EU Weighs Proposal to Charge Data-Heavy Streamers for Telecom Upgrades

(Bloomberg) -- The European Union is weighing a proposal to make technology companies that use the most bandwidth, like Netflix Inc. and Alphabet Inc., to help pay for the next generation of internet infrastructure, according to a draft document seen by Bloomberg.

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The suggestions are part of a “fair-share” vision from the EU’s executive arm that could require large tech businesses, which provide streaming videos and other data-heavy services, to help pay for the traffic they generate. The draft document, which is part of a consultation with the industry, suggested firms might contribute to a fund to offset the cost of building 5G mobile networks and fiber infrastructure, as well as the creation of a mandatory system of direct payments from tech giants to telecom operators.

The commission also asked companies whether there should be a threshold that would qualify a company to be a “large traffic generator,” the document showed. That could be similar to the European governing body’s rules designating some tech companies “gatekeepers” and “very large online platforms” in its recent competition and online content rules.

A concrete proposal is still a ways off, although it’s already generated controversy. The EU’s electronic communications regulator found in October that there is “no evidence” that platforms like Netflix or YouTube should pay telecom companies to invest in internet infrastructure and said such a move could cause “significant harm to the internet ecosystem.” The consultation — which will remain open for two to three months — is the first concrete step toward a plan.

A European Commission spokesman declined to comment.

Read More: Europe Considers Making Big Tech Pay for Building the Internet

Data usage is increasing on networks as users stream videos and the commission draft said that the move toward “metaverses and virtual worlds, the rapid move towards cloud, the use of innovative technologies online” are making it more evident that more needs to be done to protect investment in network infrastructure.

While telecom companies have lobbied for years that tech companies should contribute to the expensive process of setting up digital infrastructure, many tech companies and lawmakers have expressed concern that this could hurt laws protecting “net neutrality” and ultimately degrade equal access to the internet.

The biggest European phone and broadband companies in line to benefit from such a plan would include Vodafone Group Plc, Orange SA, Telefonica SA and Deutsche Telekom AG.

--With assistance from Thomas Seal.

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