Big Tech Gets Support From EU Regulators Against Telcos’ Network Fee Push

EU telecoms regulators’ group BEREC on Friday warned the European Commission against proposing legislation pushed by the sector to get Big Tech‘s help to pay for the rollout of 5G and broadband, saying it did not see a competition problem or a market failure.

The comments from The Body of European Regulators for Electronic Communications (BEREC) to the European Commission which is now looking into the issue underscores the high-stakes battle between Big Tech and Europe’s major telecoms operators.

“There is no evidence of a competition problem or a market failure to the detriment of end-users regarding IP-interconnection,” the group said.

Echoing Big Tech’s arguments, BEREC said it has its doubts about a mandatory network fee levied on the companies.

“It is questionable that mandatory payments from CAPs (content and application providers) to ISPs (internet service providers) would lead to member states meeting the connectivity targets,” BEREC said.

“On the contrary, it is rather likely that ISPs in already well supplied areas would benefit the most.”

It said a mandatory fee may disadvantage smaller telecoms operators with less economies of scale and bargaining power, while other telecoms companies with their own streaming or cloud services may discriminate and unfairly promote these services.

Such a fee may also lead to price hikes for consumers, disincentivise Big Tech from investments and breach EU net neutrality rules, BEREC said.

Deutsche Telekom, Orange, Telefonica and Telecom Italia have been lobbying for Big Tech to shoulder some of the network costs.

Alphabet‘s Google, Apple, Meta Platforms, Netflix, Amazon.com and Microsoft, which telcos say account for more than half of data internet traffic, have rejected the proposal.

© Thomson Reuters 2023