EU suggests making tech giants pay into 5G and fibre fund

‘Data-heavy’ tech companies in Europe recording high levels of internet data traffic could be required to contribute to telecom infrastructure costs under new EU plans, sources said on Monday.

Under the proposal, companies including Netflix and Google will be required “to help pay for the next generation of internet infrastructure” across the continent.

The initiative to charge companies over their bandwidth usage — data transfer measured in bits per second — is part of the “fair share” vision being pursued by the EU.

“Fair share,” also known as the sender-pays principle, is based on the argument advanced by leading European telecom carriers that online platforms fail to contribute to network expenses while benefiting from the digital economy.

A draft document suggested that tech firms might contribute to a fund to offset the costs of building 5G mobile networks and fiber infrastructure, as well as take part in the creation of a mandatory system of direct payments to telecom operators.

The European Commission, which is developing the proposal with industry players, is reportedly floating a “threshold” proposal that would help identify companies that generate large amounts of data traffic, similar to the concept of “gatekeeper” companies introduced as part of the Digital Markets Act.

According to a European Telecommunications Network Operators’ Association study, a small number of internet companies — including Google, Apple, Meta, Microsoft and Netflix — account for more than 56 percent of global data traffic.

The proposal to force tech giants to contribute to telecom costs was first brought forward in May 2022 but was met with skepticism by some members of the EC, who called for broad consultations with relevant stakeholders.

Tech companies and civil society organizations have also expressed alarm about the move, warning that it might jeopardize net neutrality, which promotes the democratization of the internet and freedom for individual users.

EC President Ursula von der Leyen said in December that the EU “intends to launch a thorough discussion on the future of Europe’s connectivity infrastructure,” adding: “The amount of data exchanged and harvested is larger than ever and will increase.”

EU lawmakers are aiming to move ahead of the curve with legislation focusing on the growth of the data-intensive metaverse and virtual worlds. ArabNews