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GSMA extends ‘fair contribution’ debate globally

A week after European operators renewed their call for Big Tech to be forced to contribute to the cost of networks, the GSMA has put out a related statement.

As the main trade association for global mobile network operators, it’s reasonable to expect the GSMA to take a position on a matter close to many members’ hearts. While the organisation has historically seemed more focused on Europe, its remit is global, so if it was ever going to speak up on this matter that had to be acknowledged.

Sullen silence was apparently deemed an unsustainable position, so today we got a ‘Statement on the Global Network Investment Demands Faced by Mobile Operators’. As has become customary with such things, the statement started by setting the scene by saying how important ‘digital infrastructure’ is. The clear purpose of this is to position the matter as a pollical more than a business issue.

We’re then reminded that data traffic is growing exponentially thanks to streaming video and that ‘more than half of all internet traffic today is generated by only six global internet companies.’ It turns out that MNOs need to constantly invest to keep up with the demands of this booming digital economy, and that regulation and political policy have a significant effect on those costs.

The statement eventually cuts to the chase: ‘All segments of the internet ecosystem should have the opportunity to make fair returns in a competitive marketplace,” it asserts. ‘Industry leaders, stakeholders and policymakers need to engage in dialogue where this is not the case, to ensure that regulatory asymmetry, market distortions or other factors do not limit this ability, and that the right incentives for digital infrastructure investment are in place to support the long-term growth of the ecosystem.

The framing of this matter by European operators, and now the GSMA, as a matter of ‘fairness’ is deliberately vague and political. How do you define fairness? It’s inherently subjective so the concept relies entirely on who decides. The global internet companies think the current situation is fair and operators don’t. This statement, as with those that preceded it, is an attempt to influence how lawmakers define fairness and to intervene in markets accordingly.

‘Different approaches may be appropriate in different markets to address any market imbalances; however, the ultimate goal is nevertheless the same: to deliver and sustain digital connectivity — for everyone — for decades to come,’ concludes the statement.

Again, who says there are market imbalances? Operators still make a profit, just not as much as they seems to think they deserve. The underlying question revolves around when and how it’s appropriate for lawmakers and regulators to intervene in markets. Regulatory asymmetry is one matter but imposing a new tax on select companies who happen to be produce popular video content is another.

 

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