Fair share debate boils over between Deutsche Telekom and Meta

In respective blog posts, DT accused Meta of "abusing its overwhelming bargaining power to discredit legitimate concerns of the European telecommunications industry." However, Meta claims DT has put the open Internet at risk and undermined net neutrality by "using its market power to put its subscribers in Germany behind a de facto paywall."

This war of words stems from the breakdown of their long-running relationship during the pandemic when, according to a lawsuit filed by the German incumbent, Meta started withholding payments for its direct connection to DT's network, and pushed for a settlement-free arrangement instead.

The principle of settlement-free was conceived at a time when the market for online services – like social networking, for example – was far more fragmented and competitive, and the volume of data exchanged between a telco network and an individual online service provider's network was far more balanced. It made sense at the time, because it meant fledgling content application providers (CAPs) could compete on level terms with their bigger rivals.

Things are quite different now though. Today, a handful of deep-pocketed Internet giants, Meta being one of them, send a vast quantity of downstream data onto telco networks, far more than telcos send upstream. Operators, particularly those in Europe, have for years been calling for CAPs to pay telcos to carry their traffic.

That was the arrangement that DT had with Meta, until the latter stopped paying. In May, the Cologne regional court sided with DT, and ordered Meta to pay a "double-digit million" euro sum by way of compensation.

The two have been locked in negotiations since then, but it now appears that they have been unable to find a way forward. Presumably because Meta is keen to keep everything gratis, while DT would prefer it if Meta coughed up some cash.

Unwilling to budge, Meta has opted to send traffic to DT via an unnamed third-party transit provider instead, and DT has expanded its transit capacity with said provider to try and accommodate as much Meta traffic as possible, hopefully avoiding any disruption to end users.

Meta said it was disappointed with the breakdown in negotiations with DT, and pointed out that it has settlement-free agreements with thousands of operators around the world, including Germany.

"These relationships are the accepted global standard and operate settlement-free to either side because they benefit everyone: Content providers, like Meta, invest in products and services people want to use and telecom providers, like Deutsche Telekom, make money by charging for Internet access," Meta said.

It also pointed out that in 2022 alone, Meta spent €27 billion on network infrastructure, bringing its content and apps closer to end users and ensuring fast, responsive availability of its services – all of which eases the cost burden for telcos.

DT is unmoved though.

"This is not just about a difference of opinion between two companies, but about the question of whether the power of the strongest prevails on the Internet or whether there is a fair balance between all participants," it said.