The EU should force major technology and video streaming companies to pay at least part of the estimated 28 billion euros that European telecom groups cost for their overuse of network infrastructure, according to a new industry report.
A small number of video, social media and technology companies – including Facebook owner Metu, Netflix and Amazon – account for more than 55 percent of total mobile and broadband traffic, according to a study commissioned by the European Telecommunications Network Operators Association and led by Axon. That costs European telecommunications companies between 15 and 28 billion euros each year, they say.
If some of these data-swallowing technology groups give 20 billion euros to telecoms companies to cover and increase network investment, it could create 840,000 new jobs by 2025 and significantly reduce energy consumption in the sector, the report said. spurred new consumption on 5G and fiber.
“We want to launch an open dialogue with policy makers, consumers and technology companies on how to address specific imbalances in internet traffic markets,” said Lise Fuhr, ETNO’s Managing Director.
Telecom companies are involved years of debate with regulators on whether large technology companies, which use a significant portion of network data, should be forced to pay for some of the costly infrastructure upgrades undertaken by mobile and broadband operators, including billions spent on 5G and full fiber deployment.
Executives pointed to a recent case in South Korea, where a court ordered Netflix to pay to increase traffic through the SK Broadband network late last year driven by the success of its series Squid game.
They hope EU lawmakers will show compassion for their cause, citing a statement issued by the European Commission as part of its declaration on digital rights that “all market players benefit from digital transformation [should] a fair and proportionate contribution to the cost of public goods, services and infrastructure ”.
The most efficient way for the commission to extract contributions from large technology companies would be for them to create a mechanism for direct payments to infrastructure projects or the telecom groups themselves, the report said.
Creating a special investment fund or imposing a tax would make the process too complex and difficult to sell to the general public, it is argued.
The report states that European telecommunications groups have invested 500 billion euros in the past decade in upgrading and improving their fixed and mobile networks, and are in a much weaker financial position than comparable companies in the technology sector. The first eight telecommunications groups have a total market capitalization of 240 billion euros, compared to more than 7 billion euros for the six largest technology groups, the statement said.
Large technology and video streaming companies claim that they also contribute to the cost of upgrading the network and that their connection agreements with telecommunications companies help attract and retain customers, creating shared value.
Netflix said: “We are partnering with European ISPs to make networks more efficient. For example, we have invested heavily in our own content delivery network called Open Connect. ”
They added that more than 700 so-called “caching” sites they have built in Europe – meaning content is stored locally and does not travel long distances – have reduced broadband traffic, improved the user experience and saved costs.
Amazon declined to comment. Meta did not respond to a comment.
Matthew Howett, an analyst at Assembly Research, said the technology groups were right when they pointed out that they had already contributed to the delivery of content. “The question is therefore whether this is enough to meet the requirements for network infrastructure providers.”
Although previous attempts to change the rules in Europe have been unsuccessful, Howett suggested that greater awareness among policymakers about the benefits of upgrading the network to the environment and the importance of connectivity during the Covid-19 pandemic could pave the way for a different outcome.