Big telecommunications groups are increasing pressure on regulators around the world to set up a legal framework in which technology companies that send large volumes of traffic to the Internet pay to finance infrastructure upgrades.
Michael TrabbiaOrange’s head of Technology and Security, said it very clearly in an interview with CNBC: “Without the telecommunications companies, without that network, there is no Netflix, there is no Google.”
Big traffic generators don’t want to pay. Netflix, for example, said that direct compensation to telecommunications companies will be a “tax” on network traffic.
The problem is centered in Europe, where the telecommunications operators argue that the big tech companies, especially those from the United States, have built their business model based on the million-dollar investments made by the telephone companies in Internet infrastructure.
To have a dimension, one must say that Google, Netflix, Apple, Amazon and Microsoft generate nearly 50% of all global Internet traffic.
According to the operators, these firms should pay “fair share” fees to help finance the network’s progress.
In Europe the discussion has already begun. In February, the European Commission, the executive body of the European Union, began an analysis to see how to address the imbalances.
In the last Mobile World Congress in Barcelona the issue came up again.
The CEOs of the operators said they spend billions on extending cables and antennas to support the business of Netflix, Amazon and Google.
As Trabbia said regarding the importance of the operators, “we are vital, we are the entry point to the digital world”.
Telephone operators vs technology companies
Tim Hoettges, CEO of Deutsche Telekom, in his presentation in Barcelona, showed the abysmal differences between the capitalizations of the large technology holdings and those of the telephone groups. “They could not, at least a little, contribute to the effort to develop the infrastructure that we are building in Europe”said.
Howard Watson, BT’s CTO, meanwhile, wondered: “Can’t we create a model where the customer pays the operator, but also the content provider pays the operator?”
Watson compared the issue to what happens in the Google and Apple app stores, which charge developers a percentage of in-app sales in exchange for using their services.
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