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Telecom and EU representatives at MWC 2023 have stepped up pressure on US big tech companies to help future-proof costs.
Who pays the bills for the telecommunications network? In a further attempt to answer the question, EU telecoms companies at Mobile World Congress 2023 pushed regulators to pay US tech giants – including Google – for the cost of securing the world’s busiest networks.
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What do these EU telecommunications providers want?
Orange, Deutsche Telekom and BT are among the EU firms that have spoken at MWC 2023, demanding changes from US companies with the largest traffic, CNBC reports.
In particular, telecoms like Google, Netflix, Metta, Apple, Amazon and Microsoft — which together generate about half of today’s Internet traffic — want to maintain the networks that deliver their content. These “fair share” payments are meant to keep infrastructure running smoothly and deploy next-generation networks. Some fees support physical infrastructure, such as new cables and antennas, as well as increased network speeds.
Several telcos have suggested network fees as a solution; This will basically be a “tax” to help with network maintenance. However, opponents say US tech companies will be less likely to have a negative impact on consumers. BT also suggested to CNBC a “two-sided model” where the content provider pays the network operator the same way consumers do.
For telecommunications providers, such a deal could help them keep up with growing demand for faster services that carry more data. They may now have a better chance of getting their vote when it comes to seeking a “fair share” from hyperscalers.
The European Commission weighs in
The European Commission opened a consultation on the issue in February, sparking much of the discussion at MWC 2023.
A big change this year was when Thierry Breton, head of the European Commission’s internal market, weighed in on the side of telecoms. EU telecoms “must find a financial model for the massive investments required” to support proposed technologies like Metaverse and next-generation mobile networks, CNBC reported.
Breton also cautioned against framing it as a debate between telecoms and content giants. Net neutrality is also a concern, as more financial ties between the two and information can block the road to a free and open internet, such as giving or preferential treatment to certain types of content.
See: Dell partners with Red Hat as part of MWC 2023 billboard (TechRepublic)
What will these changes mean for Big Tech companies?
Content provider leaders, such as Netflix co-CEO Greg Peters, argue that the telecom “tax” will hurt already depleted budgets and make it harder to produce quality programming. Netflix subscriber numbers increase in Q4 2022 despite slowing revenue growth. Some tech companies are already paying for undersea cables and server farms and argue that they shouldn’t have to pay for shipping.
According to Breton, another consideration is net neutrality. Could deals between telecoms and Big Tech mean that people who pay more to support infrastructure get better network access, undermining the philosophy of internet neutrality that gives equal priority to all services?
A possible deal would be for network providers and content creators to cooperate to stream content during a disruption. For example, streaming services can notify EU Telecom of their schedules with blockbuster content. This can reduce overall network traffic load but requires more coordination between content creators and network operators across time zones.
“The challenge in Europe is not that clear because you have to balance,” Paolo Pescatore, technology, media and telecom analyst at PP Foresight, told CNBC. “The imbalance is not with Big Tech, it’s not with the streamers, and it’s not with the telcos. Mostly to the old, outdated control environment.
Read next: 5G Open RAN Gains Speed: Next Steps and Challenges (TechRepublic)
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