Meta says network fee not the fix for European telecom firms’ financial problems

Meta said Big Tech paying network costs would not solve telecom companies’ financial problems and also ignores tech companies’ investments

March 24, 2023 09:55 am | Updated 09:55 am IST - BRUSSELS

File photo of the Meta logo

File photo of the Meta logo | Photo Credit: REUTERS

Meta Platforms on Thursday voiced its strongest criticism to date of a push by EU telecoms operators to get Big Tech to foot additional network costs, saying this would not solve their financial problems and also ignores tech companies' hefty investments.

Deutsche Telekom, Orange, Telefonica , Telecom Italia and other operators have lobbied for two decades for U.S. tech giants to contribute to 5G and broadband roll-out.

The operators say that given they account for more than half of data internet traffic, Alphabet's Google, Apple, Meta, Netflix, Amazon and Microsoft should contribute to the billions of euros in infrastructure costs.

"We recognise the financial challenges that European telecom operators now face after decades of strong performance," Kevin Salvadori, Meta's vice president for network and Bruno Cendon Martin, its director and head of reality labs wireless, wrote in a blog post.

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"However, proposals by some European telecom operators to impose network fees on Content Application Providers (CAPs) such as Meta are not the solution," they said.

"Network fee proposals are built on a false premise because they do not recognise the value that CAPs create for the digital ecosystem, nor the investments we make in the infrastructure that underpins it."

Telecoms lobbying group ETNO rejected Meta's claims and pointed to the massive outlay required in coming years.

"Official figures show that 174 billion euros is still required to meet Europe's network investment needs," a spokesperson said.

"Big tech should contribute to filling this gap, as their business heavily relies on the traffic carried by European networks. The average metaverse user is expected to consume up to 40 times more data than today."

Salvadori and Martin cited the tens of billions of euros Meta invests in its apps and platforms such as Facebook, Instagram and Quest which in turn creates the demand that allows telecom operators to charge people for internet access.

Meta pointed to the over $880 billion in digital infrastructure around the globe, including about $120 billion a year from 2018 to 2021, which tech companies have collectively invested, saving telecom operators around $6 billion per year.

It dismissed telecoms providers' arguments that the expansion of the metaverse, shared virtual worlds accessible via the internet, would strain infrastructure capacity.

"But this is nonsense. The development of the metaverse will not require telecom operators to grow capital expenditures for greater network investment," Salvadori and Martin said.

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