Hamburg An old dream of the European telecom industry is currently being negotiated in Brussels. For more than ten years, Deutsche Telekom, Vodafone, Telefónica and co. have been looking for a way to divert part of the immense profits of the US tech companies into their coffers. Now the industry is apparently as close to its goal as never before.
Specifically, it is about a kind of data toll that large Internet platforms are supposed to pay. The funds generated in this way are then intended to supplement – directly or indirectly – the infrastructure investments of the telecom giants.
The thesis behind it: the tech industry is responsible for a growing share of Internet traffic, but does not contribute accordingly to the expensive expansion of mobile and fixed networks. And this despite the fact that she also earns princely thanks to this infrastructure.
The levy is supposed to affect only a handful of companies that cause a lot of traffic – in the lobbyist’s speech: “fair share”. For example, Netflix, Google or the Facebook group Meta, which occupy a large part of the bandwidth of European DSL, cable or mobile customers. The telecom companies are talking about 36 to 40 billion euros, which the data traffic of the Internet platforms costs them annually.
Signs are now gathering in Brussels that the data toll could become a reality as early as 2023. In industry circles, it is said that the EU Commission wants to present a corresponding concept later this year. Further meetings with industry representatives will take place before the summer break.
The debate is already in the “hot phase”
“The Commission was strikingly specific in its statements,” Alessandro Gropelli, deputy director of the telecom lobbying association ETNO, told Handelsblatt. The debate is already in its “hot phase”.
In May, two EU commissioners also made positive statements on the subject of tech tolls: Competition Commissioner Margrethe Vestager spoke of a “fair contribution” for telecommunications networks that companies with high data volumes would not yet make. And Internal Market Commissioner Thierry Breton called for a “fair remuneration” so that investments in new infrastructure would also be worthwhile for the telecom companies in the future. The Commission would like to present a corresponding “initiative” later this year. The wording of the statements was strikingly similar to the communications of the telecommunications industry.
This closeness is new. So far, the Commission has firmly rejected similar moves. “Adapt or die,” the then digital Commissioner Neelie Kroes let the industry know in 2014. Popular services such as Youtube or WhatsApp would provide the telecom companies with their customers in the first place, it was said. At the same time, the industry was regulated much more strictly in Europe than, for example, in the USA. Local consumers can therefore look forward to lower mobile phone or Internet fees.
In view of the immense costs for the expansion of fiber-optic lines or the new, hyper-fast 5G mobile communications standard, the mood in Brussels has now apparently turned. After all, the Union has promised all its citizens access to high-speed Internet and cellular connections by 2030. A noble plan, the punctual realization of which remains uncertain.
In the meantime, the specific form or amount of the levy is still open. “We don’t have a billing model yet,” Markus Haas, CEO of Telefónica Deutschland, admitted recently at an event in Berlin. Tech industry and network activists also hope to be able to stop the toll after all. The lobby machinery is running hot accordingly.
Showdown of the lobby machines
The telecom providers had already had an open letter from their CEO published in the “Financial Times” in February – of course, accompanied by suitable data material. Tenor: The Commission does not see the forest for the trees. According to this, Europe risks falling behind other regions of the world with its “unbalanced regulation”, since the necessary investments in infrastructure cannot be managed in this way.
According to a study funded by the industry, the big six US tech companies alone are responsible for more than half of global data traffic (see chart). However, in view of unfair conditions, the European telecom companies could not benefit from this accordingly. For example, the Internet giants’ sales have increased by 500 percent since 2015, while their own sales have decreased by seven percent in the same period.
However, this connection is not only questioned by the Internet companies. They do not accept the equation according to which increasing traffic corresponds to higher sales such as costs. Google, for example, would earn considerably more with compact ads in its Internet search than with spots between Youtube clips. The videos generate much more data traffic.
Netflix also emphasizes the good relationship with the telecom industry, with which it has bundled offers on the market in many countries. The streaming giant operates a network with more than 700 servers in Europe. They have their own content database mirrored on them. “So when Netflix members use their internet connection to watch movies or series, the content only has to travel short distances,” Thomas Volmer, Head of Global Content Delivery Policy, told Handelsblatt. This would reduce data turnover and costs. Google and Meta, the parent company of Facebook, have also increased their investments in deep-sea cables that work like global data pipelines, according to industry associations.
However, the more general question of proper participation in the financing of public infrastructure is largely left unanswered by the tech giants.
Joker Net Neutrality
The sharpest sword of Silicon Valley is the so-called net neutrality, which it believes is in danger due to the EU initiative. If the distribution of certain services were charged with fees or, depending on the model, certain streaming providers were possibly excluded altogether in the event of missing payments, this would amount to a form of censorship. A similar argument was made by 34 civil society organisations such as the Chaos Computer Club, which addressed the Commission in an open letter at the beginning of June.
The EU had committed itself to the observance of net neutrality only at the beginning of the year in its “Principles for the Digital Decade”. For example, a spokeswoman emphasizes that they should not be injured in any case. However, it is considered that a participation of the tech industry in the network expansion costs is in principle compatible with this. However, it is currently too early “to inform about concrete plans and deadlines”.
