The European Union is weighing a proposal to make technology companies that use the most bandwidth, such as Apple, Netflix, and Alphabet, to help pay for the next generation of internet infrastructure, according to a draft document seen by Bloomberg News.
Jillian Deutsch for Bloomberg:
The suggestions are part of a “fair-share” vision from the EU’s executive arm that could require large tech businesses, which provide streaming videos and other data-heavy services, to help pay for the traffic they generate. The draft document, which is part of a consultation with the industry, suggested firms might contribute to a fund to offset the cost of building 5G mobile networks and fiber infrastructure, as well as the creation of a mandatory system of direct payments from tech giants to telecom operators…
A concrete proposal is still a ways off, although it’s already generated controversy. The EU’s electronic communications regulator found in October that there is “no evidence” that platforms like Netflix or YouTube should pay telecom companies to invest in internet infrastructure and said such a move could cause “significant harm to the internet ecosystem.” The consultation — which will remain open for two to three months — is the first concrete step toward a plan.
While telecom companies have lobbied for years that tech companies should contribute to the expensive process of setting up digital infrastructure, many tech companies and lawmakers have expressed concern that this could hurt laws protecting “net neutrality” and ultimately degrade equal access to the internet.
MacDailyNews Take: Ultimately, the end user pays, regardless.
Either telecom companies raise rates to pay for their infrastructure costs or Netflix et al. raise rates to pay for the EU’s infrastructure tax.
If the latter comes to pass, all the EU will be here is what the EU (and Big Government anywhere) usually is: a meddling middleman moving costs around, increasing them with red tape, and sprinkling unintended consequences on top.
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Just another money grab for American companies HU the EU. The WU can’t support itself without funds from American companies.
MDN, your take on this today is a perfect description of all onerous government meddling in the markets. Markets are self-correcting! Except when governments screw everything up. Without the FED, for example, if inflation begins to rise (which these days can only really happen with an initial gov’t interference: an increase in the money supply by the illegal FED) then minor self-corrections due to market forces will bring things back into line. Example, any commodity rarity will gradually increase the price and reduce consumption, and over time the alternatives will emerge due to the appeal of the higher price floor for the newer substitute.
This works for currencies too. A strong dollar will reduce exports and lower the demand overseas—reduced overall demand will produce a lower price. Micro-adjustments made by the markets are far more accurate and easier on our lives than the 100 years of lurching moves by the FED. Remember that the Roaring 20s and the Great Depression (& Great Recession) have all resulted from FED acceleration and brake applications that were way off the mark and always too late. The insiders get to profit in both directions while we suffer the losses.
Netlfix?
I swear, Europe treats Apple like a private ATM machine. Socialized medicine running a bit low on funds? Apple must be guilty of something we can invent.