Big Tech ‘fair share’ debate set to dominate Barcelona mobile meet

Workers walk past billboards of GSMA’s 2023 ahead of the Mobile World Congress (MWC) in Barcelona, Spain, Feb 25, 2023. REUTERS/Nacho Doce

BARCELONA -A clash between Big Tech companies and European Union telecom firms over who will underwrite network infrastructure is set to dominate discussion at the world’s largest telecoms conference this week.

Representatives from tech firms including Alphabet, Meta and Netflix attending the Mobile World Congress (MWC) in Barcelona are expected to push back against the EU proposals.

More than 80,000 people, including tech executives, innovators, and regulators, on Monday were descending on this year’s event where new product launches will also take the spotlight.

Last week, EU industry chief Thierry Breton launched a 12-week consultation on its “fair share” proposals, under which Big Tech platforms would bear more of the costs to roll out 5G and broadband across the bloc.

Breton spoke at an opening event on Monday morning on a panel with Orange CEO Christel Heydemann and Telefonica CEO Jose Maria Alvarez-Pallete.

“This is the time to collaborate between telcos and Big Tech,” Alvarez-Pallete said at the conference.

“Collaborating means everybody contributing with a fair share of the effort,” he said.

The Dutch government on Monday warned against imposing an internet toll on tech companies, becoming the first EU government to criticize Breton’s plan.

It said such a move may breach net neutrality rules and lead to price hikes for Europeans.

Content providers such as Netflix, which has arranged for its CEO Greg Peters to meet with Breton at the conference, argue their firms already invest heavily in infrastructure.

They say that paying additional fees will detract from investment in products that benefit consumers.

By contrast, Deutsche Telekom, Orange, Telefonica and Telecom Italia have been actively lobbying for Big Tech to pay the fees.

GSMA, an association representing more than 750 mobile operators and the organizing body behind MWC, has been at the forefront of the debate.

“This discussion around ‘fair share’, or what we sometimes call the ‘investment gap’, is going to be a threshold question,” said John Giusti, GSMA’s chief regulatory officer.

Critics of the fair share or “SPNP” (Sending Party Network Pays) model have warned the so-called “traffic tax” could lead content-driven platforms to route their services via ISPs (internet service providers) outside of the EU.

Orange told Reuters the telecoms industry was not asking for special privileges in its demands. A spokesperson said the EU’s consultation was a “positive first sign” of a debate starting.

“We argue for a framework that will facilitate a fair and equitable commercial relationship that recognises a direct contribution by tech giants to network costs,” they said.

Regulations will, however, be difficult to implement and enforce, said Shahid Ahmed, executive vice president at NTT and an adviser to the U.S. Federal Communications Commission.

“We saw something very similar – the whole net neutrality debate – attempted in the U.S.,” he said.

The MWC, which begins on Monday, will also see new product launches from companies including HMD Global, Honor, Huawei, RealMe and Xiaomi.

Other hot topics include the 5G adoption rate, which has disappointed some executives, and the potential uses of generative AI systems such as OpenAI’s ChatGPT.

“Everything on the floor of MWC is about looking to the future,” Guisti said.

RELATED STORY:

Big tech should share Europe network costs — France, Italy, Spain document