Without us 'there is no Google': EU telcos ramp up pressure on Big Tech to pay for the internet

Tensions betwixt European telecommunications firms and U.S. Big Tech companies person crested, arsenic telecom bosses equine unit connected regulators to marque integer giants fork up immoderate of the outgo of gathering the backbone of the internet.

European telcos reason that ample net firms, chiefly American, person built their businesses connected the backmost of the multi-billion dollar investments that carriers person made successful net infrastructure.

Google, Netflix, Meta, Apple, Amazon and Microsoft make nearly fractional of each net traffic today. Telcos deliberation these firms should wage "fair share" fees to relationship for their disproportionate infrastructure needs and assistance money the rollout of next-generation 5G and fibre networks.

The European Commission, the EU's enforcement arm, opened a consultation past period examining however to code the imbalance. Officials are seeking views connected whether to necessitate a nonstop publication from net giants to the telco operators.

Big Tech firms accidental this would magnitude to an "internet tax" that could undermine nett neutrality.

Top telecom bosses came retired swinging astatine the tech companies during the Mobile World Congress successful Barcelona.

They bemoaned spending billions connected laying cables and installing antennas to header with rising net request without corresponding investments from Big Tech.

"Without the telcos, without the network, determination is nary Netflix, determination is nary Google," Michael Trabbia, main exertion and innovation serviceman for France's Orange, told CNBC. "So we are perfectly vital, we are the introduction constituent to the integer world."

In a Feb. 27 presentation, the CEO of German telecom radical Deutsche Telekom, Tim Hoettges, showed assemblage members a rectangular illustration, representing the standard of marketplace capitalization among antithetic manufacture participants. U.S. giants dominated this map.

Hoettges asked attendees wherefore these companies couldn't "at slightest a small bit, lend to the efforts and the infrastructure which we are gathering present successful Europe."

Howard Watson, main exertion serviceman of BT, said helium sees merit successful a interest for the ample tech players.

"Can we get a two-sided exemplary to work, wherever the lawsuit pays the operator, but besides the contented supplier pays the operator?" Watson told CNBC past week. "I bash deliberation we should beryllium looking astatine that."

Watson drew an analogy to Google and Apple's app stores, which complaint developers a chopped of in-app income successful instrumentality to usage their services.

Efforts to instrumentality web fees person been powerfully criticized — not slightest by tech companies.

Speaking connected Feb. 28 astatine MWC, Netflix co-CEO Greg Peters labeled proposals to marque tech firms wage net work providers for web costs an net postulation "tax," which would person an "adverse effect" connected consumers.

Requiring the likes of Netflix — which already spends heavy connected contented transportation — to wage for web upgrades would marque it harder to make fashionable shows, Peters said.

Tech firms accidental that carriers already person wealth to put successful infrastructure from their customers — who wage them via call, substance and information fees — and that, by asking net companies to wage for carriage, they efficaciously privation to get paid twice.

Consumers whitethorn extremity up absorbing costs asked of integer contented platforms, and this could yet "have a antagonistic interaction connected consumers, particularly astatine a clip of terms increases," Matt Brittin, Google's caput of EMEA, said successful September.

Tech firms besides reason that they are already making ample investments successful European telco infrastructure, including subsea cables and server farms.

Technology firms interest that those who wage much for infrastructure whitethorn get amended web access.

Google's Brittin said that just stock payments "could perchance construe into measures that efficaciously discriminate betwixt antithetic types of postulation and infringe the rights of extremity users."

One proposition is to necessitate idiosyncratic bargaining deals with the Big Tech firms, akin to Australian licensing models betwixt quality publishers and net platforms.

"This has thing to bash with nett neutrality. This has thing to bash with entree to the network," said Sigve Brekke, CEO of Telenor, told CNBC connected Feb. 27. "This has to bash with the load of cost."

Carriers gripe that their networks are congested by a immense output from tech giants. One solution is to stagger contented transportation astatine antithetic times to easiness the load connected web traffic.

Digital contented providers could clip a caller blockbuster movie oregon crippled releases much efficiently, oregon compress the information delivered to easiness the unit disconnected networks.

"We could conscionable commencement with having a wide docket of what's coming when, and being capable to person a dialog arsenic to whether companies are utilizing the astir businesslike mode of carrying the traffic, and could definite non-time captious contented beryllium delivered astatine antithetic times?" Marc Allera, CEO of BT's user division, told CNBC.

"I deliberation that's a pretty, comparatively casual statement to beryllium had, actually, though a batch of the contented is global, and what mightiness beryllium engaged successful 1 state and 1 clip whitethorn oregon whitethorn not beryllium engaged successful another. But I deliberation astatine a section level is surely a truly casual treatment to have."

He suggested the nett neutrality conception needs a spot of a refresh.

The "fair share" statement is arsenic aged arsenic time. For implicit a decade, telecom operators person complained astir over-the-top messaging and media services similar WhatsApp and Skype "free riding" connected their networks.

At this year's MWC, determination was 1 notable quality — a high-ranking EU authoritative successful the room.

Thierry Breton, caput of interior markets for the European Commission, said the bloc indispensable "find a financing exemplary for the immense investments needed" successful the improvement of next-generation mobile networks and emerging technologies, similar the metaverse.

Breton said it was important not to undermine nett neutrality and that the statement should not beryllium characterized arsenic a "binary choice" betwixt net work providers and Big Tech firms.

Breton's beingness astatine MWC appeared to bespeak the bloc's sympathies toward Big Telecom, according to Paolo Pescatore, tech, media and telecom expert astatine PP Foresight.

"The situation successful Europe is it's not that wide chopped due to the fact that you person an imbalance," Pescatore said. "The imbalance is not down to Big Tech, it's not down to streamers, and it's not down to telcos. It's down mostly to the old, out-of-date regulatory environment."

A deficiency of cross-border consolidation and stagnating revenues successful the telecoms assemblage created a "perfect concoction that's unfavorable to telcos," helium said.

"A imaginable landing portion for solution is simply a model for telcos to negociate individually with the tech firms that make the heaviest traffic," Ahmad Latif Ali,  European telecommunications insights pb astatine IDC, told CNBC. "However, this is simply a highly contested situation."

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