After a long indulgent lunch, the waiter has just arrived at the table with the bill; both the telecommunications companies and Webscale companies like Amazon, Netflix, YouTube, and Meta look at each other – who’s going to settle the bill, are they going to split the bill, or will telcos be made to pay the bill yet again?
Telcos have been disgruntled that they are always digging deep and paying for big techs’ lunch. Should big tech get their hands out of their pockets and look to contribute towards their data-hungry internet services?
With data traffic continuing to surge and telcos revenues continuing to slide, telecom execs are looking to apply pressure on regulators to force big techs to pay for their share of network infrastructure.
Avoiding the telcos infrastructure bills
It’s becoming more and more common that telecommunication companies are voicing their concerns about how Internet-based content players are not contributing when it comes to network infrastructure, as seen recently with Deutsche Telekom and Meta.
In this instance, Meta has terminated its direct peering relationship with Deutsche Telekom. Meta previously had an agreement with the carrier to send data traffic on the Deutsche Telekom network for a negotiated price. While the two could not come to a mutual agreement about negotiating a new discounted pricing structure saw the company take legal action against the social media giant for non-payment, with the carrier winning its case.
Where there’s a bill there’s a way out
Meta has since decided to route its data traffic to Deutsche Telekom’s network via a transit provider instead of the previous direct route. All eyes are on how this will play out, given there are similar cases like this playing out across multiple countries and involving multiple companies.
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By GlobalDataContent players are closely monitoring the implications since this could set a global precedent and undermine net neutrality. Since 2016, telecommunications companies in the European Union have been bound by the Open Internet Access regulation.
Open Internet Access is ensuring all internet traffic is treated equally without discrimination, blocking, throttling or prioritisation. The Deutsche Telekom-Meta case has experts arguing that this violates Europe’s net neutrality law which protects people’s right to use the applications of their choice.
Regulators chased to intervene
Outside the EU countries like South Africa, Australia and the United States, telecom execs are mixed in their thoughts on how to navigate this issue, with some aggressively chasing regulators to intervene, while others prefer commercially agreed upon arrangements with big tech companies.
In the UK, in 2020, the government introduced a Digital Services Tax which applying a 2% tax on the revenues of search engines, social media services and online marketplaces which derive value from UK users.
While there is no silver bullet in solving this global issue, content providers might want to look at storing their content locally in partnership with telecommunications providers. Additionally, telecommunications providers can look to partner strategically with the content provider offering exclusive content deals and joint marketing initiatives for its customers.
