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EU studying whether Big Tech should pay network costs – EU document

BRUSSELS, Jan 31 (Reuters) – The European Union (EU) will consult the technology and telecoms sectors on whether tech giants like Alphabet Inc’s Google ( GOOGL.O ), Meta ( META.O ) and Inc ( AMZN.O ) should subsidize network costs, according to a Commission document seen by Reuters on Tuesday.

EU telecoms providers including Deutsche Telekom (DTEGn.DE), Orange (ORAN.PA), Telefonica (TEF.MC) and Telecom Italia (TLIT.MI) say the six largest content providers account for more than half of data internet traffic and should contribute their fair share. The providers also point to Netflix Inc (NFLX.O), Apple Inc (AAPL.O) and Microsoft Corp (MSFT.O).

The tech giants say the idea is equivalent to an internet traffic tax that could interfere with Europe’s net neutrality rules treating all users equally.

The commission’s query is part of a 19-page document the EU executive drafted before it proposes legislation.

The EU executive is expected to publish the document next week to garner feedback from telecoms operators and Big Tech, although the timing may change. The next step is an agreement with EU countries and lawmakers to finalize the legislation.

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“Some stakeholders have suggested a mandatory mechanism of direct payments from CAPs (content application providers)/LTGs (large traffic generator) to contribute to finance network deployment. Do you support such suggestion and if so why? If no, why not?” the questionnaire asked.

The questionnaire also asks who the mechanism should apply; whether it would negatively impact innovation, the internet ecosystem and consumers; and whether the EU should create a continental or digital levy or fund.

The EU will also query Big Tech and telecoms providers’ investment spending and future developments, confirming a Reuters story this month.

“The Commission’s questionnaire is basically asking questions that seek to justify the ‘fair share’ narrative pushed by big telcos. What is more, it seems to ignore the impact on consumers and fundamental net neutrality protections,” an industry source said.

“The Commission is also asking for detailed business information, such as peering contracts, that is usually confidential. This effectively excludes key stakeholders from taking part.

Reporting by Foo Yun Chee; Editing by Josie Kao

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