News: 1673529314

  ARM Give a man a fire and he's warm for a day, but set fire to him and he's warm for the rest of his life (Terry Pratchett, Jingo)

EU plan to make big tech pay 'fair share' of telco fees reportedly weeks away

(2023/01/12)


The European Commission could issue draft legislation calling for cloud providers and hyperscalers to offset traffic generated by their services by directly funding telco infrastructure as early as March.

However, the draft won't come before the European Commission completes a public consultation and questionnaire that will query cloud and telco providers on their investment plans in the region, Reuters [1]reported , citing a "person familiar with the matter."

These tech giants are responsible for generating a considerable amount of traffic. In May, the GMSA [2]estimated that cloud providers and hyperscalers like Amazon, Google, Microsoft, Apple, Meta, and Netflix account for 57 percent of global traffic.

[3]

And while European telcos, including Deutsche Telekom, Orange, and Telefonica, have [4]voiced support for EU regulation, US tech companies have pushed back, characterizing the efforts as an internet service tax, according to Reuters.

[5]

[6]

The question of whether companies like Amazon or Google should have to pay extra is being more heavily debated. In September, the European Telecommunications Network Operators' Association, or ENTNO for short, issued a [7]statement calling for big tech companies to pay their fair share of internet infrastructure.

"We believe that the largest traffic generators should make a fair contribution to the sizable costs they currently impose on European networks," the statement read.

[8]No more holidays for US telcos, FCC is cracking down

[9]EU set to sign internet satellite deal, as UK frees up spectrum

[10]Telcos fear Big Tech will bleed them until they can't afford network builds

[11]European carriers again call for Big Tech to fund network builds

However, US tech companies aren't the only ones that have expressed concerns over proposed legislation. In a letter

[12]PDF

to the European commission earlier this month, ISP association Euro-IX expressed concerns that regulation resulting from the so-called "fair share" debate would inadvertently lead to higher costs and poorer quality of service for ISP customers in Europe.

"Citizen's experience in basic business operations, sharing data, accessing cloud services, and developing research projects will be negatively impacted," the association warned. "This can be seen by mandatory termination charges implemented in South Korea, which has resulted in reduced quality and security of the services provided to end users."

[13]

A root of these concerns appears to be that, if forced to pay for traffic used by customers, tech companies would downgrade their services — for example, cutting the bitrate of streaming video — harming customer experiences in the process.

The group also expressed concerns that such a move could upend established internet exchange models, resulting in higher costs for interconnection agreements.

While Euro-IX didn't take a stance for or against "fair share" regulation, the association urged policymakers to proceed with caution to avoid introducing systemic weakness into critical infrastructure.

[14]

While draft legislation could be ready in as little as 12 weeks, Reuters notes that EU member nations and lawmakers will need to weigh in on the measures, before it's enacted. ®

Get our [15]Tech Resources



[1] https://www.reuters.com/technology/eu-wants-details-big-tech-telcos-investment-plans-source-2023-01-10/

[2] https://www.theregister.com/2022/05/17/gsma_2022_internet_value_chain_report/

[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Y8A8s59Ly@JRR5Ih4atF6AAAAIU&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0

[4] https://www.theregister.com/2022/09/27/etno_digital_infrastructure_sustainability/

[5] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y8A8s59Ly@JRR5Ih4atF6AAAAIU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[6] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y8A8s59Ly@JRR5Ih4atF6AAAAIU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0

[7] https://www.theregister.com/2022/09/27/etno_digital_infrastructure_sustainability/

[8] https://www.theregister.com/2023/01/08/in_brief_security/

[9] https://www.theregister.com/2022/11/10/eu_set_to_sign_internet_sat_deal/

[10] https://www.theregister.com/2022/05/17/gsma_2022_internet_value_chain_report/

[11] https://www.theregister.com/2022/09/27/etno_digital_infrastructure_sustainability/

[12] https://www.euro-ix.net/media/filer_public/91/7a/917a92e8-77b0-4d29-bdfc-dd68bce9a523/spnp_impact_on_ixps_-_final.pdf

[13] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Y8A8s59Ly@JRR5Ih4atF6AAAAIU&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0

[14] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_onprem/networks&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Y8A8s59Ly@JRR5Ih4atF6AAAAIU&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0

[15] https://whitepapers.theregister.com/



SundogUK

I am not sure I understand the problem they're trying to fix with this. It's not big tech that's using up the bandwith, it's the users and I assume they are already being charged what the market will bear and the telco's are making a profit. What gives?

Everyone should pay to get to the Internet backbone

alain williams

This includes big tech and people at home.

So if you spend all day on Youtube or Netflix then expect to have to pay for the large number of GB that you will use -- just as Youtube/Netflix will have to pay for those GB to get to the backbone/Internet-exchanges.

The problem is that ISPs like to advertise all-you-can-eat packages at some low cost. They then find that they lose when a couch potato burns through many many GB.

The solution is simple: £X gets you Y GB, if you want more then you have to pay more. The trouble is that the ISP marketing departments do not like this reality and go crying "unfair" to government.

Re: Everyone should pay to get to the Internet backbone

NewModelArmy

To counter that slightly, my bill is increasing by £3 per month for the telco to install more equipment to cope with the streaming load.

I don't stream in general, although i have streamed 1 missed program, and one series of 10 episodes due to the BBC not making it available on terrestrial TV. Else, everything is freeview.

As such, i am subsidising those people who do stream. So a tax on those providing the services to offset the cost would (hopefully) be beneficial to me. Though i doubt there will be a £3 drop in costs for my broadband.

Re: Everyone should pay to get to the Internet backbone

Charlie Clark

Tariffs based on bandwidth rather than volume are standard because they better reflect the costs incurred for the services provided: the max volume for specified bandwidth for a period of time is also easily calculated.

But the main reason that the internet remains open is that interconnect agreements generally forbid preferential charging: a packet is a packet, whether it's carrying video or e-mail. The interconnects are also where any adjustments should be made. This can and should be done without any kind of political interference. It would be a big mistake to threaten this just to make it easier for the telcos to provide similar services: vertical integration never favours the customer.

Phil O'Sophical

What gives?

EU politicians up for re-election, trying to show that they're tough on profit, and tough on the causes of profit.

Hmmm...

heyrick

I pay €70/month for my internet (plus mobile, plus VoIP landline).

Multiply by the number of subscribers to the national telco, I can't help but think that maybe it's a question of how the money is being spent, rather than a lack of it.

What worries me is not just the potential Balkanisation of the internet (those who pay vs those who don't), but also the fact that what this will really translate into is price hikes for everybody.

Rahbut

If the big companies account for 50%+ of traffic, then it would seem the telcos are selling a service to access the big companies... meaning they should probably foot the bill for access, or not provide access (and lose customers to competitors who do). If they sell an "upto mbps" service, they should expect people to want to use it - irrespective of the origin of the data - even if the business model is to sell an over subscribed/contended service for as much as they can get away with... the inter-connects are the price of providing a service. There are no options to buy "cheap internet, but without tiktok, youtube, facebook and netflix" - even though there are some that might actually like the option.

It sounds like a rerun of the net neutrality stuff in the US that got talked about a few years back, where the ISPs didn't want to just provide dumb pipes, but were also trying to "add value" with their own TV services (or whatever).

Whatever happens, customers will pay more to cover these new costs because either their netflix sub will go up or their telco sub will... because neither of those two groups of companies ever try to price gouge at every available opportunity...

Crypto Monad

"In May, the GMSA estimated that cloud providers and hyperscalers like Amazon, Google, Microsoft, Apple, Meta, and Netflix account for 57 percent of global traffic."

Without observing that on a broadband access network, subscribers account for 100% of that traffic (and already pay for its transit).

Nuts

Martin Summers

So if I purchase something physical online or over the phone, should that mean I never have to pay postage again because the company I bought it from are one of the big senders of parcels and clog up the network and they have to pay to send it to me?

Are these people nuts or what?

Hang on a minute...

Mishak

Service providers pay a fee for their internet connection.

Customers pay a fee to their ISP for internet access.

So, they are really saying Provider -> CDN is ok, but they want the provider to pay for CDN -> customer (which the customer has already paid for)?

Telco Entitlement

Panicnow

As the founder of PIPEX the first commercial ISP in Europe, which became by far the largest international ISP. This claim by Telcos is all about them trying to reestablish their cosy monopolies. As usual they are corrupting the political system to enable them to extort money. Rather than do their job of investing and innovating in the services their customers demand. ( Which is far harder work for management, than lobbying politicians.)

While I have no sympathy for large tech, when they also abuse their monopoly, at least they innovate and invest. Telcos, always drag their feet on investment and seek to slow innovation.

I hope(but do not expect) the EU politicians to do the right thing and put kerbs on the abuse of ALL monopolies in the interest of its public. Rather than support one monopoly over another.

You will reach the highest possible point in your business or profession.