Data Traffic And Network Infrastructure Investment: The Debate

Telecommunications network operators, providers of online content, and regulators debate whether content providers should contribute to the costs of network infrastructure to promote efficient investment. In this article, Guillaume Duquesne, Cecilia Nardini, and Gabriele Corbetta ¹ review the debate and policy options.

Introduction

In its recent consultation on "The future of the electronic communications sector and its infrastructure", ² the European Commission (hereafter "EC") identifies a potential "paradox between increasing volumes of data on the infrastructures and alleged decreasing returns and appetite to invest in network infrastructure".³

The consultation follows claims by some European telecommunications network operators (hereafter "network operators"). They argue that while network usage is increasing, return on investment is decreasing. This reduces incentives to invest. If true, that could be a problem. If network operators underinvest, it