The European Commission wants to do a study who needs to pay for the 5G networks in Europe. Is that for the telco’s or should de big tech players pay for their “fair share”. Big question will be, what is “fair”?
This week, Meta and other US tech platforms howled in protest over the European Commission’s decision to launch a study to decide who will pay for Europe’s broadband network.
The roll-out of the EU’s 5G network will require billions of euros of investments, and the big telcos are balking at bearing all the costs themselves. Telecoms providers like Deutsche Telekom, Orange, Telefonica, Telecom Italia have spent the past several years lobbying the Commission to force big technology companies to contribute to the costs of building the high speed 5G networks.
The service providers have a simple argument: major tech platforms such as Meta, Google, Apple, Netflix, Amazon and Microsoft account for more than half of the data traffic. The telcos say these Big Tech companies must “pay their fair share” of the costs to provide the infrastructure that powers their businesses.
Big tech companies have their own counterargument. They claim that forcing them to pay for the roll-out will essentially be an “Internet tax” that hits only them. The costs of such a tax would undermine the EU’s own network neutrality rules requiring that all network users must be treated equally.
European Commission says stakeholders need to “fairly contribute”
The EC’s Internal Market Commissioner Thierry Breton on Thursday announced the launch of a 12-week consultation “to gather views on the changing technological and market landscape and how it may affect the sector for electronic communications”.
“The exploratory consultation is part of an open dialogue with all stakeholders about the potential need for all players benefitting from the digital transformation to fairly contribute to the required investments”, the Commission said.
Breton said a contributions mechanism could be one of the solutions. Other possible solutions could be a continental or digital levy or fund.
Telefonica CEO Jose Maria Alvarez-Pallete rebuffed Big Tech’s “Internet tax” argument, saying that a company like Meta is as much a customer as other users. “This would not be like a tax, we would charge them like they were customers, why do some customers pay and others not. It’s correcting an anomaly,” he told Reuters.