Big Telecom Continues Its Global Quest To Tax Big Tech For No Good Reason

from the troll-tolls dept

A few months back we noted how FCC Commissioner Brendan Carr had taken to Newsweek to dust off a fifteen year old AT&T talking point. Namely that “big tech” companies get a “free ride” on telecom networks, and, as a result, should throw billions of dollars at “big telecom” for no real reason. You’ll recall it was this exact argument that launched the net neutrality debate, when former AT&T CEO Ed Whitacre proclaimed that Google wouldn’t be allowed to “ride his pipes for free.” Basically, telecom giants have long wanted somebody else to fund network builds they routinely leave half finished despite billions in subsidies.

While this dumb argument originated with AT&T, it has been adopted by countless international telecoms over the years. Like this week, when a coalition of 13 large European telecom companies signed a joint letter demanding that U.S. tech giants pay them more money for no coherent reason:

“Large and increasing part of network traffic is generated and monetized by big tech platforms, but it requires continuous, intensive network investment and planning by the telecommunications sector. This model?which enables EU citizens to enjoy the fruits of the digital transformation?can only be sustainable if such big tech platforms also contribute fairly to network costs.”

Again, this is the idiotic argument that just never dies. We had an entire fifteen year net neutrality debate over this that nobody appears to have learned much from.

Tech giants like Google already pay for not only bandwidth, but they own billions of dollars worth of transit routes, undersea cables, and other infrastructure (Google even runs its own residential ISP). Consumers also pay an arm and a leg for bandwidth thanks to heavily monopolized telecom markets. This idea that anybody in this chain gets a free ride is absolutely ridiculous. Telecom giants regularly enjoy fat profits thanks to limited competition and largely feckless government oversight. They’re also endlessly subsidized to finish networks routinely left mysteriously undercooked.

Telecom is basically just trying to exploit its market power in a bid to nab an unnecessary troll toll. Yet despite being in bad faith with little merit, it doesn’t take much for telecom giants to dust off the dumb argument and re-inject it into the discourse every few years. That’s thanks in large part to unskeptical news outlets like Reuters that parrot the claims in good faith, without including any important context. For example, Reuters frames the entire debate like this:

“The call by the CEOs comes as the telecoms industry faces massive investments for 5G, fibre and cable networks to cope with data and cloud services provided by Netflix and Google’s YouTube and Facebook.

Reuters doesn’t deem it worth mentioning that it’s consumers demanding access to those services. Consumers that already pay their regional telecom monopoly an arm and a leg for broadband. This demand isn’t somehow “big tech’s” fault. Nor is it somehow big tech’s responsibility to pay an extra troll toll if an ISP fails to meet consumer bandwidth demand despite bloated revenues. Reuters (much like telecom allies like the FCC’s Brendan Carr) also somehow omits how global telecom giants routinely underinvest in network upgrades despite billions of dollars in tax breaks, subsidies, and regulatory favors over a period of decades.

It’s just uncanny how telecom just keeps trotting out the same dumb argument that it deserves to be paid extra for no coherent reason, and the majority of news outlets parrot the request as if it’s actually being made in good faith.

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Comments on “Big Telecom Continues Its Global Quest To Tax Big Tech For No Good Reason”

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Discuss It (profile) says:

Internet in first world countries

Was talking to a relation that did a long term job overseas. Italy or France, or some place. Can’t remember. Turns out
cell phones cost $7 a month, unlimited phone/text/data,
internet is 1 gig fiber and costs about $11 a month.
She was mad because her VOiP was blocked by the US ISP, they wouldn’t unblock it at any price, had to pay $45 a month for their VOiP with only a US number plus they charged for international calls, internet was over $80 for 100Mb. Cell she got so mad she wouldn’t talk about it, over $100 for her and hubby

Anonymous Coward says:

Re: Re:

It is strange Home Depot has to pay for water that’s already paid for by the business or individual watering the seed.

It is strange that these tech companies get a ‘free-ride’, but no one is willing to explain how they do it. I want free internet too!

It is strange that proponents for having tech companies pay more never accept the challenge of paying for a tech company’s ‘free Internet access’. If the access is truly free, this should be an easy challenge to win, right?

Anonymous Coward says:

Also many rural areas have zero acess to broadband and barely have a 3g mobile signal since wall street does not like telecom building out networks that take years to complete. Behind this big telecom makes donations to Politicans to reduce competition and allow mergers less competition equals higher prices All Politicans should be pushing to allow local broadband networks where there is not broadband or there is only one provider like Comcast to offer service

ECA (profile) says:

Re: Telelcom Revenue

For all the money from
Companies that create sites
The Governments
the battles with access to online services like netflix and others, THEY LOST.
They still want a CLOSED system, that they can Charge access to the Connection to their OWN services. Even tho they arnt adding anything new except ACCESS.

Can anyone see the restriction here in the USA, where you would have 4 Areas, and the west coast could not connect to the east coast? Sounds like we are going backwards from the old phone system. Used to be, calling outside a county or Block area, was long distance. Sometimes calling across the street was long distance, cause they were on a different subdivision.

If you can afford a High end car cash purchase every year, If you can pay CASH for a new over priced home every year, If you just PAY any price for something just to have it, even if its 10 times over priced.

$300,000 for 2.16 acres?(there are 640 acres in 1 mile, think hard about that) Jsut cause they show a pic of the Whole valley dont mean you get much of it.
$4,250,000 HOUSE, no property info, went from $259/per sqft to over $700/per sqft
Cause some idiots int he state PAID over $1 million for some land. the states based Property value on real estate prices(bad idea).

That One Guy (profile) says:

If it works why change it?

It’s just uncanny how telecom just keeps trotting out the same dumb argument that it deserves to be paid extra for no coherent reason, and the majority of news outlets parrot the request as if it’s actually being made in good faith.

You kinda raised and settled your own point there, they keep trotting out the same arguments because they face no pushback for doing so, safe in the knowledge that the dupes ‘reporting’ on their claims will simply parrot whatever they’re told like nice little PR stooges with the number that call them out on their gross dishonesty few and far between.

As for the claim itself I’m just going to fall back to what I’ve been saying this whole time, anyone making the ‘free ride’ argument or repeating it should be told to put up or shut up. Pay even a week’s worth of the internet bills for the companies being whined about and provide documentation proving it or admit that it’s a grossly dishonest argument and drop it, with any attempts to dodge treated as an admission that they know they’re making/repeating a dishonest argument and don’t care.

This comment has been deemed insightful by the community.
PaulT (profile) says:

"Large and increasing part of network traffic is generated and monetized by big tech platforms,"

Yes, it’s generated by your customers, who pay you for the connection to those services – without which they wouldn’t want to pay as much for higher bandwidth – and monetised by the companies they pay for the services they provide (either through direct payment or ads), who also pay their providers for the bandwidth they need to serve your customers.

I’m not seeing the problem here… The bandwidth is being paid for on both ends, and the only reason the demand exists is because your customers are demanding it.

"The call by the CEOs comes as the telecoms industry faces massive investments for 5G, fibre and cable networks to cope with data and cloud services provided by Netflix and Google’s YouTube and Facebook."

Yeah… all those services are over a decade old now. Why is it a surprise that people want to use them now?

PaulT (profile) says:

Oh, and a little bit of hilarious context seeing the Telefonica is on the list. Here in Spain, Telefonica (under their local brand name Movistar) is my current internet provider. In the last few years since I’ve had fibre installed through them, they’ve offered free upgrades twice (from the initial 300Mbps to 600 then 1Gbps), and on top of the package that includes their own IPTV package, they offered 3 months free Disney+ and then Netflix, meaning that I pay them for access to those services on top of the free upgrades. With the traditional (in Europe at least) zero data caps for non-mobile connections.

You’d have thought there would be a better business plan for them if they find it so impossible to justify their customers using such services?

Anonymous Coward says:

Re: Let's blame farmers for the lack of rain

While increasing water costs to farmers may or may not be an ideal way to deal with increasing water shortages through much of the Southwest US, it’s not ultimately incorrect. Unless we have a sustained alteration of rainfall patterns (which is not a reliable expectation), something is going to need to give. Farmers, particularly of a handful of high water consumption crops, are one possibility.

The difference is that the the various water management systems don’t have any control over rainfall patterns, whereas the ISPs have complete control over network operations. So where the ISP can produce any arbitrary amount of bandwidth and is just choosing not to, the water company has only as much water as there is and no more.

Toom1275 (profile) says:

It’a more than double-dipping Big Telecom wants. They want:

  • Money from customers to provide service (~97% profit margin)
  • Money from the backbone providers they peer with
  • Money from those who already pay to get their internet service from other internet providers (aka "Big Tech")
  • Government subsidies (provided by taxpayers) in return for doing nothing
  • Money claimed to be needed to upgrade service
  • Money defrauded from customers by witholding paid-for bandwidth (aka paid prioritization)
  • Money defrauded from customers by denying paid-for connection time (broadband data caps)
  • Money gained by anticompetitive natural monopoly manipulation to artificially inflate competitors’ prices (aka zero-rating)
  • Money extorted from innocent victims by a scheme of (Concast) deliberately throttling traffic and falsely blaming the target (Netflix), while denying good-faith attempts by the target to provide smoother service

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