The future of the electronic communications sector and its infrastructure–Video Games Europereply Section 4 represents the part in which Video Games Europe was able to provide the most responses: we are concerned by the calls from large telecom companies for direct contributions from large bandwidth users, including over-the-top media services (OTTs) and creative content providers, to cover the cost of telecom infrastructure. BEREC’s preliminary assessment of this matter, published in October 2022, concluded in this fashion, and we are of the opinion that the status quo has not changed. Such proposals not only erroneously correlate highbandwidth with high profit margins but, more fundamentally, would pose a threat to the sustainability of European creative sectors such as video games, without bringing tangible benefits for consumers and business, quite likely the contrary. Video Games Europe's concerns around the introduction of a mandatory contribution stem from multiple points: Not only there is no evidence of ‘free riding’ by content providers, nor has a market failure been identified in this regard, but the introduction of network fees would effectively extinguish the possibility of maintaining net neutrality in the EU.

andatory contribution stem from multiple points: Not only there is no evidence of ‘free riding’ by content providers, nor has a market failure been identified in this regard, but the introduction of network fees would effectively extinguish the possibility of maintaining net neutrality in the EU. Video games are subject to frequent updates, some of them legally required, which represents legally mandated traffic. Moreover, should network fees be introduced, given the increasingly global nature of the digital economy, such measure would mainly penalise Europe, notably its consumers and businesses, with no real benefits. Moreover, investment in data centers and other types of network infrastructure is already part of many of Video Games Europe's members’ modus operandi. The environmental impact of network fees should also be considered, as new technologies can make, and do make, substantial contributions to carbon intensity reduction, and the introduction of these fees could very well have a chilling effect on this progress. Lastly, consumer welfare is likely to be negatively impacted, as network fees could lead to increased prices for consumers, alongside lower quality/diminished quantity of content. We will subsequently expand on each of these points: 1. There is no evidence of ‘free riding’ by content providers The assertion that creative content providers, such as video game providers, disproportionately enjoy the benefits of the internet ecosystem without contributing to it must be critically assessed.

ently expand on each of these points: 1. There is no evidence of ‘free riding’ by content providers The assertion that creative content providers, such as video game providers, disproportionately enjoy the benefits of the internet ecosystem without contributing to it must be critically assessed. Large European telecommunications operators argue that growing demand for content and applications is a problem - rather than an economic opportunity. This myth has tended to cloud the European policy debate and needs to be addressed. Creative content providers invest significantly in content to the benefit of consumers, but also to ISPs – the popularity of creative content services is the main driver of selling and upselling of internet access services. A possible introduction of network fees could have unintended consequences on the significant investments made by the sector in a wide range of diverse creative and cultural content. One of the underlying assumptions of the ISP claims for payments from large Content and Application Providers (CAPs) is that the latter are “free-riding” on ISP infrastructures. Thus, CAPs would use this infrastructure without ISPs being (fully or partially) compensated for it and, therefore, costs incurred by ISPs would not be covered. A closer look suggests that there is no evidence of “free-riding” along the value chain. ISPs’ customers (consumers and businesses alike) buy internet connectivity and pay for sending and receiving traffic: Costs for deploying and