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October 11, 2023
Thierry Breton appears to be kicking the can down the road when it comes to his aspiration to make the technology giants share the cost of rolling out 5G networks in the EU.
The European Commission’s internal market commissioner has been batting around the idea of making the big Internet players contribute to the cost of the networks they use for the past year or so, and it seemed that all the talk might turn to action before the end of this year. But this week Reuters reported that Breton will set out a strategy on the matter next year, which means it will be up to the next Commission, not this one, to take any action.
The newswire attributed the information to the usual unnamed sources, and added the caveat that no final decision on the move has been made. That is to say, a legislative proposal on the funding of European broadband networks could still feature on the work programme the European Commission is due to announce on 18 October.
The current Commission, headed by president Ursula von der Leyen, will hold office until next year’s European elections, due to be held in June. If Reuters’ sources are correct – and that seems fairly likely – any decision on legislation in this area will be up to the new Commission.
Whoever ends up making that call, it will be a tough one. Breton is not the first to harbour the notion of charging the Internet companies for using networks; the fair share debate has been raging on and off for decades. However, he is the most recent to champion the cause.
There were reports at the start of this year that the commissioner was mulling the idea of asking – or perhaps more accurately, telling – the tech giants to pay into a central pot that would serve as a fund to offset the cost of building 5G mobile networks and fibre infrastructure, as well as requiring them to pay telecoms operators for network usage. Breton did not specifically refer to such a fund when he later confirmed plans to launch a public consultation into the future of connectivity and infrastructure in Europe, but he did highlight the thorny question of who should pay for next-generation infrastructure at a time when telco are witnessing declining returns on investment.
Naturally, that question and the broader consultation have proved pretty divisive. In a nutshell, the operators are in favour of having help to pay for their networks – funny that – while big tech is not so keen.
In JuneReuters reported that the EU’s telecoms ministers have for the most part sided with the technology companies, or at least called for further investigation into the idea. There are various industry bodies on both sides of the debate.
Essentially, the telcos feel it is only fair the Internet companies should bear some of the cost of deploying networks, given that they generate such a large amount of traffic. But the Internet companies – the likes of Amazon, Apple, Google, Meta, Netflix and so-on, not that their identities were in any doubt – claim that the telcos essentially want to charge customers twice, as well as pointing out that their own costs are not insubstantial, when spend on data centres, content delivery and, in some cases, cable systems are factored in.
It’s an age-old debate and one that isn’t going anywhere any time soon, particularly given the sums of money involved. The Commission has identified a €200 billion funding gap when it comes to hitting its connectivity targets for 2030; that’s to reach full gigabit coverage and 5G networks in all populated areas. In a report published a fortnight ago it urged EU member states to explore financing options to complement private investment in areas that are not commercially viable…but pulling a collective €200 billion worth of financing options out of the bag seems like a big ask.
The European Commission needs to find the money from somewhere, or backtrack on those much-hyped 2030 targets. But Breton no longer seems to be in a rush to shake the piggybanks of big tech.
Mary has been following developments in the telecoms industry for more than 20 years. She is currently a freelance journalist, having stepped down as editor of Total Telecom in late 2017; her career history also includes three years at CIT Publications (now part of Telegeography) and a stint at Reuters. Mary's key area of focus is on the business of telecoms, looking at operator strategy and financial performance, as well as regulatory developments, spectrum allocation and the like. She holds a Bachelor's degree in modern languages and an MA in Italian language and literature.
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