European telecom bosses are asking tech firms to share the cost of internet networks

The bosses of Europe’s biggest telecoms operators, including BT, Vodafone and Deutsche Telekom, have urged tech companies like Netflix and Amazon to foot some of the rising 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 on whether tech companies like Google, Facebook, Netflix and Microsoft should be made to share the rising costs of the massive amounts of global internet traffic they generate to carry in their telecommunications networks.

According to ETNO, a lobby group for European telecom operators, more than half of the world’s internet traffic travels through six Silicon Valley companies – Google, Facebook, Netflix, Apple, Amazon and Microsoft. That share jumps up to 80% when gaming giants like Call of Duty maker Activision Blizzard are added.

Much of the growth in data usage is being driven by streaming shows like Netflix hit Bridgerton and Amazon’s The Lord of the Rings: The Rings of Power, based on the works of JRR Tolkien.

“We believe that the biggest traffic generators should make their fair contribution to the significant costs they are currently imposing on European networks,” the telecom bosses said in a joint statement. “A fair contribution would send a clear financial signal to streamers regarding the data growth associated with their use of scarce network resources.”

The statement says European telecoms spend €50bn (£44.5bn) annually on building and maintaining full-fiber broadband and 5G networks.

The energy crisis and rising material costs – fiber optic cables have doubled in price this year – add to the financial burden.

“In this context, the issue of ensuring a sustainable ecosystem for internet and connectivity is more urgent than ever,” the companies said. “Timely action is a must. Europe has missed many of the opportunities that the internet offers to consumers. It must now quickly build strength for the age of metaverse.”

Streaming and internet companies say they pay for their content through huge investments in systems that drastically reduce costs for telecom companies.

These include vast networks of data servers that allow content to be delivered close to telecom operators’ networks, reducing data distance and costs to consumers, with Silicon Valley companies footing the bill for “transmission fees.” .

On Monday, Matt Brittin, Google’s president of EMEA business and operations, said the company spent more than €23 billion in investments last year, much of which went into infrastructure.

“The introduction of a ‘sender pays’ principle is not a new idea and would turn many principles of the open Internet on their head,” he said. “These arguments are similar to those we heard 10 or more years ago, and we haven’t seen any new data to change the situation.”

Google’s investment includes six major data centers in Europe, 20 submarine cables worldwide, five of which are in Europe, and caches for local storage of digital content in 20 locations in Europe.

The telcos argue rules that prevent them from passing some of the cost on to the biggest drivers of internet traffic — net neutrality rules, which dictate that all internet traffic be treated equally — would still be upheld.

“We respect and fully support the need to uphold the EU open internet principles,” they said. “Consumers must continue to be able to use all lawful content and applications available on the internet.”

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