Tech firms face growing risk of European Union telco levy

European telecoms companies say they are footing the bill for faster broadband and mobile networks

Internal Market Commissioner Thierry Breton. Photo: Bloomberg

Sarah Collins

February 16 2023 02:30 AM

Irish-based tech giants should gear up for a battle with Brussels as the EU mulls whether to charge them for a surge in internet traffic.

European Commission internal market chief Thierry Breton said he would soon be launching a public consultation on network costs, opening a new front in the ‘net neutrality’ war.

Net neutrality – the right to the same content and services, regardless of location – is enshrined in the EU’s open internet law.

But digital rights campaigners say it could be threatened if the EU allows Eir or Vodafone to charge the likes of Google or Netflix for using their networks – likening it to phone companies hiking fees for long-distance calls in the past.

European telecoms companies, on the other hand, say they are footing the bill for faster broadband and mobile networks – €500bn over the last decade, they say – while others reap the benefits.

Six tech firms –– Google’s parent Alphabet, Amazon, Apple, Meta, Microsoft and Netflix – accounted for 56pc of all data traffic worldwide, telecoms firms say.

That extra traffic costs EU telecoms companies up to €40bn per year, according to a study by Frontier Economics.

The European Telecommunications Network Operators’ Association (ETNO) says the cost of 5G and high-speed broadband infrastructure dwarfs the investments made by tech firms in things like undersea cables and data centres, and that hits their bottom line.

However, Netflix says its ‘Open Connect’ local server network – the streaming giant partners with three internet exchanges in Ireland – has saved internet providers $1.25bn (€1.17bn) in fees they would have had to pay to get content from servers abroad.

Vodafone Ireland’s director of strategy and external affairs, Liam O’Brien, said recently that tech platforms should agree “a fair and reasonable price” for the networks they use.

Tech firms are holding fire to see how far the EU goes in its publish consultation, which Mr Breton told Reuters this week could be wound up by the end of the year.

The bloc would then have to publish legislation, which could take years to agree given European Parliament elections are due next spring.

Eir and Google declined comment, while Meta did not reply to a request.