Most EU countries reject Big Tech tax to finance 5G

Europe is immersed in a race to the bottom for definitively implement 5G and broadband in the region, significantly improving the efficiency and connectivity of its citizens. However, in a meeting held in recent hours, up to 18 telecommunications ministers have positioned themselves against the initiative of the large telecommunications operators of force Big Tech to share the cost of networks and to help in the financing of 5G deployment.

Thierry Breton, head of industry of the European Commission EC, has exposed the collective refusal of the network tax for technology companies, since this would have very serious negative consequences. Among the victims would be Google, Manzana, Netflix, Amazon either Microsoftwho claim that they already invest enough in the digital ecosystem that they also have to pay the new network tax.

On the contrary, there are large operators such as telephone, Orange, Telecom Italy and Deutsche Telekom, among others, that require cost sharing. They claim that the data from the hyperscalars and their contents represent much of the network traffic. Despite acting as an intermediary, Breton could be an ally. It must be remembered that he is a former director of France Telecom and Atos.

A problem with consequences

All this would mean a lethal consequence for final consumers, which would see their rates increased. In fact, the European telecommunications ministers affirm that the lack of an analysis on the effects of a tax on the network, the absence of an investment deficit and the risk that consumers are the big victims are aspects to take into account.

In addition, if this measure were imposed, it would be breaking the rules in favor of net neutrality which requires that all users are treated equally, as well as that there is no interference in innovation and the quality of the products and services offered.

The positioning of the EU countries

There are countries like Spain, France, Greece, Italy, Hungary and Cyprus that support the tax, while others like Austria, Belgium, the Czech Republic, Denmark, Finland, Germany, Ireland, Lithuania, Malta and the Netherlands show their strong opposition. For their part, Poland, Romania and Portugal have opted for a neutral position in the technological conflict.

Breton is now expected to issue a final report in late June with a summary of feedback from Big Tech, telecom providers and other stakeholders, which will help determine next steps. However, the legislative proposal will need to be negotiated with EU countries and legislators before it becomes law.

Background to the agreement

On May 19, the European Commission ended the public consultation after listening to the opinions of the industry. He Official College of Telecommunications Engineers (COIT) presented its allegations positioning itself in favor of the ‘far share’ or ‘fair contribution’ from content platforms to the telecommunications network.

Taking as reference the European Association of Telecommunications Network Operators (ETNO)by 2030 it is expected that there will be a financing deficit in the networks of about 174,000 million eurossomething that would mean that 45 million citizens of the old continent would be left without broadband services.

In addition, the COIT ensures that the current regulations do not encourage the necessary investments to guarantee a solid digital environment in the EU, being necessary enable a monitoring mechanism and system that would allow the fair and proportionate contribution of all market players.

All this is possible if you have neutral entities with extensive knowledge of the telecommunications market to advise the national authorities to achieve the technical and social objectives of the fair contribution and to guarantee the sustainability of European networks. Of course, without losing the development of a competitive and accessible digital environment.

If we look at the national territory, the Spanish Association for Digitization, DigitalES and the union UGT, proposed a model of fair contribution by the large digital platforms in favor of the deployment of the new networks in Europe. And it is that according to their data, the six largest Internet platforms account for more than 50% of world traffic and they have business models that encourage them to increase the volume of data that flows through the networks.

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