There will be “zero taboo” when the European Commission examines making telecoms groups pay Big Tech for network rollouts and whether to relax rules on cross-market consolidation, EU commissioner Thierry Breton said.
Speaking at the global telecoms conference Mobile World Congress in Barcelona, Breton, who oversees the EU’s internal market, warned the industry’s business model needed to undergo a “radical shift” as he launched a 12-week consultation on telecoms infrastructure.
He added: “It is time we have a serious discussion about the existing obstacles to cross-border consolidation” which he sees as “holding back our collective potential compared to other continents”.
The review has been widely seen as a referendum on whether Big Tech and video streaming companies should pay telecoms groups a “fair” contribution to the billions they are investing to roll out full fiber and 5G networks.
While tech companies have long rejected what supporters call a “fair contribution” to network costs, there are signs that regulators in Europe and the US are becoming more receptive to the argument.
Breton stressed on Monday that “it is not about whether one interest should prevail over the other” but about “taking the giant leap for connectivity in front of us”.
Deutsche Telekom, Orange, Telefónica and Telecom Italia have stepped up their lobbying efforts, pointing out that technology platforms account for more than 50 percent of the traffic carried through the network and still pay a smaller contribution to the supporting infrastructure.
Netflix and Google have recently become more vocal in their opposition to the proposals, arguing that they have contributed generously to the internet infrastructure by investing in data centers and submarine cables, as well as developing services that customers want to use on smartphones and computers.
They also say the proposal undermines the principle of “net neutrality,” which prohibits broadband providers from throttling users’ access to the web.
Asked if he would look at the question of allowing more consolidation in the country among telecoms operators – which have long been called companies across Europe – Breton said the consultation was “very open” and “nothing is taboo”.
Pietro Labriola, chief executive of Telecom Italia, told the Financial Times: “If we win the battle for a fair share but are not allowed to integrate, this will not solve the fundamental problem.”
He added that the commission’s consultation showed that “something different is finally happening”, adding that Breton “knows the challenges” of the sector because he used to be a telecommunications executive.
Breton was chief executive of France Telecom, now Orange, until 2005.
“There is a difference between theory and reality, and they know reality,” he said. “If you look around Europe now, everyone has problems, everyone is looking for market consolidation, everyone sees that it is no longer profitable. If you want the telecommunications sector in Europe, you have to intervene now.
Christian Borggreen, senior vice-president of the Computer & Communications Industry Association, which represents the interests of technology groups, stressed last week that “imposing a fee on internet traffic will harm European consumers and harm the open internet by treating data differently”.
He called on the commission to “reject this wrong idea once and for all.”