Meta Platforms expressed strong opposition on Thursday to the initiative by European telecom operators seeking additional contributions from major technology firms for network costs. The company argued that such measures would fail to address the financial issues faced by these operators and overlook the substantial investments made by tech companies.
Telecom giants including Deutsche Telekom, Orange, Telefonica, and Telecom Italia have been advocating for nearly twenty years for U.S. technology leaders to help fund the rollout of 5G and broadband networks.
These operators contend that since they manage over half of the internet’s data traffic, prominent tech firms—such as Alphabet’s Google, Apple, Meta, Netflix, Amazon, and Microsoft—should help offset the billions of euros required for infrastructure development.
“We acknowledge the financial difficulties that European telecom operators are experiencing after a long history of strong performance,” said Kevin Salvadori, Meta’s vice president for network, along with Bruno Cendon Martin, the director and head of reality labs wireless, in a recent blog post.
They continued, “However, the proposals from some European telecom operators to levy network fees on Content Application Providers (CAPs) like Meta do not present a viable solution.”
The two executives criticized the fee proposals for being based on incorrect assumptions, arguing that they fail to appreciate the value CAPs bring to the digital landscape and ignore the infrastructure investments made by tech companies.
The European telecoms lobbying group ETNO contested Meta’s stance, highlighting the extensive funding required in the coming years. A spokesperson pointed out that official estimates indicate that EUR 174 billion (approximately Rs. 15,54,000 crore) is still needed to meet Europe’s network investment demands.
“Big tech companies should help bridge this funding gap, as their business models heavily depend on the traffic generated by European networks. For instance, the average user in the metaverse is projected to consume up to 40 times more data than the typical user today,” the spokesperson stated.
Salvadori and Martin cited Meta’s significant financial commitment to its platforms, including Facebook, Instagram, and Quest, noting that this investment drives demand for internet access charged by telecom operators.
They also pointed to the over $880 billion (around Rs. 72,27,800 crore) invested globally in digital infrastructure, which includes approximately $120 billion (nearly Rs. 9,85,600 crore) annually between 2018 and 2021, an investment that reportedly saves telecom providers about $6 billion (nearly Rs. 49,280 crore) each year.
Meta dismissed the telecom operators’ concerns that the development of the metaverse would excessively strain existing infrastructure capacity.
“This notion is unfounded. The growth of the metaverse will not necessitate increased capital expenditures for telecom operators looking to enhance network investment,” Salvadori and Martin asserted.
© Thomson Reuters 2023
