Data traffic has grown significantly due to COVID-19 and widespread use of videoconferencing. One hour of videoconferencing alone uses between 225 MB -1.6 GB depending on the quality and number of participants.

A recent study estimates that the amount required for foundational online activities (i.e. online public services, health information, shopping, learning and news) to be 660 MB per user per month. If common recreational online activities such as social media use are included it adds an extra 5.2 GB for a total of approximately 6 GB per month.

The policy debate on whether the current structure of cost recovery is optimal and whether OTT platforms should contribute to these costs is gathering pace. The key issue is that telecommunications operators have invested to ensure that their networks can support the exponential growth in OTT traffic but are, to date, only able to recover network costs from end users despite the two-sided nature of infrastructure markets. Frontier Economics has estimated that in the EU the weighted average incremental cost of carrying OTT traffic is EUR 11-29 per subscriber on fixed networks and EUR 20-33 per subscriber on mobile networks.

In May 2022 Axon Partners published a report commissioned by the European Telecommunications Network Operators (ETNO) that examined the benefits of contributions by leading OTT players to the cost of building telecommunications networks in the European Union. The report concludes that annual contributions by leading OTTs could increase the EU’s GDP by as much as EUR 72 billion by 2025, with a parallel increase in employment of up to 840 000 jobs annually; positive effects on both user experience and innovation levels; and a steep reduction of energy consumption and carbon emission levels. The report also recommends new regulation to “define a clear obligation for the OTTs concerned (i.e. only the largest among them) to negotiate the conclusion of a direct agreement with ISPs/telcos upon request, and to accept to pay a fair and proportionate contribution to network usage costs, and other conditions in such an agreement” and regulation that sets out procedures and substantive principles for the conclusion of these agreements, with a relevant supervisory and enforcement body, and the establishment of an effective and compulsory dispute resolution mechanism¹, similar to the recent innovation in the Australian News Media and Digital Platforms Mandatory Bargaining Code. Under this Code, the Australian Communications and Media Authority is empowered to appoint mediators and, in some cases, arbitrators for the resolution of disputes if news media and digital platforms cannot reach an agreement.

To date OTT platforms maintain their opposition to contributions and the debate in Europe continues. The European Commission also supports the proposition that platforms make “a fair and proportionate contribution to the costs of public goods, services and infrastructures”. The outcome in the EU will set an important precedent for the rest of the world.

Finally, while the target looks at service charge affordability, the price of a broadband-enabled device is often a bigger barrier, especially for non-Internet users. A report from A4AI found that that the average world price for a smartphone in 2020 was around one-quarter of monthly income with large gaps among geographical and income groups. In South Asia the figure rises to 40 per cent and in the LDCs it is 53 per cent. Among its recommendations for lowering device prices, A4AI calls for using USF funding to subsidize the cost highlighting the examples of Malaysia and Costa Rica. GSMA published a report with an overview of business models, innovations and policies that are helping to improve the affordability of Internet-enabled handsets in LMICs, particularly for underserved populations. The Broadband Commission also launched a working group to look into device/handset affordability in more detail.