EU Plan To Make Big Tech Pay 'fair Share' Of Telco Fees Reportedly Weeks Away

The European Commission could issue draft legislation calling for cloud providers and hyperscalers to offset traffic generated by their services by directly funding telco infrastructure as early as March.

However, the draft won't come before the European Commission completes a public consultation and questionnaire that will query cloud and telco providers on their investment plans in the region, Reuters reported, citing a "person familiar with the matter."

These tech giants are responsible for generating a considerable amount of traffic. In May, the GMSA estimated that cloud providers and hyperscalers like Amazon, Google, Microsoft, Apple, Meta, and Netflix account for 57 percent of global traffic.

And while European telcos, including Deutsche Telekom, Orange, and Telefonica, have voiced support for EU regulation, US tech companies have pushed back, characterizing the efforts as an internet service tax, according to Reuters.

The question of whether companies like Amazon or Google should have to pay extra is being more heavily debated. In September, the European Telecommunications Network Operators' Association, or ENTNO for short, issued a statement calling for big tech companies to pay their fair share of internet infrastructure.

"We believe that the largest traffic generators should make a fair contribution to the sizable costs they currently impose on European networks," the statement read.

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However, US tech companies aren't the only ones that have expressed concerns over proposed legislation. In a letter [PDF] to the European commission earlier this month, ISP association Euro-IX expressed concerns that regulation resulting from the so-called "fair share" debate would inadvertently lead to higher costs and poorer quality of service for ISP customers in Europe.

"Citizen's experience in basic business operations, sharing data, accessing cloud services, and developing research projects will be negatively impacted," the association warned. "This can be seen by mandatory termination charges implemented in South Korea, which has resulted in reduced quality and security of the services provided to end users."

A root of these concerns appears to be that, if forced to pay for traffic used by customers, tech companies would downgrade their services — for example, cutting the bitrate of streaming video — harming customer experiences in the process.

The group also expressed concerns that such a move could upend established internet exchange models, resulting in higher costs for interconnection agreements.

While Euro-IX didn't take a stance for or against "fair share" regulation, the association urged policymakers to proceed with caution to avoid introducing systemic weakness into critical infrastructure.

While draft legislation could be ready in as little as 12 weeks, Reuters notes that EU member nations and lawmakers will need to weigh in on the measures, before it's enacted. ®