EU Commission wants billions in expansion

Brussels The European telecom companies have tried it many times before, but they have never come so close to their goal: the EU Commission is preparing a law they have requested, which will see large sums invested in the expansion of telephone lines.

The money should come from those who send a particularly large amount of data over the Internet, i.e. above all streaming providers such as Netflix and YouTube or cloud services. EU Commissioner Thierry Breton started the consultation phase for this law today, Thursday. This is a period during which feedback on the previous proposal will still be considered.

It would be “enormously advantageous” for citizens and companies in Europe if the EU were to enact a law “ensuring that all relevant actors make their fair contribution to the development of digital infrastructure,” said Spain’s Telefónica board member Juan Montero Rodil .

In English, the telecom companies, including Deutsche Telekom, speak of a “fair share” that the big tech companies should pay. The officials of the EU Commission have now also adopted this term.

This is based on the assumption that the previous financing of the Internet infrastructure has been provided by the telecom companies, but according to Telekom it would be better for the market if the content providers took over at least part of the costs.

Pressure also comes from the EU itself

According to the telecom companies, these costs are rising sharply and will continue to rise in the future. Some of the reasons for this are more and more cloud applications, more streaming offers, the metaverse and new applications via the fast 5G mobile communications standard.

fiber optic expansion

All citizens in the EU should be supplied with gigabit fiber optic lines by 2030, and a 5G signal should be receivable in all populated regions.

(Photo: dpa)

During the pandemic, the share of internet traffic related to the top six content providers Alphabet, Netflix, Meta, Microsoft, Apple and Amazon rose to more than 50 percent, according to data from consulting firm Sandvine. According to Sandvine, this proportion has now fallen again somewhat. The idea of ​​the telecom companies and the EU Commission is not to charge all content providers, but only the most important ones.

The EU put pressure on itself to do this. According to the “Digital Decade” strategy, which was adopted in 2021, all citizens should be supplied with gigabit fiber optic lines by 2030, and a 5G signal should be receivable in all populated regions.

Interesting developments in the market and in transmission technology are being observed, said a senior EU official, who declined to be quoted by name. Therefore, not all the rules need to be changed, but take this as an opportunity to think about the future of the connectivity sector. “We ask in our consultation whether we need to change anything about who should contribute to this transformation,” she said.

The Commission emphasizes that the outcome of the consultation is open, so that there can be no changes to the financing. But the companies concerned consider this unrealistic. Breton and Commission Vice-President Margrethe Vestager had already spoken positively about the idea of ​​asking content providers to pay last year.

>> Read here: Europe’s cartel guard is fighting with new weapons Google

“We welcome the fact that the public is finally being consulted, but we fear that the Commission has already given in to the demands of the large telecommunications companies for network fees,” says Christian Borggreen, head of the CCIA Europe association, in which many of the large tech companies such as Amazon , Apple, Alphabet and Meta are represented.

Regulatory skepticism

Europeans are already paying for their Internet access and should not pay again indirectly through higher streaming and cloud costs. “The message from regulators, consumer organizations, civil society and academics couldn’t be clearer: introducing a network fee is a terrible idea,” Borggreen said.

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The money should come from streaming providers such as Netflix and Youtube or cloud services.

(Photo: imago images/MiS)

The body of European regulators for electronic communications (BEREC) actually took a critical position on the idea in October 2022. According to a report, the market works and requires no intervention.

One noticed that, said an official of the EU Commission. Now one is open for the answers to concrete questions of the consultation process from Berec as well as from other stakeholders.

The consultation will last twelve weeks. After that, the EU Commission would have to present a legislative proposal, which could then be revised or rejected by the EU Parliament and the EU member states.

>> Read here: Telekom should be allowed record increase in connection prices

The EU Commission is a little further ahead with its plans for a “Gigabit Infrastructure Act”, or “GIA” for short. This is intended to accelerate the expansion of Internet lines through simplified approval procedures. In addition, he should prescribe that new and completely renovated buildings must always be equipped with fiber optic connections.

More: Meta, Netflix or Google usage fees? Germany brakes on the subject of data tolls

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