5G and fiber buildout isn’t viable without making the biggest users pay for part of it, say EU telcos
Deutsche Telekom, Orange, Telefonica and 13 other Communication Service Providers (CSPs) in Europe are clamoring for hyperscalers and other big tech companies to pick up part of the bill for continued infrastructure buildout plans across the European Union (EU), reports Reuters.
Service providers are estimated to spend about €50 billion (US$48.3 billion) annually on communications infrastructure across the EU. European CSPs are looking to offset the rising cost of planning and construction of these networks by making the largest users of the infrastructure help to pay for its construction and maintenance. Hitting EU connectivity goals with fiber and 5G will require accelerated capital buildout investment, the carriers said.
“Costs of planning and construction works are increasing,” reads the letter. “Prices for fibre optic cables, for example, have almost doubled in the first semester 2022. Similarly, the hikes in energy prices and in the prices of other inputs are also hitting the connectivity sector.”
“For this to happen, and to be sustainable over time, we believe that the largest traffic generators should make a fair contribution to the sizable costs they currently impose on European networks.”
Executives from DT, Orange and Telefonica were joined in the letter by signatures from the heads of Swisscom, A1 Telekom Austrian, United Group, Bouyges Telecom, Proximus Group, Telenor Group, Fastweb, KPN, Altice Portugal, BT, Telia, TIM and Vodafone.
The European Commission (EC) is scheduled to spend the first half of 2023 in consultation over the issue. European Commissioner Thierry Breton confirmed the news earlier this month. Breton said at the time that the EC needed to review how regulations would be adapted for the bandwidth consumed by what the ‘GAFAs’ (Google, Apple, Facebook, Amazon). So far, the EC is trying to take a measured approach to the issue, willing to consider arguments on both sides whether the companies that make the most money from digital infrastructure ought to also pay for its construction and maintenance.
This isn’t the first time the subject has come up — making big tech pay for infrastructure is a repeated issue that’s been simmering in the EU for quite some time. The European Telecom Network Operators Association (ETNO), a telecom industry lobbying group, offered a challenge in May to the European Commission to implement some sort of fair-contribution policy to defray infrastructure costs.
ETNO claimed that Facebook, Microsoft, Google, Amazon, and Netflix accounted for 56% of all global data traffic in 2021. ETNO predicted a £72 billion (US$73.6 billion) economic boost out of a £20 billion (US$20.4 billion) annual investment. The letter recently delivered to the European Commission cites the same 56% figure.
“In the European Digital Rights and Principles the European Commission proposed a principle that all market actors benefitting from the digital transformation should make fair and proportionate contribution to the cost of infrastructure. It is part of our reflection in the context of investment,” ETNO wrote.
Last year, European telco bosses put out the call for big tech to pay their way with new infrastructure.
“A large and increasing part of network traffic is generated and monetized by big tech platforms, but it requires continuous, intensive network investment and planning by the telecommunications sector,” read the statement.
“This model — which enables EU citizens to enjoy the fruits of the digital transformation — can only be sustainable if such big tech platforms also contribute fairly to network costs,” said the CEOs.
