EU wants to hammer big tech & streamers with 5G build bill

in General Discussion
Europe is considering whether companies like Netflix and Apple that use lots of bandwidth should be forced to pay for upgrades to the infrastructure of the internet.

With the rise of video streaming services like Netflix and YouTube, the amount of bandwidth required for typical internet tasks has ballooned, forcing infrastructure providers to increase what they offer to internet service providers and other entities. However, the cost of the upgrades could be paid for by major companies like Apple in the future.

The European Union is pondering a proposal to coax companies that consume the most bandwidth into paying for the next generation of Internet infrastructure, a document seen by Bloomberg reads.

Deemed a "fair-share" vision from the EU, the proposal would seek to get the largest consumers of bandwidth to pay the cost of the infrastructure required for the data-heavy services to operate in the first place. This would include the cost of rolling out 5G networks and fiber infrastructure, for example.

There is also the potential for a mandatory payment system to be put in place, allowing funds from tech companies to directly go to telecom operators.

The proposal is only a draft for the moment, with the EU in consultation with the industry over the matter. This includes determining if there should be a threshold to determining if a company is a "large traffic generator," and therefore liable for contributing to funds.

However, even at this early stage, there is some push-back from within the EU itself on the matter. The European Union's electronic communications regulator determined in October that there is "no evidence" services like Netflix should pay telecom providers to invest in infrastructure upgrades, as such a move could cause "significant harm to the internet ecosystem."

Such a plan would be most beneficial to European countries, though it would be expected that companies based outside the region would also gain from the arrangement. However, the initiative may not necessarily help improve internet access outside of the continent.

The use of pooled funds and mandatory payments for companies with higher usage requirements may also help sidestep some net neutrality issues, since the paid improvements would apply to all Internet users in Europe, rather than prioritizing traffic of paying parties.

The consultation period is expected to continue for another two to three months.

Read on AppleInsider


  • Reply 1 of 10
    sdw2001sdw2001 Posts: 17,992member
    Let me get this straight...

    Step 1:  Stop Netflix, Apple, Amazon and Google from purchasing bandwidth and content delivery prioritization (forcing net neutrality).  

    Step 2.  Telecoms bitch that they can't earn enough money from the big data users like...Netflix, Apple, Amazon and Google.  

    Step 3: Make Netflix, Apple, Amazon and Google pay the Telecoms for infrastructure to support....more bandwith.  

    (Hidden, ultra-important step: Bureaucrats get a piece of everything, more regulatory costs, more government control).  

    Got it.  
    JanNLred oakFileMakerFellerbeowulfschmidtllamawatto_cobra
  • Reply 2 of 10
    The companies already pay for bandwidth on one side, and the consumers already pay for it on the other.

    So what gives?
  • Reply 3 of 10
    applguyapplguy Posts: 235member
    The EU must realize it's ultimately the consumer that pays for infrastructure. If Netflix is paying to upgrade internet they will 1) raise rates to consumers or 2) leave the market. This is yet another way to tax EU consumers without explicitly taxing them. 
  • Reply 4 of 10
    danoxdanox Posts: 2,394member
    Netflix may be in trouble in the EU, but Apple probably will just drop streaming within the EU. It is a low percentage of their revenue and profits. The EU is working towards a family of products for the EU and another family of products for the rest of the world. They will not stop.

    The EU will also define screaming one way for the European companies and one way for the American companies and it will figure out someway to make it so that Spotify can still stay in the game. Note: Spotify just reported their last quarter and they’re losing more money as usual.

    edited January 31 FileMakerFellerwatto_cobra
  • Reply 5 of 10
    nubusnubus Posts: 231member
    danox said:
    Netflix may be in trouble in the EU, but Apple probably will just drop streaming within the EU.

    Apple is introducing USB C across devices to stay compliant with EU demands. Apple just added a USB C charger cable in Brazil to Apple TV 4K allowing customers to charge their remotes. iPhones bought in UAE don't have Facetime. Some countries have requirements for the amount of locally produced content. Those are just some of the ways Apple adjusts to local legislation. Doing business on a global scale does require Realpolitik.
  • Reply 6 of 10

    Here’s my idea.

    First ISPs should charge for every data packet that leaves a server farm (say Google in California). Then when it crosses the border into Canada the ISPs can charge for transferring the same data packet again and call it “international data transmission fees”. Finally when the data packet gets to my computer my ISP can charge me a third time for my “home connection”. They can get paid 3 times for the same packet of data.

    No wait, that’s not enough. Let’s make big tech companies pay us poor little ISPs to build this infrastructure. And let’s get the EU to help us. If we tell the EU it’s only big US tech companies that’ll have to pay they’ll get all giddy and pass a law for us. We don’t have to do anything.

  • Reply 7 of 10
    This seems ludicrous on the face of it, but we have to remember that in the EU the ISPs offer much better value than the US and that the telecom companies were government-owned until two or three decades ago. So a majority of the politicians involved may still have (unconscious) biases regarding ISPs and be susceptible to arguments of internet service being in the national or EU interest. Maybe the infrastructure itself is being paid for by the government and then leased to the ISPs and the forward planning has failed to take into account the capital costs required by new equipment.

    Several studies have shown that the operating and maintenance costs of the infrastructure are almost imperceptibly changed by the actual traffic volumes, so a fee for usage doesn't really make sense. If anything, the ISPs benefit from having negligible marginal costs - every additional user is pure profit once the break-even point has been reached.

    I don't think taxation is the right approach, but I can see why some of the EU government is considering it.
  • Reply 8 of 10
    MadbumMadbum Posts: 518member
     Notice  EU never goes after any European companies…. Only American

    and you have a brain dead Us government helping this communist bureaucracy that is the EU

    we need people who will stand up for American companies 

    edited January 31 watto_cobra
  • Reply 9 of 10
    sphericspheric Posts: 2,477member
    Madbum said:
     Notice  EU never goes after any European companies…. Only American

    That’s a completely ignorant lie. 

    Notice that Americans only ever read anything at all about the EU when it directly affects American companies. 

    In the most cases where y’all get huffy, the US had virtually identical legislature and regulations in place already that EU companies need to abide by to do business there. 

    In this particular case, not — because Americans are content with paying the third-highest prices worldwide for internet access despite modern life being virtually impossible without it. 

    Things work a little differently over here. Nobody expects you to understand. 
  • Reply 10 of 10
    This is like forcing tech companies to accept a collect call. It is really bad regulation. It also doesn’t really work… maybe they could force them to put an edge CDN on the carriers network and charge for that access, but you can’t do it on the Internet at large without major breaches to user privacy. Charging the edge CDN is still double-dipping since those services were already paid for.

    Apple pays their provider, their provider pays the layer 3 provider. The end user pays their provider (the carrier), the carrier pays the layer 3 provider. It is a little more complex than that with edge network providers, but this is how it works and it is fair. Generally the edge networks charge Apple and offer a discount on layer 3 charges to the carrier (and might even pay the carrier directly), so the carrier is already making money off of Apple’s services. Trying to make Apple now pay the carrier that is already collecting from their user and getting a discount from the edge CDN on layer 3 fees is like triple charging for the service- Apple, the edge CDN, and the end user. Only the second two are fair since it is money in return for a service. The carrier charging Apple directly is literally a tax the EU would allow a carrier to levy for no service in return.
    edited February 1
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