The biggest bandwidth consumers have to pay. The battle between telecom operators and “Gafa” is far from over. This time, a more detailed request values the amount to be paid at around 2 billion euros.
This is a topic that is not new, but it is still relevant. Orange, Free, Bouygues Telecom and SFR are once again stepping up to the plate to request financial participation from “Gafa”, and more specifically from streaming platforms.
As indicated The informedin a note from the French Telecommunications Federation (FFT), “for the four operators, the costs generated by the six users identified on mobile are estimated at almost 1.5 billion euros per year and around 500 million euros on fixed networks“. In summary, French operators demand 2 billion euros from “Gafa”, including Apple, Amazon, Facebook and even Google, and also from Netflix.
Why do operators demand such an amount?
French operators and suppliers ask these companies to finance the network through which the data passes. And “Gafa”, but also Netflix, are the most bandwidth consumers.
E.g, Netflix consumed almost 20% of French internet traffic in 2021 (source: Arcep). In 2021, 51% of traffic to customers of the main Internet Service Providers (ISPs) in France will come from five content providers, including Netflix, Google, Akamai, Facebook and Amazon.
Here we find the most important streaming services, including Netflix, Prime Video, YouTube, but also Disney+. In fact, the Akamai content distributor is notably used by Disney+. Google and its YouTube platform use just over 10%, Facebook and Amazon (Prime) just over 5%, according to Arcep data, still for the year 2021.
In order not to create a barrier to entry into these sectors for new entrants, the French Telecommunications Association (FFT) wants to set a threshold above which it will be necessary to pay.
This threshold will also make it possible to charge new entrants who exceed a certain amount of data, which will surely lead to charging Snapchat or even TikTok in the future. To calculate this threshold, the challenge will be to assess the traffic volume for each platform during peak hours from 20:00 to 22:00. When this amount of traffic is calculated based on an average over 12 months, it will then be possible to invoice these players.
Europe is also putting pressure on the web giants via the European Telecommunications Network Operators (ETNO), a consortium that brings together all the telecommunications companies in Europe.
A handful of players alone take up more than 50% of the world’s bandwidth.
It is now time to reorganize the fair remuneration of the networks.
After DSA & DMA it is now one of the main projects in our digital space.https://t.co/xzZforv9V7
— Thierry Breton (@ThierryBreton) 4 May 2022
Thierry Breton, EU Commissioner, had declared it on Twitter“A handful of players alone take up more than 50% of the world’s bandwidth. It is now time to reorganize the fair remuneration of the networks ».
The battle is far from over
The battle is far from over, usage is exploding and the current pipes were not designed to absorb all the traffic. The further we go up the internet tree structure and the more the amount of transported data increases, the growth is exponential with exploding uses.
Behind this battle is one of the most important principles: it is actually the neutrality of the networks in question. The solutions and other offers that these players develop and their attempts to influence regulators have an impact on the speeds of your Internet access, on the price you will pay for it, but also on the services you can use.
And precisely, we cannot remain neutral in the face of the growing power of ISPs. Faced with this asymmetry, one may worry that new startups and innovative offerings do not have the power or money to execute these kinds of transactions or to build their own networks. They will then be at a disadvantage compared to their biggest competitors and operators.
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