Telecoms demand again that Big Tech pay for Internet infrastructure and the government now supports them

For many years, one of the biggest demands of telecom companies has been The tech giant pays ‘its share of the pie’ when it comes to infrastructure, That is to say: Operators like Telefónica, Vodafone and Orange require multinational companies such as heroine, Netflix hey Google Which finances the deployment and maintenance of fixed and mobile networks being used in a high percentage for their services.

This debate is not new, but the fact is that the Spanish government has participated in it. Most recently, the First Vice President and Minister of Economic Affairs, Nadia Calvino, participated in a forum organized by major telecommunications companies in Europe. There He put himself on the edge of a ‘telecommunications’ position And said that “equal terms” must be guaranteed and Big Tech must “pay or even contribute its fair share.”

Calvino assured that since government This “more realistic” approach is “strongly” supported, because “takes into account new realities”,

Calvino’s statements were prompted a day earlier by a letter issued on 26 September, in which 16 CEOs of major European operators assured that Investing €50 billion per year to start and maintain telecommunications networks in Europe, In particular, he mentioned spending on building and maintaining 5G networks and broadband of fiber.

The Directors also condemned that this situation takes place in a context that has become very complex due to both the current energy crisis and the energy crisis. Epidemic Or the supply chain problems inherited from recent years. And on this he put an example: Fiber optic cable prices doubled in the first half of the year,

“In this context, the issue of ensuring a sustainable ecosystem for internet and connectivity is more urgent than ever,” the companies said in their letter.

More than half of the world’s Internet traffic is through six Silicon Valley companies

Google, Facebooknetflix, Appleamazon u Microsoft According to the European Association of Telecommunications Network Operators (ETNO), they account for more than half of the world’s Internet traffic. The ratio jumps to 80% when you include gaming giants like Call of Duty maker Activision Blizzard.

,A large and growing portion of network traffic is generated and monetized by large tech platformsBut this requires continued and intensive investment and planning of networks by the telecom sector,” said the same executive directors, who signed the letter this September in another statement seen by Reuters last year. “This model, which allows EU citizens to enjoy the fruits of digital transformation, can only be sustainable if these large technology platforms make a reasonable contribution to network costs,” he said.

a) yes, Telecom companies “considering themselves necessary investments to meet traffic demand”, financing infrastructure from income from end customers”, say sources in the sector. Operated by a small number of over the top (OTT) providers, with little or no contribution. for the development of national telecommunications networks, and which today represent more than 55% of all network traffic”, they emphasize.

and they conclude that “While the growth of large OTTs is exponential, in favor of telcos, the growth has not been the same in recent times., Therefore, the solution to this problem seems necessary and is in line with the recent commitment The European Commission To develop an adequate framework so that all actors benefiting from digital transformation (…) participate fairly and proportionately and contribute to the cost of public goods, services and infrastructure.

A European consultancy and a millionaire investment

Telecom companies urged The European Union In his final letter to his participation in the fight: “Timely action is imperative. Europe has missed out on many of the opportunities the Internet offers to consumers. Now for the age of the metaverse to be strong quickly,

You Looks like Europe is now at least ready to listen Telecom operators request: In early September, the European commissioner for industry, Thierry Breton, announced that he would launch a consultation next year on whether the tech giant should pay. He stressed that the regulation of ‘GAFA’ – Google, Apple, Facebook, Amazon – which use bandwidth provided by operators, for example, needs to be reviewed.

A recent Bank of America report warned that, although copper cable has so far been able to compete with fiber optics, the cost of harnessing the latter is low and, therefore, its use should be promoted. So that, European telecom operators will have to invest 45,000 million euros to replace their traditional copper cable networks with fiber optics,

Industry sources say that, as per the ETNO report, network operators Has invested more than 500,000 million euros in the last ten years in the development of its fixed and mobile telecommunications networks in europa,

Old claim of big telecom companies

Operators complain that there is an “imbalance” in the market Because “there are large technology companies that provide services on the Internet with a huge network traffic consumption and who do not bear the above costs in reasonable proportion”, says Javier Prenafetta, a lawyer specializing in technology. “They believe that Big Tech should contribute to some degree to the cost of maintaining the network because they are its main beneficiaries,” continues the expert.

“There has been an interesting study by the consulting firm Exxon Partners from May this year which has started the debate again, and talks about economic impact, employment etc.” ,This study proposes several measures to solve the, being enforced by the law of negotiation of direct agreements between Internet operators of a certain amount and control positions with telecommunications operators, so that the former pays a proportionate contribution to maintain these network costs. All this prior analysis and monitoring by the regulatory authorities of the region. This will be done at the European level, as is the case with digital markets legislation, which establishes specific requirements for companies that exceed certain thresholds or volumes, even if they are outside the EU”, explains Prenafetta. .

And he continues: “The other option proposed in the report would be to set up a compensation fund. Then distribute or create a new tax that more or less leads to that. But the study says it would be more complicated and generate rejection.

In other words, “there is no longer a legal framework that must be adopted if the operators’ request is deemed appropriate.”

What is Big Tech

clearly, Big technology companies aren’t in the business of following operators’ wishes, since 20bits We have contacted many of them, but there is no official statement or position on this dispute as of now.

However, some of them tell us about a note published by the Association of Computer and Communication Industry (CCIA) which directly states that “EU Telecom’s demand for network traffic payments is fundamentally flawed,

They assure that the operators’ own customers “already pay high subscription fees” and that the ‘telcos’ request is based on the “erroneous assumption that investment losses are due to services that are better quality networks and higher increase the demand for speed.

They say that “an investigation by Analysis Mason found that technology companies invested hundreds of billions of euros in Internet infrastructure in the period 2014-2018 alone.”

,Operators are already being paid by their customers, Now it appears telcos are looking to double dip in an effort to get online content and service providers to pay for Internet traffic. Internet Despite Europe’s commitment to remain net-neutral,” the CCIA insists.

And they compare with the energy field: “That would be the equivalent of energy companies trying to charge equipment manufacturers For the energy usage of the washing machine, while consumers are already being charged for the actual amount of energy used to do the laundry. ,

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