For some time now, telecommunications operators have been asking large technology companies to contribute to the maintenance of network infrastructure by sharing costs through a formula known as fair share or fair contribution.
By making such contributions and sharing the costs, it would be possible to have the capacity to invest more and contribute to network upgrades through relevant investments. However, accepting such a request is not proving easy, and fair share is causing serious debate in the telecoms sector across Europe.
What is fair share?
To understand what is happening in the telecoms sector, it is important to understand the meaning of fair share. The aim of fair share is to share resources, infrastructure use or frequency spectrum between telecoms and large technology companies in a fair way between each participant.
The large telecoms operating in Europe, such as Telefónica, Deutsche Telekom, Orange, Vodafone, along with several industry associations, such as the GSMA, and are calling for the large technology companies and platforms to make their contributions based on the increase in traffic that has occurred in recent years (which could already be seen during the 2020 health crisis) as well as the increase in traffic expected in the future, with the consolidation of other uses that will benefit from the boost of technologies such as the 5G mobile network.
According to a study by the European Network Operators Association, ETNO, in 2021 alone, 56% of global traffic came from six Big Tech: Alphabet, Apple, Amazon, Meta, Microsoft and Netflix. However, the position of these large companies is not in favour of establishing some kind of payment for the use of the network involved in the development of their activity.
Although it does not seem easy given the real need to maintain an infrastructure without affecting the services users receive, it is increasingly necessary to adopt a solution among all the actors. In such circumstances, the authorities seek to promote fair competition on a level playing field.
This is to avoid the emergence of monopolies or significant inequalities. The use of infrastructure is also part of this approach, which is managed to reduce costs and improve efficiency in order to meet the needs of society.
What is happening in Europe
Although these considerations are longstanding, in recent months the debate has been reopened as Europe’s major telecoms operators have stressed the need to agree on fair share.
On the one hand, operators are calling for technology companies to help finance networks as traffic growth continues to increase. On the other hand, Big Tech argues that any payment for network use would affect the neutrality of the internet.
They add that they have already made substantial investments in network development, such as the deployment of submarine cables to ensure adequate connectivity between Europe and America, which also benefits the telecoms operators themselves.
For their part, the technology companies comment that, if they were to make the payments they are being asked to make, users would be harmed by a possible increase in the prices of the services they offer.
The European Union’s position
The debate between the companies is not reaching a satisfactory solution, which has led the European Union to act. The European Parliament has shown itself to be in favour of the operators’ position, which it has argued on the basis of data and the current situation in the sector, where around 60% of data traffic on the networks is already concentrated in six large technology companies, with no investment in infrastructure.
The so-called Competition Policy Report also refers to fair share. It contains amendment 12, which states that the economic sustainability of telecommunications networks is essential to the EU’s objectives. The EU has proposed that, by 2030, there should be high-performance connectivity for European citizens, but without compromising competition rules.
The report calls on the European Commission to mitigate power asymmetries in decision-making. At the same time, it calls for a policy framework in which large traffic generators have to contribute to the fair financing of telecommunications networks, but without affecting net neutrality.
Such an approach would close the infrastructure investment gap of 174 billion euros, as identified by the European Commission.
Fair share thus becomes a tool to avoid serious imbalances in the telecommunications sector. As technology companies increase traffic and therefore the use of networks, it seems only fair that they contribute to the maintenance of the infrastructure. The aim is that users should benefit and enjoy higher quality services.
