Big Telecom’s Quest To Tax Big Tech For No Reason Will Cause Massive Internet Instability, Group Warns

Broadband

from the please-pay-me-billions-of-dollars-for-no-coherent-reason dept

For much of the last year, European telecom giants have been pushing for a tax on Big Tech company profits. They’ve tried desperately to dress it up as a reasonable adult policy proposal, but it’s effectively just the same thing we saw during the U.S. net neutrality wars: telecom monopolies demanding other people pay them an additional troll toll — for no coherent reason.

To sell captured lawmakers on the idea, telecom giants have falsely claimed that Big Tech companies get a “free ride” on the Internet (just as they did during the U.S. net neutrality wars). To fix this problem they completely made up, Big Telecom argues Big Tech should be forced to help pay for the kind of broadband infrastructure upgrades the telecoms have routinely neglected for years.

It’s a big, dumb, con. But yet again, telecom lobbyists have somehow convinced regulators that this blind cash grab is somehow sensible, adult policy, dubbing it their “sender pays” initiative. Dutifully, European Commission’s industry chief Thierry Breton said last September he would launch a consultation on this “fair share” payment scheme in early 2023, ahead of any proposed legislation.

Tech giants like Netflix have tried to explain that this whole thing is just part of a longstanding attempt to force them to pay telecom additional money for no reason. Both Konstantinos Komaitis and K.S. Park also penned a good piece here at Techdirt explaining how these policies could have a profoundly negative impact on user and enterprise costs, broadband quality, and how the Internet functions.

The European Internet Exchange Association (Euro-IX), a coalition of core transit and interconnection telecom providers, have also now come out in criticism of the plan, saying it risks creating “systemic weaknesses” across the Internet in Europe.

More specifically, a letter from Euro-IX to European regulators argues that if you start forcing tech companies to pay “last mile” telecoms a troll toll, it will not only drive up the cost of streaming services for everyone, it could result in tech companies routing their traffic in such a way that it creates overall network instability as they sensibly seek to avoid being charged billions of dollars for no reason:

“The internet is a complex ecosystem, and it is policy-makers who are ultimately responsible for systemic effects resulting from policy choices,” wrote Bijal Sanghani, managing director of Euro-IX. Sanghani added that legislators should not prioritise “administrative rules [over] technical necessity or a high-quality internet” for those in Europe.

You don’t have to look far to see examples of how this kind of policymaking creates problems. Telecom giants in South Korea convinced regulators to impose regulations that open the door to this kind of troll tolls on tech giants. As a result, you’ve now got South Korean ISPs suing Netflix simply because television shows like Squid Game are popular, and there are higher costs all along the chain.

That’s of course not how the Internet fucking works. Users already pay their broadband provider for broadband access. And tech giants not only pay for broadband, they directly invest countless billions in cloud storage, transit routes, undersea cables, and in some instances (Google Fiber) their own residential ISPs. There’s absolutely no such thing as getting a broadband “free ride” in the U.S. or Europe.

I don’t like treating this stuff as an adult policy proposal because it simply isn’t. It’s bullshit slathered with a veneer of pseudo-engineering rhetoric just to trick captured and dumb policymakers and a lazy press. Consumers and tech giants alike in the U.S. and EU pay telecom operators countless billions of dollars more than they already should due to monopolization and constrained competition.

Those heavily subsidized ISPs then routinely use their power and influence to crush competition, stall deployment, and drive up service costs for everybody along the chain. Yet when you read through analysis of what’s being proposed in Europe, few, if any, participants can be bothered to even mention either the harm of monopolization, or the decades of outright subsidy fraud by telecom giants.

It’s a profound failure that the press, policymakers, and people in positions of influence aren’t clearly explaining that this is all a dumb, baseless con.

Yes, both the EU and U.S. need to find additional ways to creatively subsidize broadband expansion, especially to the marginalized communities long neglected by these very same telecom companies.

But taking money from tech giants (again, for no actual reason) then throwing it in the lap of an industry with a forty year history of anti-competitive behavior, subsidy fraud, and routine under-investment isn’t the answer. Hopefully the EU figures this out before it’s broader rules for the Internet are finalized later this year, but I wouldn’t count on it.

And I suspect if telecom companies succeed in the EU, you’ll see a similar renewed push in the U.S.

FCC Commissioner Brendan Carr (when he isn’t busy hyperventilating about social media companies he doesn’t regulate) has already been priming this pump for companies like AT&T for the last two years with a series of op-eds you’ll notice make all the same, dumb arguments.

Filed Under: brendan carr, broadband, con, digital divide, fcc, high speed internet, net neutrality, sender pays, telecom, troll tolls