European 5G infrastructure – should tech giants like Apple pay?

Update: The consultation has now begun, and will last for 12 weeks – see end of piece.

Under a proposal currently being discussed, tech giants could be asked to help pay for European 5G infrastructure, with Apple potentially on the list of companies receiving a bill.

The European Union is planning to consult on the idea of ​​asking companies which generate a lot of Internet bandwidth to contribute to the cost of upgrading the telecoms equipment used to deliver it…

A decade-old idea revived

There’s nothing new about the idea of ​​suggesting that companies that generate a lot of Internet bandwidth should be asked to contribute to the capital costs of installing and upgrading the necessary infrastructure. The European Telecommunications Network Operators’ Association (ETNO) first proposed this back in 2012.

Today there is a huge disproportion among revenues and a clear shift of value towards players (Over the Top players – OTT) who are not contributing to network investment. Traffic and revenue flows need to be realigned in order to ensure the economic viability of infrastructure investment and the sustainability of the entire ecosystem.

European Union commissioner Thierry Breton revived it last year, citing a risk that 5G infrastructure in Europe could fall behind the US and Asia unless we looked again at “who should pay what.”

Proposal on paying for European 5G infrastructure

That idea has now solidified into a draft proposal, which Bloomberg have seen.

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.

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.

While Apple is not named in the report, Apple TV+ bandwidth was considered large enough to be included in a requirement to reduce streaming quality during the pandemic. This was intended to preserve enough bandwidth to cope with increased demand – for both entertainment, and all the videoconferencing calls being generated by people working from home.

European officials have instructed streaming services to reduce the amount of bandwidth their services use, in order to reduce strain on internet networks […]

Apple appears to be serving video streams with resolutions as low as 670 pixels tall. In addition to lower resolution, the streams appear heavily compressed with visibly blocky artifacts.

Both Apple TV+ and Netflix restored normal bandwidth usage in May 2020.

Bloomberg does note that the EU appeared to have rejected the idea back in October, but that it now appears to want to find out what the telecoms industry thinks, with a consultation expected to last 2-3 months.

Update: Consultation now launched

Reuters reports that the consultation has now begun, and will end on May 19.

The European Commission on Thursday launched a consultation on the future of Europe’s telecoms sector, starting a process that could lead to requiring Google, Apple, Meta, and Netflix to pay some network costs.

Tech companies are understandably unhappy about the idea, calling it an “internet tax.”

Photo: Scott Elkins/Unsplash

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Naveen Kumar

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