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Europe’s biggest telecoms companies are calling on the EU to force big tech companies to pay a “fair” price for using their networks, the latest stage in the industry’s payments battle with the likes of Netflix and Google.
The chief executives of 20 groups, including BT, Deutsche Telekom and Telefónica, who signed an open letter seen by the Financial Times, said they would “benefit” from telecoms infrastructure The tech companies that are “the biggest” and drive traffic growth should contribute more to costs. It will be sent to the European Commission and members of the European Parliament.
“Future investment is under significant pressure and regulatory action is needed to secure investments,” they warned. “Fair and proportional contributions by the largest traffic generators to network infrastructure costs should form the basis of a new approach.”
They added that regulators needed to take action to help secure future investment, with telecoms groups having to spend billions to support the rollout of 5G and upgrades to full-fibre networks.
Signatories include Deutsche Telekom’s Timotheus Höttges, Orange’s Christel Heydemann, Telefonica’s José María Álvarez-Pallete and Telecom Italia’s Pietro Labriola. Outgoing BT CEO Philip Jansen, his successor Allison Kirkby (currently CEO of Telia) and Vodafone CEO Margarita De Margherita Della Valle also expressed her support.
They suggested that the payment mechanism might impose requirements only on the “largest traffic generators”, with a focus on “accountability and transparency of contributions…”. . . to allow operators to invest directly in Europe’s digital infrastructure”.
The so-called fair share initiative has found support in Brussels, with the European Parliament calling in June[ing] Establish a policy framework that allows large traffic generators to make their fair contribution to adequately funding telecoms networks without compromising net neutrality.”
The commission said €200 billion of additional investment may be needed to achieve the goal of 5G connectivity in all densely populated areas and gigabit coverage across the EU by 2030. The committee began consultations in February, but an expected release of results in June has been delayed.
According to the letter’s signatories, data traffic is growing at an average of 20% to 30% annually, driven primarily by a “few” large tech companies. The telecoms group expects this growth to continue but says it is unlikely to deliver a commensurate return on investment under current conditions.
Signatories of the letter claim that big tech companies “pay next to nothing for the transfer of data across our networks” while some cloud providers charge customers “up to 80 times more to transfer data onward from the cloud” “.
Tech groups have previously opposed fair share proposals, arguing they already have investments in internet infrastructure, including undersea cables and data centers, as well as content and services.
Daniel Friedlaender, head of CCIA Europe, which lobbies on behalf of the technology industry, believes that the telecoms group “benefits from the exciting content and services developed by creative and technology companies”.
“Now they are trying to trick Europe into giving them extra cash. Telcos want their networks to be fully subsidized by the same companies that help them grow and prosper,” he said. “Ultimately, these telecom giants want European consumers to pay for network again on top of subscription fees.”
The executives’ letter also called for an overhaul of telecoms regulation, with the executives asking policymakers to embrace “the need for scale to avoid market fragmentation.”
The industry is awaiting a Commission decision on Orange and MasMovil’s decision to form a joint venture in Spain, which is seen as a test case for the regulator’s tolerance for further consolidation across Europe.
A spokesman for the commission said its latest consultation dealt with the issue of “equitable contribution” to network costs. “This is a complex issue and any decision should be made with an understanding of basic facts and data.”
