Brussels’ next lobbying dogfight: Big Tech vs. Big Telecoms

Two of Brussels’ most powerful lobbying machines — Big Telecoms and Big Tech — are preparing to square off.

On one side stand the behemoths of the telecoms trade associations: the European Telecommunications Network Operators’ Association (ETNO) and the GSMA, who among them represent a range of providers including Deutsche Telekom, Orange, Telefónica and Vodafone.  

They argue that platform services — particularly high-bandwidth ones such as Google’s YouTube, Netflix and Amazon Prime — have for too long benefited from the expansion of fixed and mobile telecom networks in Europe, without bearing the cost of their development.

On the opposing side are the platforms themselves, represented on the public-policy circuit by the Washington-based Computer and Communications Industry Association (CCIA), a net-neutrality stalwart that counts Google, Apple, Facebook-owner Meta and Amazon as members.

Of course, every fight needs a referee. Enter the European Commission, which will determine what “fair contribution” platforms should make to finance telecom networks. The EU’s Internal Market Commissioner Thierry Breton told POLITICO that the considerable investments required in connectivity infrastructures require support from platforms.   

“Telcos are investing, public authorities are investing,” Breton said. “It is only fair that digital players who benefit from the digital transformation also contribute to the costs of deploying the infrastructures that make it possible.” 

The comments come after Breton told French newspaper Les Echos recently that operators no longer see a fair return on their investments in network infrastructure. Legislation to correct this failure, he said, would appear before the end of the year.

The Commission’s shifting position

In an infamous 2014 speech, then-Digital Agenda Commissioner Neelie Kroes told telecom operators to “adapt or die” — and that their predicament was not the platforms’ problem.

But Brussels’ perspective has altered to align with its regulations aimed at taming Big Tech: the content rules laid out in the Digital Services Act and the conduct obligations of the Digital Markets Act. In calling upon digital platforms to stump up some hard cash for network costs, the Commission now wants to address the issue of fairness in the architecture of the internet.

The Big Tech lobby is resurrecting Kroes’ nearly decade-old comments, with the CCIA claiming that “internet services are driving the demand for telecom services,” according to the association’s Brussels head, Christian Borggreen.

“Telcos are struggling with charging their own customers for their data consumption,” Borggreen said at a policy event hosted by ETNO this week, adding that the call for payment “at both ends of the cable” is “misguided.”

The lobby also states that any move to levy an “internet tax” on Big Tech firms could endanger the EU’s net-neutrality rules, which state that internet service providers must not restrict end-users’ ability to access online services. “The very idea of charging some online services but not others is by definition discriminatory,” Borggreen said.  

Big Tech’s tough time

Big Tech’s position looks potentially dicey.

According to documents recently obtained by POLITICO, the EU Council — representing 27 nations across the bloc — supports the Commission’s intention for platform services to “make a fair and proportionate contribution to the costs of public goods, services and infrastructures.” The wording first appeared in the Commission’s Declaration on Digital Rights and Principles and provides the foundation for upcoming legislation.

Telecom lobbies are arming up for a fierce battle. In late March, ETNO and GSMA both held closed-door meetings with Commission Executive Vice President for Digital Margrethe Vestager and Breton and members of their inner circles. As per a transparency report entry, talks with Vestager’s office centered on “roaming, network costs and upscaling.”

Big Telecoms is buttressing its high-office schmoozing with commensurately high consultancy spending. A report from GSMA and Kearney warns of “market imbalances between network operators and online services providers.” Meanwhile, research from ETNO and Axon Partners Group points out that major global data traffic beneficiaries make “little or no financial contribution to the development of national networks.”

But the Big Tech lobby is unlikely to go down without a fight. CCIA’s Borggreen says that “ETNO’s demand has been debated before and rejected before” and that the debate over “who holds the power” in the dynamic between internet access service providers and platform service has become skewed over the years.

“Who holds the power? Who holds the cable?” Borggreen said. “To say that the [company] who holds that cable has no influence, is just factually wrong.”

Pieter Haeck contributed to this report.

Brussels’ next lobbying dogfight: Big Tech vs. Big Telecoms

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