European telecoms seek 'fair' payments from Big Tech for network usage

By Al Mayadeen English
Source: Financial Times
2 Oct 2023 12:22

The appeal is made through an open letter signed by the chief executives of 20 telecom groups and is intended for the European Commission and European Parliament.

A man walks in front of the BT headquarters, in London, Thursday, May 18, 2023. (AP/Kin Cheung)

The largest telecommunications companies in Europe, including BT, Deutsche Telekom, and Telefónica, are urging the European Union (EU) to mandate that Big Tech firms pay a "fair" contribution for using telecom networks, the Financial Times reported on Tuesday.

They argue that technology companies benefiting most from telecoms infrastructure and driving data traffic growth should contribute more to the associated costs.

This appeal is made through an open letter signed by the chief executives of 20 telecom groups and is intended for the European Commission and European Parliament.

The telecom executives emphasize the need for regulatory action to secure future investments, as telecom companies are investing significantly in 5G deployment and full-fiber network upgrades.

They propose a payment mechanism targeting the largest traffic generators while stressing the importance of transparency and accountability in contributions to support Europe's digital infrastructure.

“Our costumers consume more and more data”, explains Mari-Noëlle Jégo-Laveissière, Orange. Exactly, it is telcos’ own consumers that drive demand and they already pay telcos for access. #UnfairShare #telecomsdrumbeat #NetworkFees pic.twitter.com/2YvtbatJhd
— Christian Borggreen (@Borggreen) March 21, 2023

This "fair share initiative" has gained traction in Brussels, with the European Parliament calling for a policy framework that ensures significant traffic generators fairly fund telecom networks without compromising net neutrality.

The European Commission estimates that an additional €200 billion in investment is necessary to achieve its connectivity goals, including widespread 5G coverage and gigabit coverage across the EU by 2030.

The CEOs argue that data traffic, driven primarily by a few major tech companies, is growing at an annual rate of 20% to 30%. However, they believe that the current conditions are unlikely to result in a proportionate return on investment.

Tech companies have previously opposed such proposals, contending that they already make substantial investments in internet infrastructure. Daniel Friedlaender, head of CCIA Europe, a tech industry lobbying group, argues that telecom companies are seeking additional funding from tech firms and aiming to have consumers bear network fees on top of subscription costs.

The letter also calls for an overhaul of telecom regulations, emphasizing the importance of scale to avoid market fragmentation. The European telecom industry is awaiting a decision from the European Commission on a proposed joint venture in Spain, considered a test case for further consolidation in the European telecom market.

The Spanish Presidency of the EU Council prepares for the #fairshare debate to continue; hints at a meeting of telecom ministers 23-24 Oct.
Why is that when the consultation submissions are still being processed?
What has been agreed between the Commission, telcos and Spain?
— Konstantinos Komaitis- [email protected] (@kkomaitis) June 1, 2023

The European Commission has acknowledged the issue of a "fair contribution" to network costs, stating that it's a complex matter requiring a thorough understanding of the facts and figures before any decision is made.