. At that time, Commissioner Breton posted an image capturing the Netflix screen with the phrase, “Telecom infrastructure costs trillions, so who should pay for it?”

Thierry Breton, European Union (EU) Commissioner for Internal Market, is delivering a keynote speech at MWC 2023. [Image source=Yonhap News]

As the EU took a more cautious stance, the atmosphere at MWC shifted away from expectations of a clash with major content providers like Netflix and Google. Netflix seized this opportunity to argue against imposing network usage fees on big tech.

Greg Peters, Co-CEO of Netflix, said in his keynote speech on the second day of MWC, the 1st, “As Commissioner Breton said, the discussion about network usage fees is not a matter of choosing between large telecom companies and entertainment firms.”

He continued, “Over the past five years, Netflix has invested more than $60 billion (approximately 79 trillion won), which is about half of its revenue, in content,” emphasizing, “This has created a virtuous cycle where more people want better internet services.”

He added, “Double charging for network usage fees would lead to reduced investment in content and a decline in creativity, which would diminish the appeal of expensive telecom plans and ultimately harm consumers.”

Meanwhile, discussions on legislating network usage fees have reached a deadlock in South Korea as well. Members of the National Assembly’s Science, Technology, Information and Broadcasting and Communications Committee who attended MWC avoided giving direct answers, saying, “Now is not the time to discuss this.”