European Commission May Delay Decision on Big Tech Contribution to 5G and Broadband Rollout Funding

Telecommunications companies in Europe advocating for major tech corporations, including Alphabet’s Google, Meta’s Facebook, Netflix, Microsoft, and Amazon, to contribute to the funding of 5G and broadband rollout may have to await the next European Commission to determine whether rules in this regard will be proposed.
Kazakhstan mobile networkEU industry chief Thierry Breton is likely to outline a strategy in the next year, leaving the decision on legislation to the subsequent Commission, Reuters news report said.

Deutsche Telekom, Orange, Telefonica, and Telecom Italia argue for “fair-share funding,” contending that major tech companies should share the financial burden due to their significant contribution to internet traffic. However, tech giants refer to this as an “internet tax.”

Initial expectations were that Thierry Breton would propose legislation after gathering feedback from both sides on what has been identified as an investment gap amounting to 200 billion euros ($212.4 billion).

Thierry Breton, a former chief executive officer at France Telecom and an advocate for the telecom operators’ push, faced resistance from some fellow commissioners and EU countries, which has led to the probable delay in the decision.

While no final decision has been made, a legislative proposal on the funding issue might emerge in the Commission’s work program to be revealed on October 18, outlining the EU executive’s long-term goals. In a recent blog post, Thierry Breton hinted at the need for broader rules in the telecoms market, suggesting the creation of a “Digital Networks Act” to redefine telecoms regulation and address the investment gap.

Thierry Breton is expected to voice concerns about recent acquisitions of telecom stakes by sovereign investment funds and private equity firms to EU telecoms ministers in an upcoming meeting in Leon, Spain.

Recent acquisitions, such as the Saudi Arabian group STC’s acquisition of a 9.9 percent equity stake in European telecom giant Telefonica, have raised apprehensions, prompting the Spanish government to scrutinize the deal to safeguard its strategic interests.