EU consultation on future telecoms cools on having big tech pay for network builds
- Reference: 1697089206
- News link: https://www.theregister.co.uk/2023/10/12/europe_comms_sector_future_consultation/
- Source link:
Such access fees were up for discussion because of their [1]introduction in South Korea . Euro-telcos have been [2]lobbying for the fees on grounds that they bear the cost of building and operating the networks that consumers use to consume content services operated by outfits like Netflix and Google.
The network operators argue that big tech makes much bigger profits than telcos, but they can't profit without the networks. Therefore they should provide the cash needed to build the networks to meet ever-increasing demand.
[3]
The [4]consultation paper [PDF] is the result of a questionnaire sent to stakeholders, rather than an indicator of the EU's final policies.
[5]
[6]
The document identifies a consensus that around €300 billion per year needs to be spent on network builds – for each of the next five years. The document reports that among respondents to the consultation, only large network operators think the fees are a good idea. Others feel they're unworkable – or likely to stymie innovation.
Daniel Friedlaender, the head of Europe's Computer & Communications Industry Association, hailed that as proving "that the vast majority of stakeholders agree: introducing network usage fees would be an unnecessary and damaging regulatory intrusion that is neither required nor justified."
[7]
He argued that network usage fees represent an attempt by carriers to have their network builds subsidized, and to grow their profits. He called on Europe to find other ways to speed network builds – starting with addressing the shortage of relevant talent.
The consultation paper suggests different actions, with the European Commission summarizing its opinion as: "Respondents consider that public funding is crucial to foster investments."
[8]South Korean telco SK Broadband and Netflix call a truce in network payment fight
[9]Cloudflare opposes Europe's plan to make Big Tech help pay for networks
[10]Telcos fear Big Tech will bleed them until they can’t afford network builds
[11]Netflix shows South Korea a rerun of 'We Won't Pay Your Telcos For Bandwidth'
The Commission's summary of the consultation also found that creating a single 5G core network across the bloc is a commonly held ambition. Doing so "would result in benefits in the range of €200–300 million over the next five years." The consultation also found broad support for "a more harmonized approach to spectrum management" as that "would unlock larger market potential, making it easier to deploy cross-border services and driving investment and innovation."
That sort of bloc-wide investment, which takes advantage of the EU's economies of scale, is seen as "key to overcome investment difficulties."
Spectrum management also emerged as a security concern, with respondents suggesting that a bloc-wide approach "could improve coverage at our national border zones and considerably strengthen the EU in cases of harmful interference from third countries at our external borders."
[12]
Another of the EU's [13]three main takeaways from the consultation was that "network virtualization, edge cloud, artificial intelligence and open networks are new technologies that will have a significant impact on the electronic communications sector."
Those technologies will usher in "software-based, highly programmable, cloud-native networks" that operate at gigabit speeds, and eventually petabits.
Another matter the paper considers is "replacement of high-risks vendors" – surely code for removing Huawei and ZTE from European networks. ®
Get our [14]Tech Resources
[1] https://www.theregister.com/2021/11/08/netflix_south_korea_network_use_fees_dispute/
[2] https://www.theregister.com/2022/09/27/etno_digital_infrastructure_sustainability/
[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=2ZSfDxQiCY3jXn@ldYbNaBwAAAMk&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[4] https://ec.europa.eu/newsroom/dae/redirection/document/99182
[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=44ZSfDxQiCY3jXn@ldYbNaBwAAAMk&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=33ZSfDxQiCY3jXn@ldYbNaBwAAAMk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[7] 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=44ZSfDxQiCY3jXn@ldYbNaBwAAAMk&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
[8] https://www.theregister.com/2023/09/18/south_korean_telco_sk_broadband/
[9] https://www.theregister.com/2023/05/09/cloudflare_opposes_europes_network_usage_charges/
[10] https://www.theregister.com/2022/05/17/gsma_2022_internet_value_chain_report/
[11] https://www.theregister.com/2021/11/08/netflix_south_korea_network_use_fees_dispute/
[12] 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=33ZSfDxQiCY3jXn@ldYbNaBwAAAMk&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[13] https://digital-strategy.ec.europa.eu/en/library/results-exploratory-consultation-future-electronic-communications-sector-and-its-infrastructure
[14] https://whitepapers.theregister.com/
Perhaps the telco customers need to pay for that as part of their broadband charges, rather than OTT services being taxed to pay for it?
There is a convention of charging buisnesses who load infrastructure (eg road taxes for freight, or grid fees to electricity suppliers*) but that makes the infrastrucutre levies less visible and prone to misuse or inefficiencies, and still ends up being paid by consumers. It's also an inherently public sector model. I can understand why the telcos want a levy - because it becomes free money, they don't appear to be charging it to users, yet they'll be able to add the assets to their balance sheet.
In many ways it is the 'tragedy of the commons' as consumers are unaware of data usage generally, often only when mobile deals cap them, so there is no incentive to use less.
You could argue that for contended services then static+dynamic charges, i.e. paying by the MB above some cap, would be fairer, but then consumers have little understanding of the concept of data usage and for a given service they don't have much control beyond using it or not.
I guess this is the argument for the OTT services covering the costs because they do have control over how bloated web pages are, how good the video compression is, etc. Now the consumer always pays in the end, same as for 'government money' so the more complicated argument is what leads to the least overall cost while delivering a reliable service and not being gamed by the bigger players.
If you want to consider internet access as a utility, it has to be billed as a utility. What water or electricity company charges a flat monthly fee for unlimited usage?
If whatever a network charges to their consumers really isn't enough to cover maintenance and infrastructure development, plus a bit of profit on top, they're either spending too inefficiently or charging too little (or both). In practice since network providers aren't falling like flies, I would assume that they are all chugging along quite nicely. And surely there can be a middle ground between capping to ridiculously low data caps and allowing real unlimited use. Take the median use, double it and set that as what's included in the monthly fee rather than 'unlimited'. And charge a small fee for per GB use over that, or have a more expensive tier for *truly* unlimited data.
Saying that consumers don't understand how much data they are using is bollocks - they don't know that exactly because they are not being charged for it. Consumers know (broadly speaking) how much electricity their appliances consume exactly because they get charged for it. And if there are some appliances or applications that are consuming vast amounts of data or 'leaking' data, you'll be sure that consumers will avoid those services or pressure providers to cut back on the data consumption.
It is the "somebody else's problem" really:
I don't want to pay road tax, but why are these pot holes not being filled?
My internet is really slow, but I don't want to pay more than £10/month! Why can't others stop using Netflix?