The bosses of Europe’s biggest telecoms operators including BT, Vodafone and Deutsche Telekom have called for tech firms such as Netflix an Amazon to pay for some of the soaring costs of data fueled by the global streaming and internet boom.
The call from the 16 chief executives comes as the European Commission prepares to launch a consultation into whether technology companies such as Google, Facebook, Netflix and Microsoft should be made to pay some of the soaring costs for the huge amount of global internet traffic they carry on their telecoms networks.
More than half of global internet traffic takes place through six Silicon Valley companies – Google, Facebook, Netflix, Apple, Amazon and Microsoft – according to ETNO, a lobby group for European telecoms operators. The proportion rises to as much as 80% when gaming giants such as Call of Duty maker Activision Blizzard are included.
Much of the growth in data usage is driven by the streaming of shows such as the Netflix hit Bridgerton and Amazon’s The Lord of the Rings: The Rings of Power, which is based on the works of JRR Tolkien.
“We believe that the largest traffic generators should make a fair contribution to the sizeable costs they currently impose on European networks,” the telecoms chiefs said in a joint statement. “A fair contribution would send a clear financial signal for streamers in relation to the data growth associated with their use of scarce network resources.”
The statement says that European telecoms companies spend €50bn (£44.5bn) annually on building and maintaining full-fibre broadband and 5G networks.
The energy crisis and soaring costs of materials – fiber optic cable has doubled in price this year – is adding to the financial burden.
“In this context, the issue of ensuring a sustainable ecosystem for the internet and connectivity is more urgent than ever,” the companies said. “Timely action is a must. Europe missed out on many of the opportunities offered by the consumer internet. It must now swiftly build strength for the age of the metaverses.”
Streaming and internet companies say they do pay for their content through huge investment in systems that dramatically reduce the costs to telecoms companies.
These include vast networks of data servers that allow content to be delivered close to telecoms operators’ networks, shortening the distance data then travels and cost to consumers, with the Silicon Valley companies footing the bill for “transit charges”.
On Monday, Matt Brittin, the president of EMEA business and operations at Google, said last year the company spent more than €23bn in capital expenditure, much of which was on infrastructure.
“Introducing a ‘sender pays’ principle is not a new idea, and would upend many of the principles of the open internet,” he said. “These arguments are similar to those we heard 10 or more years ago and we have not seen new data that changes the situation.”
Google’s investment includes six large data centers in Europe, 20 subsea cables globally, including five in Europe, and caches to store digital content locally in 20 locations in Europe.
The telecoms companies argue that rules that stop them from passing on some of the costs to the biggest drivers of internet traffic – net neutrality rules that stipulate that all internet traffic is treated equally – would continue to be upheld.
“We are respectful and fully supportive of the need to uphold the EU open internet principles,” they said. “Consumers must continue to enjoy all lawful content and applications available on the internet.”
George is Digismak’s reported cum editor with 13 years of experience in Journalism