Content media

A call for major content platforms to contribute to the cost of the European digital infrastructure that carries their services, Digital Platforms & Services

As digital activities grow at breakneck speed, connectivity is simply vital to our society, our economy and ultimately our daily lives. Data traffic, which increases by up to 50% per year, is the determining factor in the size and capacity of our networks.

Telecom operators have invested heavily to modernize their network infrastructure and increase their capacity and thanks to this, communications and the Internet have continued during the Covid-19 crisis in Europe despite soaring peaks in fixed and mobile traffic. Continued investment is fundamental to ensuring citizens’ unrestricted access and participation in our digital society.

But the current situation is simply not sustainable. The investment burden must be distributed in a more proportionate way. Today, video streaming, gaming, and social media created by a few digital content platforms account for over 70% of all traffic flowing through the networks. Digital platforms take advantage of “hyperscaling” business models at low cost while network operators make the necessary investments in connectivity. At the same time, our retail markets are in perpetual decline in terms of profitability.

As things stand, network operators are unable to negotiate fair terms with these giant platforms due to their strong market positions, asymmetric bargaining power and lack of fair regulatory conditions.[1].

Consequently, we cannot make a profit from our very large investments, which jeopardizes the further development of the infrastructures.

With major digital content platforms continually pushing for higher quality streaming, the drastic change in data traffic we are experiencing will increase steadily and without limits. If we don’t correct this imbalanced situation, Europe will fall behind other regions of the world, which will ultimately degrade the quality of experience for all consumers.

There are signs of change elsewhere in the world. South Korea is discussing a national law to create the regulatory conditions for a fairer contribution to network costs. This follows ongoing litigation after the “Squid Game” series generated increased traffic. And in the United States, policy makers are moving towards a universal service also financed by digital platforms.

These shared investments are also key to accelerating green connectivity and digital technologies that contribute to more sustainable economies and boost efficiency, strengthening Europe’s international green leadership and promoting green jobs. Without a “price” for the data sent, the incentive for large content providers to optimize their data traffic will remain weak.

We warmly welcome the recent commitment of the European Commission[2] develop adequate frameworks so that “all market players benefiting from the digital transformation (…) make a fair and proportionate contribution to the costs of public goods, services and infrastructure”. We now urgently call on lawmakers to introduce rules at EU level to make this principle a reality.

Time is running out, especially given the huge investments still needed to meet the 2030 connectivity targets set by the European Commission in its Communication on “Europe’s Digital Decade”. Without a fair solution, we won’t get there.

[1] Sandvine Report on Global Internet Phenomena, January 2022

[2] European Declaration on Digital Rights and Principles for the Digital Decade, COM (2022) 28 final, 26.1.22