Brussels opens the door for large technology companies to pay for the use of networks

The Internal Market Commissioner, Thierry Breton, during the presentation of a European standard last January.AFP

The European Commission begins to listen to the prayers of the European telephone operators.

It has opened the door for large technology companies to pay for the use of the networks by launching a public consultation that "addresses the possible need for all the actors that benefit from the digital transformation to contribute equitably to the necessary investments", in one of the documents presented this Thursday to promote connectivity in the European Union.

The large continental operators (Telefónica, Orange, Deutsche Telekom, Telecom Italia, KPN) have been demanding that this step be taken for some time, driven by the drop in profitability in recent years.

Brussels seems willing to open a new front with the big technology companies, which are mainly American (Alphabet, Meta, Amazon, Apple, Twitter, Microsoft) and some Chinese (ByteDance, parent of Tik Tok).

These companies, with which the European Executive usually has legal disputes on account of Competition resolutions and taxes, generate the good part of Internet traffic, 57% in 2021, according to Sanvine, a digital consultancy.

Companies like Telefónica opened the battle many years ago, in 2010, the former president of the large Spanish operator, César Alierta, did so: “What is evident is that Internet search engines [Google] use our network without paying anything, which it is lucky for them and unfortunate for us.

This can't go on.

We put the networks;

the systems are made by us;

After-sales service is done by us, we do everything.

This is going to change, I am convinced”.

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In response to this, the European Commissioner for the Internal Market, the Frenchman Thierry Breton, has launched a public consultation "on the [digital] connectivity sector and its infrastructure needs."

“This exploratory consultation is intended to open the debate for a more in-depth conversation with all interested parties and to gather additional data.

The exploratory consultation also addresses the possible need for all the agents that benefit from the digital transformation to contribute equitably to the necessary investments”, he announces.

Although in the same statement he clarifies: "This is a complex issue that requires a deep understanding of the underlying facts and figures."

"What we are discussing today is much more important than the fight between operators and platforms," ​​Breton pointed out in the presentation of the consultation and the regulation "to reduce the cost of deploying gigabit electronic communications networks."

A few days ago in Finland, Breton himself had warned that his department was studying some initiative in that direction: "The investments that will be necessary to achieve our ambitions will be enormous and we have to ensure that they correspond to the availability of sufficient financing. .

The burden of this funding should not fall solely on the Member States or the EU budget.

The Frenchman added an argument often used by continental telephone companies: “At a time when technology companies are using most of the bandwidth and telecom operators are seeing their return on investment fall, the question also arises Who pays for the next generation of connectivity infrastructure?

Today we are making sure that everyone, everywhere in the EU, has access to fast and secure connectivity 🇪🇺#GigabitEU https://t.co/AFqehMZjVh pic.twitter.com/TIPzcWBzIR

— Thierry Breton (@ThierryBreton) February 23, 2023

The step that Brussels takes this Thursday consists of a public and open consultation.

Now whoever wants (citizens, companies, associations, lobbies) can send their observations to the Commission.

You have until May 19 to do so.

"Depending on the result, [the Community Executive] will study the most appropriate measures for the future of the electronic communications sector."

The theory says that if the historical claim of the operators is finally addressed, the door should be opened to a legislative process, something that, as a general rule, takes a long time (months) in Brussels.

And precisely the latter, time, is what the Commission chaired by Ursula von der Leyen is running out of.

In May 2024 European elections are held and, therefore, the actual legislative period will end weeks, if not a couple of months, before.

Along with this proposal, Breton also presents the regulation "to reduce the cost of deploying gigabit electronic communications networks", which will replace the 2014 community directive to reduce the cost of broadband.

The objective is “among other things, to simplify and digitize the procedures for granting permits”.

Brussels explains that it intends to "improve the coordination of civil works between network operators to deploy the underlying physical infrastructure, such as conduits and cables, which represent up to 70% of the network deployment costs."

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