The EU is contemplating mandating significant tech companies and other stakeholders to contribute to the funding of 5G deployment. Additionally, there are discussions about easing telecom merger regulations.
European telecommunications companies, including Orange and Vodafone, have long urged the European Union to make tech and streaming titans pay for the massive amounts of bandwidth they consume. The concept is controversial and sparked heated debates last year. On one side, telecom companies argue that they invest substantial resources in building and maintaining infrastructure to meet the increasing demand for data transmission, and it's only fair that digital giants share the burden of these costs. They argue that this would create a more equitable distribution of expenses related to the digital ecosystem.
Conversely, tech groups argue against such measures, contending that telecom companies already generate revenue through customer subscriptions and should not seek additional compensation from tech companies. They raise concerns about the potential negative impact on innovation and consumer choice if these costs were passed on to digital platforms and streaming services, potentially leading to increased subscription fees or reduced service quality.
Furthermore, digital rights advocates express apprehensions that implementing such policies could result in a two-tiered internet system, where companies able to afford additional fees gain preferential treatment over smaller players. They emphasize the importance of preserving net neutrality and ensuring equal access to online services for all users, regardless of their financial resources.
Notable Considerations
Big tech hoped the issue would die last year, but a document from the European Commission suggests that some officials in the bloc still believe it can be revived. "The Commission may consider broadening the scope and objectives of the current regulatory framework to ensure a level playing field and equivalent rights and obligations for all actors and end-users of digital networks," it said.
The document also revealed that the EU is considering whether telecom mergers should be approved to ensure that companies can pay for the 5G rollout. It cited the ‘fragmentation’ observed within the EU telecoms market, which "could impact the ability of operators to reach the scale needed to invest in the networks of the future, particularly in light of cross-border services." This could potentially differ from the EU's previous stance on telecom mergers. In 2016, Brussels blocked Telefónica’s blockbuster sale of British telecom giant, O2, to Hong Kong Group, CK Hutchison.
The European Commission is scheduled to present its paper on February 21, after which stakeholders will be asked to provide feedback on the suggestions. All eyes will be on the commission as it announces its decision on the merger of French telecom giant, Orange, and Spain's MASMOVIL.
