July 23, 2024

EU push for Big Tech to fund 5G rollout shelved to 2025

Deutsche Telekom, Orange, Telefonica and Telecom Italia call it fair-share funding while Big Tech says it amounts to an internet tax.

Europe’s telecoms operators pushing for Big Tech to help pay for the rollout of 5G and broadband will likely have to wait for the next European Commission to decide whether to propose rules to this end, people familiar with the matter said on Tuesday.

Telecoms companies say Alphabet’s Google, Meta’s Facebook, Netflix, Microsoft and Amazon should bear some of the rollout costs because they make up a huge part of internet traffic.

Deutsche Telekom, Orange, Telefonica and Telecom Italia call it fair-share funding while Big Tech says it amounts to an internet tax.

EU industry chief Thierry Breton would propose legislation after seeking feedback from both sides this year on what he said is an investment gap of 200 billion euros ($212.4 billion).

The French commissioner, a former chief executive at France Telecom and supporter of the operators’ push, faced blowback from some of his fellow commissioners and some EU countries.

Breton will now likely set out a strategy next year on the subject, leaving it to the next Commission to decide whether to propose legislation, the people said.

The current Commission’s five-year term ends in November next year.

There is no final decision, and a legislative proposal on the funding issue could still pop up on the Commission’s work programme to be announced on Oct. 18 that will lay out the EU executive’s long-term objectives, one of the sources said.

Breton in a blogpost on Tuesday suggested broader rules for the telecoms market.

“We have announced that Europe will do ‘whatever it takes’ to keep its competitive edge, and we are looking for concrete and ambitious recommendations on the future of the Single Market,” he wrote.

“Here is one: work on a bold, future-oriented, game-changing Digital Networks Act to redefine the DNA of our telecoms regulation. Getting it right will require vision, boldness and time, but we should start now taking concrete steps,” Breton said.

He said feedback provided by telecom providers, broadcasters, cloud service providers, business associations, consumer organisations and Europeans underscore the many regulatory barriers to a single telecoms market in Europe.

Breton will likely voice concerns about the recent acquisitions of telecoms stakes by sovereign investment funds and private equity firms to EU telecoms ministers at an Oct. 23 to 24 meeting in Leon, Spain, another person said.

Such worries have arisen after Saudi Arabian group STC recently acquired a 9.9% stake in Telefonica to become its biggest shareholder, a move which the Spanish government is now scrutinising to ensure that its strategic interests are upheld.

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