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France, Italy and Spain reportedly repeat calls for big tech to pay for EU networks

Three EU countries have made fresh calls that big tech firms such as Google, Meta and Netflix should help pay for European network infrastructure, according to Reuters.

France, Italy and Spain have apparently got together an produced a joint paper meant to put pressure on the European Commission to enforce some sort of legislation that would mean big tech firms, such as Google, Meta and Netflix, would have to stump up some of the cash required to finance the EU’s network infrastructure.

The latest calls for such action to be taken are apparently made in a document which Reuters has got its hands on. In it the three disgruntled governments said the six largest content providers accounted for 55% of internet traffic – the assertion being a small number of large Silicon Valley firms are the chief benefactors of internet infrastructure, which they are making lots of money from but are putting nothing back into – at least in terms of cables and mobile masts.

Reuters quotes the document as saying: “This generates specific costs for European telecom operators in terms of capacity, at a time they are already hugely investing in the most costly parts of the networks with 5G and Fiber-To-The-Home… we call for a legislative proposal … ensuring all market players contribute to digital infrastructure costs.”

Apparently two Italian government officials confirmed details of the joint document, and one of them said the Italian government ‘was set to give informal support in its caretaking capacity ahead of a general election in September.’

Until the mysterious document is made public it’s hard to say whether there is anything much new in here or if it is a repetition of previous calls made by various European organisations in the past. And there have been a few of them.

Late last year a letter by European operators published by the European telecoms trade association ETNO made the argument that: “Large and increasing part of network traffic is generated and monetized by big tech platforms, but it requires continuous, intensive network investment and planning by the telecommunications sector. This model – which enables EU citizens to enjoy the fruits of the digital transformation – can only be sustainable if such big tech platforms also contribute fairly to network costs.”

More recently the GSMA, the telecoms industry body and organiser of MWC, released its 2022 Internet Value Chain Report, which made the argument that ‘asymmetric regulation and restrictions’, sector-specific taxes, and spectrum costs are putting the business models of telcos under strain, whilst big tech is making all the money. It said: “Although the operators continue to invest in extraordinarily complex networks that enable the entire ecosystem, the low returns raise questions about the robustness of continued investment in capacity, coverage and speed of the networks to connect internet users with services.”

Even if you can make a compelling case that big tech should chip in for network infrastructure – and it can certainly be argued against – the process of extracting money from Google and Amazon to lay cables in Reims or erecting masts in Catalonia, which would presumably then be owned and run by local operators, wouldn’t seem to be an obvious one.

Furthermore, if the big tech firms – many of which now count operators as customers as they move various bits of their operation over the public cloud – were to be persuaded they should begin underwriting the future development of European network infrastructure – might they want something in return from the operators?

 

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