In the EU and US, Big Telecom desperately wants Big Tech to pay them billions of dollars for no coherent reason
from trolling toll department
We’ve noted for years how desperately “Big Telecom” is trying to get “Big Tech” to pay them billions of dollars for no coherent reason. This effort is what sparked the net neutrality wars and, despite being regularly disguised as adult policy-making, it is little more than a lobbyist-fueled cash grab.
The effort still begins with claims that Big Tech isn’t “paying its fair share” for internet access, despite tech giants like Amazon, Google, Netflix and others paying billions of dollars for it. bandwidth – and their own cloud storage, transit, undersea cables, and in Google’s case…it’s own residential ISP.
From there, the argument suggests that because Big Tech consumes so much bandwidth, they would have to pay Big Telecom billions more every year – just because. It really doesn’t make much sense, largely because this demand is coming from big tech users, who have already paid an arm and a leg for bandwidth. It’s also stupid because we’ve repeatedly refused (both in the EU and the US) to meaningfully check the routine abuse of telecom monopolies of the billions in subsidies they already receive annually.
This stupid telecom industry policy ploy has been going on since about 2002. But in the US and EU, telecom lobbyists have exploited legitimate and growing annoyance from tech giants to convince captured regulators that they should consider this new “big tech tax” again. These captured regulators (as Trump named FCC Commissioner Brendan Carr here in the US) then show up at major news outlets trying to pass off the money as something bigger than it is. ballast.
Carr appeared again this week in the Financial Times (paid), insisting that it is absolutely urgent that the EU and the United States start taxing Google, Amazon, Netflix and others to finance the broadband infrastructure around the world:
“It’s a mature question and it’s at a turning point,” Carr told the Financial Times. “The days when big tech was untouchable are over.” “We need hundreds of billions of dollars to fund public network upgrades, but current funding models are under strain. Profits are piling up in the hands of these big tech companies and it’s time for a rebalancing,”
Carr is, of course, nowhere to be found when it comes to policing subsidy fraud by telecom giants. Never has he mentioned more whistleblower complaints that AT&T has been scamming US school districts for years. He doesn’t show up when a company like Frontier Communications repeatedly scams the US government out of millions of dollars. You won’t hear a word from him when we find out that Verizon has failed to roll out fiber despite decades of tax breaks and subsidies.
Carr is of course right that the programs we have to subsidize broadband access need to be strengthened. But if you watch him carefully, he will never defend anything that would hold existing telecommunications giants responsible for subsidy fraud. And he avoids this topic (at least when big corporations are involved), because he operates as a direct, captured proxy for these telecom giants.
Last week a group of top telecoms experts wrote to EU policy makers to politely explain how this whole political game is really just a mindless cash grab by telecoms giants in hoping to capitalize on the (often legitimate) anger against Big Tech. They noted that the existing “shipper pays” terminology of peering agreements has been hijacked by the industry to try to dress it up as real policy.
And this week, Europe’s main telecoms regulator, BEREC, released a report which once again concluded that this proposal to force tech giants to pay even more money to telecom giants was absolute nonsense. They found, once again, no genuine examples of CAPS (content and application providers) getting a “free ride”:
both sides of the market – the CAPs on the one hand and the users of these applications on the other – already contribute to the payment of Internet connectivity. There is no evidence that operator network costs are not already fully covered and paid for in the Internet value chain (from the CAPs on one side, to the end users on the other).
BEREC has said it many times, but it just doesn’t matter. Guys like Carr (and his equivalent in the EU) will just beat that “free ride” drum mercilessly, hoping the repetition will forge reality. And they do this not because they are genuinely interested in the welfare of broadband consumers (most of those same gentlemen could care less about monopoly power or consumer protection), but because they help the telecom giants saddled the tech giants with billions in new additional costs.
At this point, BEREC’s job is simply to provide recommendations as European lawmakers consider the trajectory of EU digital policy for the next decade. But the fact that they had to deflate that silly balloon Again shows how easily adult policy-making can be hijacked by a few telecommunications giants and their various political puppets.
Just a relentless amount of effort has gone into trying to pretend that this idea is a bona fide adult policy proposition, when it’s just a decades-long attempt to get paid for not do nothing by telecom giants with a long history of subsidy fraud. If you really want to boost broadband access, start by watching the telecom monopolies and the billions we throw at them for perpetually unfinished networks.
Once regulators fix this corruption-fueled money pit, then perhaps they can talk seriously about dramatically expanding the contribution base for broadband deployment with a straight face.
Filed Under: big tech, big telecom, brendan carr, broadband, corruption, digital divide, eu, fcc, broadband internet, subsidies, tax breaks, telecom, usa