Innocenzo Genna on Europe’s 2% interconnection threshold

Summary

The European Parliament rapporteur’s draft report would make providers that originate or deliver at least 2% of EU downstream traffic subject to interconnection negotiation duties and national-regulator dispute resolution.
Innocenzo Genna argues that the threshold could create a rush of claims without supplying the cost-allocation rule that would turn those disputes into a settled payment system.

Analysis

Two per cent is a small line to draw across Europe’s internet traffic. In the draft Digital Networks Act report now before the European Parliament, it is also the point at which a content or infrastructure provider could be pulled into telecom interconnection rules.

At RIPE 93 on 28 October, telecom lawyer Innocenzo Genna told the Cooperation Working Group to read the proposed text, not the older “fair share” headlines. The European Commission’s proposal largely keeps interconnection grounded in commercial negotiation and voluntary cooperation. The sharper change sits in a draft report from the Parliament’s rapporteur, Michał Kobosko.

The draft report, PE791.994, defines a “significant traffic provider” as an undertaking that, alone or with its corporate group, originates or delivers at least 2% of total downstream traffic to end users in the EU. The test uses an average during peak hours over the preceding calendar year. It applies regardless of where the provider is established or whether it is already classified as an electronic communications network or service. Traffic carried through third-party CDNs or transit providers would be attributed to the undertaking that originated it, and counted once.

That definition would do more than label a large provider. The report would extend the duty to negotiate interconnection beyond public electronic communications networks to providers meeting the threshold. If talks failed, either side could ask the national regulatory authority for a binding decision. The draft gives the authority up to four months in ordinary cases to resolve the dispute.

The rapporteur’s case is that a provider responsible for a substantial share of traffic can affect service interoperability and bargaining conditions for receiving networks. Group-level counting and attribution through transit or CDN services are meant to stop a company from slipping below the line by shifting delivery between affiliates or intermediaries. The European Parliament’s procedure record lists PE791.994 as a committee draft report tabled on 20 October. The file was still awaiting a committee decision on 1 November; this is not enacted law.

Genna’s objection is about the incentive created by the new route. At present, a large share of interconnection is handled through commercial agreements. A mandatory negotiation duty plus regulator arbitration gives operators another place to press a claim. He argued that companies may pursue that option in the hope of recovering network costs, even though the 2% amendments do not set a formula for reallocating those costs. The text can open the dispute door without deciding who pays at the end of the corridor.

The draft adds no network fee. It adds a new legal status, a negotiation obligation and a route to a regulator’s binding decision. Future disputes could turn on the threshold, traffic accounting, the meaning of an interconnection request and the remedy a regulator may impose. Genna expects more legal argument in a market that had been comparatively calm; the draft supplies no automatic transfer of money.

The Commission proposal remains the baseline for negotiations; the rapporteur’s report is one proposed Parliament position. Whether the threshold survives, and what measurement and remedy rules accompany it, will decide whether 2% remains a line on paper or becomes a recurring regulator case.