Deutsche Telekom: Google, Facebook, Netflix, Apple, Amazon and Microsoft should pay for part of the Internet infrastructure

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According to a Deutsche Telekom blog post published on May 2, a “fair sharing of costs” in operating and expanding networks would help both the digital economy and climate protection in Europe.

In the meantime, the debate on “fair cost sharing” is “in full swing”.
In a statement published in December, the presidents of 13 European telecoms groups said that large Internet providers must invest in network growth.

The argument is constant: while the network operators finance the networks, internet services generate income from the data traffic that passes through the networks. For this reason, Deutsche Telekom proposes to modify the regulations at the EU level, since most of the data traffic is generated by IT companies.

Frontier Economics estimates traffic-related network expenses in Europe to be between €36 billion and €40 billion a year for Deutsche Telekom, Orange, Telefónica and Vodafone.

This amount refers only to data traffic; Other costs such as network expansion or other operating costs are not included. As a result of this research, it is impossible to quantify the proportion of data traffic in complete expenses.

According to Deutsche Telekom, another Axon study found that Google, Facebook, Netflix, Apple, Amazon and Microsoft collectively account for more than half of data traffic. These six companies have a market capitalization thirty times greater than that of the eight main European telecommunications operators combined, ”says the site. Additionally, groups achieved significant revenue growth, while European telcos saw their revenue decline by 7% during 2015.

Due to high network development costs and declining profits, Telekom requests the participation of technology companies. Axon models scenarios in which European network operators could earn €10, 20 or 30 billion annually.

Without the Internet services provided by technology companies, the offer of network operators would be much less attractive.

Furthermore, these contributions from Internet service providers are incompatible with net neutrality. Provided certain companies pay for network access, a two-speed network can arise.

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