5G, here’s how Tim, Vodafone and others cash in on Google, Apple, Meta and Amazon
The telcos have drafted a proposal to charge Big Tech for the rollout of 5G in the EU. The large network operators want to share costs with Over-The-Top companies, content providers who are the main users of the networks. Facts, numbers and insights
It is a battle between Telco operators and Big Tech on the "fair share", i.e. the fair contribution of all digital players.
In fact, the former want to divide the costs of launching 5G in the EU with the latter, which are the main users of the networks. But for content providers instead of "fair share" we should rather talk about "network commissions", since we are dealing with tariffs.
Specifically, tech groups representing more than 5% of a telecom provider's average peak internet traffic are expected to fund the rollout of 5G and broadband in Europe.
This is the gist of the proposal by the TLC sector associations Etno and GSMA sent to the European Commission, which in February launched a public consultation as part of the Connectivity Package, which ended on 19 May. GSMA and Etno represent over 160 European fixed and mobile operators including Deutsche Telekom, Orange, Telefonica, Tim and Vodafone.
So the telecom industry asks Brussels to charge infrastructure costs to Google, Apple, Meta, Amazon, Netflix and TikTok.
In the meantime, the second cycle of one-to-one meetings between the undersecretary in charge of technological innovation, Alessio Butti, the operators of the telecommunications and Over-The-Top companies to develop a shared political position precisely on the theme of "fair share".
All the details.
THE CONSULTATION STARTED BY BRUSSELS
As Corriere della Sera recently recalled, on the occasion of the launch of the public consultation, the European Commissioner for the Internal Market, Thierry Breton, declared that he did not see the question as «a binary choice between who supplies the networks today and who feeds with traffic. «For me the real challenge is to ensure that by 2030 our fellow citizens and the businesses on our streets across the EU have access to fast, reliable and high data capacity Gigabit connectivity – explained Breton – And for this we need connectivity networks, the highways of the future. This is the vision. It is not a matter of establishing whether one personal interest should prevail over another».
THE TELCO PROPOSAL ON THE DIVISION OF COSTS WITH BIG TECH
And on the eve of the conclusion of the public consultation, the proposal from the telecommunications operators has arrived.
While big telcos have been lobbying for years for major tech companies to help foot the bill for 5G and broadband rollouts, saying they create a huge chunk of the region's internet traffic, this is the first time they've tried to define a threshold for who should pay, explains Reuters .
“We propose a clear threshold to ensure that only large traffic generators, which have a substantial impact on the operators' networks, fall within the scope of application”, reads the paper prepared by GSMA and Etno. "The large traffic generators would be only those companies that represent more than 5% of the average annual traffic of an operator in peak hours measured at the level of a single network", continues the proposal.
According to European operators it is unfair to spend tens of billions of euros every year on infrastructure to keep up with growing traffic while a handful of big content providers get the audience and part of the revenue.
In the first half of 2022, Google, Netflix, Facebook, Microsoft, Apple and Amazon generated nearly half of all Internet traffic, according to a report by Canadian network intelligence and applications firm Sandvine.
As Politico summarized, for European telcos it is not sustainable as traffic increases and means they will struggle to make the necessary investments for the EU's digital goal of connecting 45 million Europeans to gigabit broadband and 5G by 2030 As GSMA and Etno recall in their paper, in 2021 the total annual investment of European telecommunications companies was 56.3 billion euros".
On the other hand, Big Tech companies, or at least Big Content companies, say that traffic growth is not spiraling out of control and that they are already contributing to the infrastructure. Forcing them to pay a fee would allow telecom operators to charge both customers and content providers for the same service.
THE POSITION OF GOAL
Meanwhile, one of the big techs immediately exposed itself on the subject. Meta, the company founded by Mark Zuckerberg that owns Facebook, Instagram and WhatsApp, has urged Brussels to reject any proposal to charge Big Tech additional network fees.
In a blog post, Markus Reinisch, Meta's vice-president for public policy for Europe , described the potential tariffs as "a private sector handout for selected telecom operators" that would disincentivise innovation and investment and distort the competition. “We urge the Commission to consider the evidence, listen to the range of organizations that have expressed concerns and abandon these misleading proposals as quickly as possible,” concluded the Meta representative.
WHAT WILL HAPPEN?
The consultation closed on 19 May. “All the options are on the table”, Breton underlined at the start of the consultation. It is not clear which of the different options the Commission might choose for any infrastructure payments.
“Europe is still a long way from full 5G and fiber coverage and a reasonable contribution from the tech giants would be a crucial help,” Maarit Palovirta, senior director of regulatory affairs at the European Association of Consumers, told Politico . telecommunications network operators (ETNO), which has sought compensation from technology firms.
On the other hand, "If content companies have to pay additional commissions to incumbent telecommunications companies on top of what we already invest in content supply, we will have less investment available for content," Giulia Iop, policy manager of the EU to broadcaster Sky, on behalf of the VOD Coalition, a coalition of streaming platforms including Netflix, Paramount and Warner Bros. Discovery.
Furthermore, opponents of "fair share" also argue that the commission also violates net neutrality, a concept enshrined in European law that ensures that all traffic should be treated equally, regardless of its source.
SECOND CYCLE OF MEETINGS WITH OPERATORS AND OTT AT THE START AT THE DIGITAL TRANSFORMATION DEPARTMENT OF THE PDC
Finally, in parallel with the European headquarters, discussions with telco operators continue in our country aimed at defining a Revision of the Strategy for Ultra-Broadband, proposed by Undersecretary Butti and unanimously approved in the last Interministerial Committee for the digital transition . Yesterday the undersecretary listened to the first representatives of the Ott companies, in order to analyze the needs and problems of the sector, gather the evaluations of all the parties, and develop a shared political position on the theme of "fair share". The meetings will continue over the next two weeks, according to the note from the Department for Digital Transformation of the Prime Minister's Office.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/5g-ecco-come-tim-vodafone-e-non-solo-battono-cassa-a-google-apple-meta-e-amazon/ on Mon, 22 May 2023 10:13:14 +0000.