Proposals to pay for broadband networks by imposing new fees on big tech companies “are based on a false premise,” meta executives wrote in a blog entry Today.
“Proposals for network tariffs fail to recognize that our investments in content drive the business model of telecom operators,” wrote Meta executives Kevin Salvadori and Bruno Cendon Martin. Meta’s comments came a few weeks later Netflix co-CEO Greg Peters opposed the proposal checked by European supervisory authorities.
Meta executives said that telecom operators and content application providers (CAPs) are “symbiotic companies that fill distinct but complementary roles in the digital ecosystem. Meta invests tens of billions of euros each year in our apps and platforms — like Facebook, Instagram, and Quest — to facilitate content hosting. Billions of people go online every day to access this content, creating the demand that allows telecom operators to charge people for Internet access. Our investments in content literally fuel the revenue and business model of telecom operators. “
ISPs in the EU argue that big tech companies should pay a “fair share” of network deployment costs. In the US, Republican Brendan Carr of the Federal Communications Commission Expectations that “Big Tech has enjoyed a free ride on our Internet infrastructure while eliminating the billions of dollars in costs required to maintain and build that network.”
Big tech companies don’t get access to the internet for free, however. Anyone who distributes content over the Internet pays their own providers, builds their own network infrastructure, or a combination of both.
For extremely large companies like Netflix and Meta, investments include building their own content delivery networks. “Over the past decade, CAPs have overall invested over $880 billion in global digital infrastructure, including approximately $120 billion per year from 2018 to 2021,” Meta’s blog post read today. “These infrastructure contributions from tech companies save telecom providers about $6 billion a year.”
Telefónica wants “two-sided market”
The European Commission last month started taking public input on the proposal to make online platforms pay for broadband network upgrades and expansions from telecom companies. The exploratory consultation is expected to end on May 19th.
Last week, Telefónica argued in a blog post that telecoms should be a “two-way market” with network operators charging internet users and content providers.
“Telecoms just want to create new revenue streams; why do they need the policy maker to do this when other companies or markets do not need such interventions to evolve into a two- or multi-sided market?” Telefónica Corporate Regulation Manager Fernando Herrera González wrote.
Telefónica’s blog post lamented the existence of telecom-specific regulation, which means ISPs need new rules to receive payments from over-the-top companies (OTT) that send content to internet users.
“As in other industries, the number of sides of the telecom market at any point in time should depend on the specific business model under which operators think they can be sustainable,” the Post said. “On the contrary, what is exceptional is the existence of firms (in this case, the OTTs) able to refuse to negotiate the terms of service they enjoy, to the point of refusing to pay for them.”
Meta: No evidence of investment gap
Meta’s blog post states that telecom operators seem to have enough money to build their networks. “We and others see no credible evidence of an investment gap, either in fixed capacity or mobile coverage,” the post said.
Over 60 percent of Europeans have fiber optic internet access at home, and deployments “are well on their way to achieving that EU Commission Aiming for full coverage of homes with a gigabit network by 2030,” Meta wrote.
“The priority for European consumers is to ensure that the fixed networks, which carry the vast majority of data, have the technical capabilities to benefit from tomorrow’s internet – and the good news is that the existing investment roadmap of the industry “Already on track to enable home connection speeds 10x faster than today,” Meta wrote other internet services for decades to come.”
Meta also said that 5G wireless coverage in Europe “has grown dramatically, with almost three quarters of the population in the EU27 countries now have access to 5G.” While Meta hopes its plan for augmented reality glasses works, it said 5G should be able to handle the traffic generated by the devices.
“We expect speeds for AR applications to be no more than the low tens of megabits per second,” which would not require “a major change in the physical architecture” of cellular networks, Meta said.