The European Commission wants to question big tech and telcos on their investment and cloud infrastructure plans before tabling legislation that may require big tech to shoulder network costs, a person familiar with the matter told Reuters.

According to the source, the Commission aims to ensure a fair distribution of network expenses. The six most significant content providers — including Netflix, Google and Meta — constitute over half of all internet data traffic.

Telecom companies such as Deutsche Telekom, Orange, Telefonica and Telecom Italia assert that it would be fair to require these content providers to pay additional network costs, as they are responsible for most internet traffic.

Tech giants beg to differ

Tech giants, on the other hand, argue that the proposed legislation would be an internet traffic tax undermining net neutrality, stifling innovation and creating an uneven playing field for smaller companies.

The European Commission plans to launch a public consultation next week to ask about planned investments and determine whether there is an investment gap.

They will also ask about the companies’ views on cloud infrastructure and the necessary investments for cloud transitions. The consultation is expected to last 12 weeks, after which the Commission will draft legislation for EU countries and lawmakers to deliberate.

Delicate issue

Furthermore, those consulted will be questioned about regulatory actions related to network fees in other parts of the world, such as in South Korea and Australia, and the lessons learned from these experiences.

This will reportedly aid the Commission in evaluating the potential impact of regulatory measures on the industry and consumers.

It’s worth noting that EU countries and lawmakers must ratify any legislation emerging from this consultation. The issue is multifaceted and involves a delicate balance of maintaining net neutrality, protecting innovation and promoting competition while ensuring a fair distribution of expenses.

Tip: Europe’s top countries want clarity on big tech network costs