According to industry and regulatory insiders, European telecommunications providers are poised to win their decade-long battle to make big tech pay for network expenses due to receptive EU regulators and the EU’s moves to rein in US tech giants.
A coalition of major European operators including Deutsche Telekom, Orange, Telefonica and Telecom Italia wants big tech to partly shoulder the expenses of network operators.
The top six content providers account for just over 50 percent of data internet traffic. According to the coalition, a contribution to the costs of network maintenance and management would be fair. Google, Netflix, Meta, Amazon and other giants oppose the proposal.
From South Korea to the United States, the campaign to persuade big tech to bear network expenses has intensified. Some see it as an internet usage tax, while others see it as an attempt to divert funds from modern companies to sustain the old guard.
Four individuals involved with the negotiations told Reuters that the European Union will have a new chance to set a worldwide norm on network pricing. Brussels presented various regulations to curb the power of big tech in recent months.
Big tech is not pleased
Big tech CEOs are bracing themselves for a fight. A source from a prominent IT firm told Reuters that the executives could not see any indication of a breakdown in the telecom business model, at least not in a way that would justify requesting a subsidy from other industries. “It’s not economics; it’s extortion”, the source noted.
According to Barclays, EU legislation for cost recovery might result in a €3 billion yearly bonanza for the telecoms industry. In what telecom executives describe as the strongest indication that the industry is prevailing over regulators, EU industry director Thierry Breton has stated that he will solicit comments from all parties before writing legislation.