EU says not taking sides as Big Tech 'fair share' debate dominates mobile meet

EU industry chief Thierry Breton said he was not taking sides in a clash between Big Tech and European telecoms operators over who should fund 5G and broadband rollout

February 28, 2023 10:00 am | Updated 12:31 pm IST - BARCELONA

File photo of a person in front of the Google Cloud logo at the Mobile World Congress (MWC) 2023

File photo of a person in front of the Google Cloud logo at the Mobile World Congress (MWC) 2023 | Photo Credit: REUTERS

EU industry chief Thierry Breton on Monday said he was not taking sides in a clash between Big Tech and European telecoms operators over who should fund the rollout of 5G and broadband as the world's largest telecoms conference opened in Barcelona.

Speaking at the Mobile World Congress (MWC), Breton defended a 12-week consultation launched last week which could require Big Tech to shoulder more of the costs.

"For me the real challenge is to make sure that by 2030 our fellow citizens and business on our streets across the EU – including here in Barcelona – have access to fast, reliable and data-intense Gigabit connectivity," he said.

Representatives from tech firms including Alphabet, Meta and Netflix attending the MWC are expected to push back against the idea.

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More than 80,000 people, including tech executives, innovators, and regulators, were expected to attend the event where new product launches will also take the spotlight.

Breton spoke at an opening event where Telefonica CEO Jose Maria Alvarez-Pallete and Orange CEO Christel Heydemann also participated.

Deutsche Telekom, Orange, Telefonica and Telecom Italia have been actively lobbying for Big Tech to pay the fees.

"This is the time to collaborate between telcos and Big Tech," said Alvarez-Pallete. "Collaborating means everybody contributing with a fair share of the effort".

Orange's Heydemann deemed the EU consultation a "first step" to address what she called an "unbalanced situation", while stressing she was not calling to change Europe's net neutrality principle nor pushing for a new tax mechanism.

"We call for a new European framework which would bring a fair contribution of large online traffic generators to connectivity requirements," she said.

The Dutch government on Monday warned against imposing an internet toll on tech companies, becoming the first EU government to criticise Breton's consultation.

It said such a move may breach net neutrality rules and lead to price hikes for Europeans.

Content providers such as Netflix, which has arranged for its CEO Greg Peters to meet with Breton at the Barcelona conference, argue their firms already invest heavily in infrastructure.

They say that paying additional fees will detract from investment in products that benefit consumers.

GSMA, an association representing more than 750 mobile operators and the organising body behind MWC, has been at the forefront of the debate.

"We can really see that this is not (about) neutrality. We are not prioritising. We are not throttling," Mats Granryd, GSMA's director general told Reuters.

"So the arguments that normally is brought forward when it comes to net neutrality, we don't really see that but we will be more than happy to have that discussion."

Critics of the fair share or "SPNP" (Sending Party Network Pays) model have warned the so-called "traffic tax" could lead content-driven platforms to route their services via ISPs (internet service providers) outside of the EU.

"These new regulations would violate net neutrality provisions and fragment the internet, hurting European consumers and economies,", said David Frautschy, director at Internet Society, a U.S. non-profit advocacy group.

“The stakes are too high to let telecom operators get their way,” he added.

Regulations will be difficult to implement and enforce, said Shahid Ahmed, executive vice president at NTT and an adviser to the U.S. Federal Communications Commission.

The MWC will also see new product launches from companies including HMD Global, Honor, Huawei, RealMe and Xiaomi.

Other hot topics include the 5G adoption rate, which has disappointed some executives, and the potential uses of generative AI systems such as OpenAI's ChatGPT.

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