US tech giants face pressure from Europe’s telecommunications companies to pay for building the internet

In Europe, the battle between US Big Tech companies and telecommunications firms has reached a fever pitch. Telecom groups are pushing European regulators to consider implementing a framework where the companies that send traffic along their networks are charged a fee to help fund mammoth upgrades to their infrastructure, something known as the “sender pays” principle. Their logic is that certain platforms, like Amazon Prime and Netflix, chew through gargantuan amounts of data and should therefore foot part of the bill for adding new capacity to cope with the increased strain. The European Commission is preparing a consultation examining the issue, which is expected to launch early next year. For at least a decade, telecom firms have tried to get digital juggernauts to fork out to support upgrades to network infrastructure. Broadband operators are investing seismic sums of cash into their infrastructure to support next-generation 5G and fiber networks — 50 billion euros ($48.5 billion) a year, per one estimate. US tech giants should “make a fair contribution to the sizable costs they currently impose on European networks,” the bosses of 16 telecom operators said in a joint statement last month. A fundamental issue with the proposal is that it’s not clear how the payments to telecom companies would work in practice. It could take the form of a tax taken directly by governments. Or, it could be private sector-led, with tech firms giving telcos a cut of their sales in proportion to how much traffic they require. Not all regulators are on board. A preliminary assessment from the Body of European Regulators for Electronic Communications found no justification for network compensation payments. In the UK, the communications watchdog Ofcom has also cast doubts, stating it hadn’t “yet seen sufficient evidence that this is needed.”