Europe's Telecoms Want High-Traffic Companies Like Netflix to Fund Infrastructure Upgrades

"Faced with a squeeze on profits and dwindling share prices, internet service providers are seeking ways of making additional income," reports CNBC. One example? "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 simple argument is that telcos want to be duly compensated for providing this access and growth in traffic," media and telecoms analyst Paolo Pescatore, from PP Foresight, told CNBC. The idea is garnering political support, with France, Italy and Spain among the countries coming out in favor. The European Commission is preparing a consultation examining the issue, which is expected to launch early next year.... Meta, Alphabet, Apple, Amazon, Microsoft and Netflix accounted for more than 56% of all global data traffic in 2021, according to a May report that was commissioned by European Telecommunications Network Operators' Association. An annual contribution to network costs of 20 billion euros ($19.50 billion) from tech giants could boost EU economic output by 72 billion euros, the report added.... U.S. 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.... The debate isn't limited to Europe, either. In South Korea, companies have similarly lobbied politicians to force "over-the-top" players like YouTube and Netflix to pay for network access.... Meanwhile, tech giants say they're already investing a ton into internet infrastructure in Europe - 183 billion euros between 2011 to 2021, according to a report from consulting firm Analysys Mason - including submarine cables, content delivery networks and data centers. Netflix offers telcos thousands of cache servers, which store internet content locally to speed up access to data and reduce strain on bandwidth, for free.

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