As EU deadline on fair contribution nears, operators present their final arguments

Lots of various Euro cash notes covering the photo.

A joint document drafted by the GSMA and ETNO proposes that large traffic generators should be compelled to contribute to the cost of European networks.

Billed as a ‘Joint Telecom Industry Response to the EU consultation on “The future of the electronic communications sector and its infrastructure”, the document, leaked yesterday to Reuters and seen today by, marks the main submission by European operators to the EU ahead of the conclusion tomorrow of its consultation, entitled ‘The future of the electronic communications sector and its infrastructure’.

The GSMA is the global mobile operators trade body while ETNO represents the interests of just European ones. Their joint document urges the EU make public policy and regulation more friendly to telecoms investment, which includes allowing more consolidation, as well as the introduction of ‘a fair contribution based on a framework that allows balanced negotiations between telcos and large traffic generators.’

Those large traffic generators (LTG) are defined as companies that account for more than 5% of an operators yearly average busy hour traffic measured at the individual network level. This fair contribution would be calculated through obligatory negotiations between LTGs and network operators, with some kind of arbitration system established in the very likely event that those negotiations fail.

Meta, which is one of the companies likely to be designated an LTG, also anticipated the conclusion of the EU consultation with a blog characterising the fair contribution demands as operators seeking to charge twice for the same infrastructure. Meta’s own submission to the EU argues that such a forced hand-out to operators would in fact dis-incentivise innovation and investment.

Indeed, it’s hard to see how it could be guaranteed that any funds received by the operators though such a mechanism would be spent on network infrastructure. The GSMA/ETNO document asserts that a fair contribution mechanism would also result in a fairer deal for consumers and incentivise LTGs to reduce the energy consumption linked to heavy data traffic loads, with the inevitable nod to green virtue.

Those claims, too, seem hard to substantiate and it feels like operators are throwing as many justifications as they can at the wall to see if any stick. There are many strong counter-arguments, including the fact that consumers largely subscribe to operators in order to access the content produced by LTGs in the first place. Ultimately this is a call for a special tax on US companies to benefit European ones, which would set a precedent the EU may well end up regretting when the US inevitably reciprocates.


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One comment

  1. Avatar Peter B 19/05/2023 @ 2:20 pm

    Large CSP’s need to get used to reality, and not let their historic processes and systems stifle the innovation that large traffic generators have brought us. CSP’s were quick to take the profit of data upsurges, but now realise that faster evolving technology requires adaptable networks to support them, networks need to be constantly updated to provide capacity, capability and connectivity. Many CSP’s have not embraced this paradigm well. If they really want to be innovative, they would develop their billing systems to bill for relevant data services, at relevant times, for relevant consumer groups based upon data type. CSP’s have all the information to do this, but their systems, based upon old world (and its only 20 years old) limit them from being able to deploy. Using draconian techniques to monetise their lack of innovation, stifles others. The old Telco world, where change in networks and systems was painfully slow, although improved is still there. To adapt CSP’s need to take a look more at large network IT companies and network deployment and reinvent billing and admin systems. The capability exists, but the heads of CSP’s don’t seem to have the capacity to make that connection.

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