According to Light Reading, leading telecom operators have long called on regulators to take action against the increasing amount of data traffic brought by large streaming platforms like Netflix — putting increasing pressure on telecom operators' networks.
The big four European telecom operators have now said they've had enough and are demanding legislation at EU level that would force these platforms– namely Big Tech, OTT providers or hyperscale enterprises, to pay their fair share of the network investment.
Deutsche Telekom CEO Timotheus H ttges, outgoing French Orange CEO Stéphane Richard, Telefónica Chairman and CEO José María lvarez-Pallete and Vodafone CEO Nick Read issued a joint statement saying the current situation is unsustainable.
They cite Sandvine's January 2022 Report on the Global Internet Phenomenon, which notes that video streams, games and social media ,"generated by a handful of digital content platforms", account for more than 70% of all traffic on the web.
Chart: The global top Internet companies accounted for more than half of their online traffic during the COVID-19 pandemic. Source: Sandvine.
"The investment burden must be shared in a more balanced way," the four CEOs insisted.
"Digital platforms are profiting from hyperscale business models at a very low cost, while network operators are taking on the investments required for network connectivity. At the same time, profitability in our retail market has been declining. ”
They also warn that if Europe does not take action now, it risks falling behind the rest of the world, "which will ultimately reduce the quality of experience for all consumers." ”
Legal measures
They noted that South Korea is discussing a national law to create regulatory conditions for a fairer sharing of network costs — in part because of the popularity of the Netflix series "Squid Games."
"In the U.S., policymakers are also turning to universal services that are also funded by digital platforms," the CEOs said. ”
Although the joint statement did not explicitly mention net neutrality, CEOs complained that "network operators are unable to negotiate fair terms with these giant platforms due to their strong market position, asymmetric bargaining power and lack of a level playing field for regulation." ”
It also echoes a recent comment by Marc Allera, chief executive of BT's consumer division, who noted "a complete lack of coordination on many data-intensive events." "Every carrier's network is under pressure, and everyone's internet is becoming more unstable than before." ”
While the CEOs of Deutsche Telekom, France Orange, Telefónica and Vodafone are heartened and encouraged by the European Commission's recent commitment to ensure that all market participants make a "fair and proportionate contribution" to infrastructure costs, they hope lawmakers "introduce regulations at EU level to make this principle a reality".
The joint statement concluded: "Time is of the essence, especially given that significant investment is still required to meet the connectivity targets set by the European Commission in its Communications for the European Digital Decade. Without a fair solution, we will not be able to achieve our goals. (C114 Ace)