Operators again beg Europe for Big Tech cash

The CEOs of all the major European operators have signed a letter that once more calls upon the EU to get the biggest data traffic generators pay extra.

Characterised as the ‘fair contribution’ issue by operators, the argument they make is that much of the traffic they carry over their networks is generated by the big US video streaming providers. Since a disproportionate amount of their capex and opex is spent on ensuring they have sufficient network capacity carry all this data, they think it’s reasonable to ask those companies to contribute to those costs.

To date, those operators haven’t had much encouragement from the European Commission, which is where nearly all of the EU power resides, but a couple of weeks ago European Commissioner Thierry Breton announced he would start a consultation on the matter whenever he gets a window in his hectic schedule.

It took the group of major European operators, who sometimes speak collectively through the ETNO trade association, until now issue their formal response to Breton’s announcement, in the form of a statement signed by all of their CEOs. It set the scene by stating: “In an age of socio-economic and geopolitical challenges, convergent and timely collaboration between public and private actors is essential, especially on crucial digital matters…”

The statement went on to identify sustainability and the energy crisis as two of those challenges, apparently in order to suggest that the EU won’t be able to overcome them without a lot of help from the operator signatories. There was also a bit of special pleading about how much more expensive telecoms stuff has become, thus strengthening the case for the inevitable request for cash.

“A sustainable, thriving internet ecosystem is in the interest of all European citizens and it relies on the achievement of the EU goals,” continued the statement. “Timely action is a must: Europe missed out on many of the opportunities offered by the consumer internet. It must now swiftly build strength for the age of the metaverses.

“For this to happen, and to be sustainable over time, we believe that the largest traffic generators should make a fair contribution to the sizeable costs they currently impose on European networks. We must ensure that Europe does not suffer from scarcity of digital infrastructure.

“This is why we strongly welcome the statements by EVP Vestager and the consultation announced by Commissioner Thierry Breton. It will lay the ground for a solid legislative initiative that effectively addresses the matter. We support a timely calendar that allows Europe to deliver by the end of the current Commission mandate.”

That last paragraph reads like a demand for greater urgency, which is almost certain to go unheeded. The broader framing of the matter as one of existential significance borders on hysterical. Operators will continue to expand and upgrade their networks whether or not the EU extracts any exceptional tax from big tech but, yes, it might do so more quickly if it gets some extra cash.

Our sense is that there is limited sympathy outside of the European operator scene for this argument. The reason operators, especially fixed line ones, get no extra revenue from the consumption of video via their networks is that their tariffs are unmetered. That undermines the moral and legal case for what they’re asking, which means any attempt by the EU to impose this tax would be likely to create major diplomatic tensions with the US.

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