Why telecom operators are demanding money from Netflix, Google and Facebook

The European Commission plans to make GAFANs pay for their use of bandwidth, provided in part by telecom operators. A consultation will take place with all stakeholders in the first half of 2023.

Will the end of the year be animated by a battle between the American giants and European telecoms? Last May, the European commissioner in charge of the internal market Thierry Breton was intractable towards the GAFAN (Google, Apple, Facebook, Amazon, Netflix): they will have to finance the telecom networks. “A handful of players alone occupy more than 50% of the world’s bandwidth. Now is the time to reorganize the fair remuneration of the networks”, had he advanced on Twitter. He has since qualified his remarks.

This subject “must not be restricted” to the sole debate on the taxation of GAFAN. “We have to wonder if our network regulation, thought out at the time of the opening up of copper networks to competition, is still appropriate, as the metaverse and its massive data flows loom” he then explained. during a press conference.

A consultation in the first half of 2023

A consultation concerning a contribution from the major platforms to the financing of telecom networks will take place from the first quarter of 2023, will last five to six months and will be followed by proposals from the European Commission. A wider debate will take place on the regulation of telecoms, reports Reuters.

“The battle promises to be fierce,” warns MEP Stéphanie Yon-Courtin (Renew), interviewed by Tech & Co. “This issue is ten years old. We need transparency on the money that is invested by the GAFAN and telecoms in the network: who will have to pay what? she wonders.

Since the spring, the European Commission has been studying the possibility of drafting a legislative proposal that would oblige these five giants to contribute to the Internet infrastructure. Telecoms seek to negotiate with content providers, in a system similar to that of neighboring rights.

The French, Spanish and Italian governments have expressed their position in favor of such a proposal.

Respect net neutrality

In a letter signed by around fifty MEPs from all sides, including the French Valérie Hayer (Renew), François-Xavier Bellamy (LR) and Stéphanie Yon-Courtin, sent to Executive Vice-President Margrethe Vestager, and Thierry Breton, parliamentarians are calling for a “proportionate” contribution from GAFAN to the financing of telecoms infrastructure.

“The idea of ​​having a fair contribution from GAFAN to the platforms”, insists Stéphanie Yon-Courtin, without ever mentioning taxes. Taking up the arguments of Thierry Breton, she insists on the fact that “this contribution must reflect our current use of the Internet”. The objective of this contribution will also be to support the deployment of 5G by 2030 and to put an end to white areas.

The other issue in this battle will be to respect net neutrality. This concept, as old as the Web itself, implies that operators offer equal access (and at the same connection speed) to all online services. This rule thus prevents an Internet service provider from deliberately slowing down the access of its subscribers to certain services deemed to be data-intensive.

Infrastructure belonging to GAFAN

When watching a video on Youtube or a series on Netflix, the stream goes through the operator’s band, but also through servers installed locally by GAFAN. To have their own infrastructure in addition to the existing network, the platforms have been installing local servers for several years: Netflix thus has 40 server centers throughout France, compared to a hundred for YouTube.

This infrastructure allows Netflix, for example, to save all of its content on each of the 40 locations, in order to speed up the flow to its subscribers, but also not to transmit the data across the whole of France at each viewing.

Etno, the European telecoms lobby, published a study last May and taken up by The world: “the operators have invested 500 billion euros in ten years in European networks. The bandwidth of the digital giants would cost them 36 to 40 billion per year”.

According to Stéphanie Yon-Courtin, the competition between telecoms and GAFAN is asymmetrical: “the operators are not able to negotiate alone”. The Commission therefore plans to limit the contribution to the largest companies according to the percentage of their use of the network. The MEP recognizes that there is already a contribution from the platforms through their servers located in the territory, but the whole thing “is to assess whether it is fair enough”.

The GAFAN defend themselves

For Christian Borggreeen, Vice President of CCIA Europe, the lobby of large digital companies, the logic followed by the European Commission would lead to a double bill for consumers: one by the operators, as well as a second, through increase in Netflix subscriptions due to these new financial obligations.

“Let’s be clear, telecoms essentially want users in Europe to pay twice. Directly for internet access, as they already do today. And indirectly, by rendering online services, such as Netflix subscription or the use of the cloud, more expensive”, he declared last week, during the WIK Conference bringing together all the major institutional digital players.

Forcing the GAFANs to enter into commercial agreements with the operators also raises a question: will this not push them to ask for a guaranteed or accelerated speed in exchange and relegate the other content producers to a second-class Internet?

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