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By Audrey Hingle —

How Not To Regulate the Middle Mile

How Not To Regulate the Middle Mile
Photo by Miguel A Amutio / Unsplash

In our main story, Konstantinos Komaitis writes that Italy is quietly laying the groundwork to regulate CDNs like telecom companies, a move that threatens the open internet and could open the door to network fees across Europe.

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How Not To Regulate the Middle Mile

By Konstantinos Komaitis

Italy is quietly laying the groundwork to regulate CDNs like telecom companies, a move that threatens the open internet and could open the door to network fees across Europe.

AGCOM Targets CDNs

The Italian telecoms regulator, AGCOM, launched a public consultation last month seeking to investigate the regulatory treatment of Content Delivery Networks (CDNs) under the European Communications Code (EECC) Directive 2018/1972. CDNs are distributed networks of servers located across geographic regions to deliver digital content like videos, images, software updates, and websites more quickly and reliably to end users. By caching and serving content from servers closer to the user, CDNs reduce latency, ease congestion on networks and improve performance making them essential infrastructure for modern internet services.

At the moment, CDNs are treated like unregulated infrastructure or value-added services. AGCOM is examining whether CDNs should be treated more like telecom providers from a regulatory standpoint, by bringing them under the general authorization regime set out in the EECC, which applies to providers of electronic communications services. This would involve extending the general authorization regime to two categories of actors:

  1. Content and Application Providers that own, manage, or control a CDN within Italy to distribute their content to end customers.
  2. CDN providers that operate infrastructure physically located within Italy.

If adopted, this change would force CDN operators and content providers to register with AGCOM and comply with regulatory obligations originally intended for traditional telecom services. These could include burdensome reporting requirements, interoperability mandates, and potentially even financial contributions. These measures could undermine the agility that CDNs bring to the internet. 

Italy’s Pattern of Overreach: Piracy Shield

Italy has long been a problem child for the open internet. Its poorly written "Piracy Shield" law was intended to combat online copyright infringement by blocking access to websites and services that illegally stream or distribute pirated content. It allows rights holders to file complaints with long lists of domains they want blocked, and gives ISPs 30 minutes to block those domains. As a result, mistakes have been made that affect the entire country, like blocking many sites that use the popular security service Cloudflare, and blocking the entirety of Google Drive. There is no transparency around how blocking decisions are made, or how the system works and the fallout from these missteps has caused widespread, disproportionate disruption to the open internet.

Appeasing Telcos by Shifting the Burden

Now, Italy wants to expand its regulatory overreach to CDNs in an effort to appease telecommunications companies who have long pushed for large content providers to contribute financially to network infrastructure. The inclusion of CDNs in the general authorization regime will set a very treacherous precedent, giving telcos a potential legal basis to demand network fees or impose regulatory conditions on CDN operators. This comes just as Europe is working on the upcoming Digital Networks Act, where such frameworks could be expanded or codified.

What AGCOM is trying to do is clear: it’s attempting to push controversial network fees through the "backdoor" by invoking Article 26 of the ECC, which governs how interconnection and access disputes between electronic communications providers are resolved. By classifying CDNs and Content and Application Providers (CAPs) as electronic communications service providers, AGCOM could trigger a formal dispute resolution mechanism, allowing telcos to challenge CAPs and CDN providers over traffic arrangements and potentially claim compensation or impose mandatory access terms. 

Europe Must Defend the Open Internet

Now more than ever, Europe must defend the open internet, especially if it wants to attract new talent and become a region that champions innovation and democracy. Additionally, if Europe wants to attract new talent and set the tone for the next chapter of the digital economy, expanding regulatory overreach like this is simply not the way to do it.

As Europe starts thinking about how to build a strong defense ecosystem, it must support networks and connections that operate in a transparent way. The open internet is crucial for defense and national security, enabling information sharing, threat identification, and public awareness, while also offering opportunities for technological advancement and intelligence gathering. Frankly, Italy should know better!

The consultation can be found here: https://www.agcom.it/provvedimenti/delibera-55-25-cons#allegati

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