Monday, 15 August 2022

Europe’s new Connectivity Infrastructure Act could make big tech pay

by Harry Baldock, Total Telecom
Monday 27 June 22

Reports suggest that the new law may include measures to make big tech companies contribute to network infrastructure costs

Back in 2020, the European Commission launched a set of guidelines called the 2020 Connectivity Toolbox, aiming to give European Union (EU) countries the framework they needed to rollout fibre and 5G technologies rapidly and effectively.  Now, according to sources, the European Commission is preparing to codify some of these guidelines into European law as part of a revision of the 2014 Broadband Cost Reduction Directive…

Back in 2020, the European Commission launched a set of guidelines called the 2020 Connectivity Toolbox, aiming to give European Union (EU) countries the framework they needed to rollout fibre and 5G technologies rapidly and effectively. 

Now, according to sources, the European Commission is preparing to codify some of these guidelines into European law as part of a revision of the 2014 Broadband Cost Reduction Directive. The law, which is currently known as the Connectivity Infrastructure Act, will also reportedly offer a recommendation on Very High Capacity Networks and a revision of the broadband state aid guidelines.

But far more interesting is the suggestion that this law could also include a mechanism through which major tech companies, like Google, Meta, and Netflix, could be forced the help subsidise telco networks.

In recent years, European telecoms operators have been pressuring the European Commission to force these major online companies to help subsidise the their expensive network deployment costs, arguing that the so-called ‘over-the-top’ service providers make up over half of network data traffic and so should contribute financially to the networks they so rely on.

At the start of May this year, the European Telecommunications Network Operators’ Association (ETNO) published a report in which European operators argued that the tech giants should contribute €20 billion a year to network rollout and operational costs. 

While some commentators were immediately critical of such a proposal – including a group of non-governmental organisations that said such a move would contradict net neutrality principles – European Commission Margrethe Vestager nonetheless said that the Commission was seriously considering taking action to resolve “the issue of fair contribution to telecommunication networks”.

Currently, is unclear whether the upcoming Infrastructure Act will include any mechanism to force these tech giants to contribute to network rollout costs, but if it does come to pass it would represent a major shift in the dynamic for the European telecoms industry.

The Connectivity Infrastructure Act is reportedly expected to be presented this autumn.


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