Internet growth has not pushed up network costs: Dutch govt.

The Dutch government has increased its criticism of EU telecoms operators’ efforts to make Big Tech companies contribute to the deployment of 5G and broadband.
LTE subscribers with Internet

The government argues that the claims of rising network costs due to unchecked data growth lack factual support. Instead of implementing a uniform approach like a network fee imposed on video streaming companies, the government suggests a more effective solution would be to adopt a toolbox consisting of various instruments targeting specific issues in different EU countries.

These remarks were outlined in a position paper shared with the European Commission and EU member states before a meeting of EU telecoms ministers in Luxembourg on Friday, Reuters news report said.

The significant growth of Internet data in the past did not result in increased network costs for large telecom operators. This is because network equipment has become more powerful without an increase in price. By neglecting this crucial insight, a nonexistent problem is being suggested.

This issue has created a divide between Deutsche Telekom, Orange, Telefonica, and Telecom Italia on one side, and Alphabet Inc’s Google, Apple, Meta Platforms, Netflix,, and Microsoft on the other.

In reality, the overall network costs have remained constant despite consistent high growth over the last few decades, while European telecom operators have significantly improved their profit margins in the same period, the paper said.

The Dutch government believes that safeguarding the interests of European consumers and businesses should be prioritized over protecting large telecom operators. They highlight that the combined revenue of major EU telecoms providers in 2021 amounted to 188 billion euros, whereas Netflix’s annual revenue was only 9 billion euros.

The Dutch government argues against the need for direct payments from Big Tech companies, stating that end-users already pay for their access lines, including network traffic costs. They also caution that such interventions could disrupt the functioning of the internet.

Furthermore, the Dutch government opposes calls to relax merger regulations by antitrust regulators in order to facilitate the creation of large pan-European telecommunications champions. They believe that the benefits of such cross-border mergers for telecom operators are generally limited and do not convincingly contribute to broader society.