Tensions between European telecoms and US tech giants have reached a fever pitch, with telecom bosses pressuring regulators to cut some of the costs of building the backbone of the internet into digital. It is designed to be borne by the giants of
European carriers claim that large US-based internet companies have built their businesses on the billions of dollars invested in internet infrastructure by carriers.
Google, netflix, meta, apple, Amazon and microsoft generation Almost half of all internet traffic today. The operator believes these companies should pay a “fair” rate to account for their disproportionate infrastructure needs and to fund the deployment of his next-generation 5G and fiber networks. I’m here.
The EU’s executive body, the European Commission, launched talks last month to consider how to address the imbalance. Officials are seeking views on whether to demand direct contributions from the internet giant to carriers.
Big tech companies say this amounts to an “internet tax” that could undermine net neutrality.
What are the telecom giants saying?
Telecom industry leaders lashed out at tech companies during the Mobile World Congress in Barcelona.
They lament the billions of dollars spent laying cables and installing antennas to keep up with the growing internet demand without corresponding investment from Big Tech.
“Without carriers and networks, there would be no Netflix or Google,” Michael Trabbia, chief technology and innovation officer at France’s Orange, told CNBC. “So we are absolutely essential. We are the gateway to the digital world.”
CEO of the German telecommunications group at a presentation on February 27 Deutsche Telekom, Tim Hoettges showed the audience an illustration of a rectangle representing the size of the market capitalization of various industry participants. US giants dominated this map.
Deutsche Telekom CEO Tim Hoettges will be the keynote speaker at Mobile World Congress.
Angel Garcia | Photo Bloomberg | Bloomberg | Getty Images
Hoettges asked attendees why these companies “cannot contribute at least a little to the efforts and infrastructure that we are building here in Europe.”
Howard Watson, BT’s chief technology officer, said he believes fees are an advantage for large tech companies.
“Can we make a two-sided model work where not only the customer pays the operator, but the content provider also pays the operator?” Watson told CNBC last week. “I think we should see it.”
Watson likened it to Google and Apple’s app stores. Google and Apple’s app stores charge a portion of in-app sales in exchange for the developer’s use of their services.
What are US tech companies saying?
Efforts to introduce network fees have been heavily criticized, especially by technology companies.
In a speech at MWC on Feb. 28, Netflix co-CEO Greg Peters said the proposal for tech companies to pass network costs on to internet service providers would be a “tax” on internet traffic and a “tax” on consumers. “It will have a negative impact,” he said.
Netflix Co-CEO Greg Peters will deliver a keynote on the future of entertainment at Mobile World Congress 2023.
Joan Cross | Null Photo | Getty Images
Asking companies like Netflix, which already spend a lot of money to distribute content, to pay for network upgrades will make it harder to develop popular shows, Peters said.
Technology companies say carriers are already receiving money from customers to invest in infrastructure, and customers are paying for calls, texts and data. They also hope to effectively double their payments by asking Internet companies to pay for their communications charges.
Consumers may end up bearing the costs of digital content platforms, which ultimately “may have a negative impact on consumers, especially at price increases,” said Google’s EMEA head. , Matt Brittin, said in September.
Technology companies also claim to have already invested heavily in Europe’s telecommunications infrastructure, including undersea cables and server farms.
Rethinking “Net Neutrality”
The “fair share” argument raises concerns that the principle of net neutrality – the principle that the internet should be free and open and should not prioritize certain services – may be undermined. . The carriers say they are not trying to erode net neutrality.
Technology companies worry that spending more on infrastructure will improve network access.
Google’s Brittin said fair share payments “can be a means of effectively discriminating against different types of traffic and violating end-user rights.”
One suggestion is to require individual negotiated contracts with big tech companies. This is similar to the Australian licensing model between news media and internet platforms.
“This has nothing to do with net neutrality. It has nothing to do with access to the network,” Telenor CEO Sigve Brekke told CNBC on Feb. 27.
Short term solution?
Carriers are complaining that their networks are congested by massive output from big tech companies. One solution is to stagger content delivery by time to reduce strain on network traffic.
Digital content providers can better time the release of new blockbuster movies and games, or compress the data being delivered to take pressure off the network.
“Start by having a clear schedule of what will come when, whether the company is using the most efficient way to carry traffic, and whether certain non-time-critical content can be delivered at another time. BT’s consumer division CEO Marc Allera told CNBC.
“Actually, I think it’s a pretty, relatively easy argument. No. Discussions at the local level are indeed very easy.”
He suggested that the concept of net neutrality needs to be revamped a bit.
Not an “either/or”
The “fair share” debate has been around for a long time. For more than a decade, carriers have complained about a plethora of messaging and media services like WhatsApp and Skype “free riding” on their networks.
There is one notable difference at this year’s MWC. That is, a high-ranking EU official was in the room.
The European Union’s Internal Market Commissioner, Thierry Breton, delivers a keynote address at the Mobile World Congress in Barcelona.
Angel Garcia | Photo Bloomberg | Bloomberg | Getty Images
The European Commission’s head of internal markets, Thierry Breton, said the block needs to “find a financing model for the huge investments needed” in developing next-generation mobile networks and emerging technologies like the Metaverse. said.
Bretton said it was important not to compromise net neutrality and that it should not be seen as an “either or not” between internet service providers and big tech companies.
According to Paolo Pescatore, technology, media and telecoms analyst at PP Foresight, Breton’s presence at MWC seemed to reflect Brock’s sympathy for Big Telecom.
“The challenge in Europe is that it’s not so clear because it’s out of balance,” Pescatore said. No, mainly because of an old and outdated regulatory environment.”
He said the lack of cross-border integration and stagnating telecom sector revenues created a “perfect mix against telecom operators”.
Ahmad Latif Ali, IDC’s European Telecommunications Insights Lead, told CNBC: “But this is a highly contested situation.”
clock: 30 years after the invention of the web, Tim Berners-Lee has some ideas on how to fix it
