EU set to challenge telcos over demands for big tech cash

European operators have been trying to get the EU to force US internet giants to pay extra for using their networks but it seems the bloc remains unconvinced.

We know this thanks to Bloomberg, which got hold of an EU document revealing it plans to ask operators to submit evidence supporting their claims for these exceptional payments. The EU declined to offer any comment on the matter but, since this is Bloomberg, the chances are it was a controlled leak, endorsed behind the scenes by someone at the European Commission.

It is, of course, totally reasonable and correct to follow due process before arbitrarily imposing a new targeted tax. The story talks of any such cash then being reinvested in network rollouts because that’s how the operators have framed it. Their presumed hope is such vows ensure the matter will be framed as a matter of geopolitical balance rather than financial opportunism.

By positioning video streaming giants such as Netflix, Amazon and YouTube as parasitic abusers of communications networks, rather than providers of valued services, operators strengthen their claims for compensation. Judging by this story, however, the EU is disinclined to simply take their word for it.

The primary mouthpiece for European operators on this matter has historically been ETNO and it seems to have had some success. But, perhaps in response to a perceived softening of the EU position, more recently some national governments have started to get involved. The political incentive for European countries to force American companies to contribute to the cost of their network rollouts is clear, but that doesn’t make it right.

One of the things the EU will have to factor into its thinking on this matter is the precedent such a move would set. Should other significant sources of network traffic also be forced to pay up? Isn’t this traffic actually the result of pull from consumers, rather than push by providers? Hasn’t the broadband industry created this problem for itself by offering unlimited tariffs?

Assuming the EU does eventually ask for this evidence, we hope it will be published as part of the broader consulting process. There’s no doubting a disproportionate amount of internet traffic originates from US video streaming services, but surely that’s already accounted for in what ISPs charge their customers. If it isn’t then maybe they should be looking in that direction for a resolution rather than asking the EU to fix their flawed business models.