Internet data growth hasn’t driven up network costs for telecom operators, Dutch government says

By Foo Yun Chee

BRUSSELS (Reuters) – The Dutch government has stepped up its criticism of efforts by EU telecoms operators to get Big Tech to help pay for the rollout of 5G and broadband, saying claims that the Uncontrolled data growth has driven up network costs not supported by facts.

Instead of a one-size-fits-all approach such as a network fee levied on video streaming companies, it would be better to have a toolbox with different instruments targeting specific problems in different EU countries, he said. -he declares.

The comments were set out in a position paper shared with the European Commission and EU countries ahead of a meeting of EU telecommunications ministers in Luxembourg on Friday.

“In fact, contrary to all these persistent claims, the strong growth of Internet data in the past has not confronted large telecommunications operators with higher network costs,” the document seen by Reuters reads.

“This is because network equipment is getting more and more powerful at the same price. By omitting this crucial idea, a problem that does not exist is suggested.”

The issue pits Deutsche Telekom, Orange, Telefonica and Telecom Italia against Google, Apple Inc, Meta Platforms Inc, Netflix Inc, Inc and Microsoft Corp.

“In reality, total network costs have remained constant despite consistently high growth over the past few decades, while profit margins for European telecom operators have improved significantly over the past decade,” the paper said.

“Protecting the big telecoms operators should not be a goal in itself, because the interests of European consumers and businesses should come first,” the Dutch said, citing the 188 billion euros in combined revenues of the big telecoms providers from the EU in 2021 against Netflix’s 9 billion. euros in annual turnover.

They said direct payments are unjustified because end users are already paying for their access line, including network traffic costs, while such intervention would affect the functioning of the Internet.

The Dutch also criticized calls for antitrust regulators to relax merger rules to allow the creation of very large pan-European telecommunications champions.

“The synergies for such cross-border mergers with telecom operators are generally considered to be relatively limited, while there do not appear to be compelling benefits for society at large.”

(Reporting by Foo Yun Chee; Editing by Chizu Nomiyama)

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