US Big Tech lobby challenges EU Commission’s telecoms ‘investment gap’

4 months ago 14

Doubts on the European Commission’s claim of an investment gap of at least €174 billion to meet Europe’s 2030 connectivity targets have been shed in a document shared with Euractiv by lobby association CCIA Europe, which represents Amazon, Google, and Meta, among others.

The Commission quoted this estimate in its February 2024 white paper on the future of connectivity, which triggered a public stakeholder consultation, open until 30 June. CCIA Europe’s document is in response to the consultation.

CCIA Europe said the investment gap could easily be met with contributions from telecom operators, citing numbers from the European Telecommunications Network Operators’ Association (ETNO), Big Tech’s adversary in this debate.

On Wednesday (25 June), ETNO called on the EU executive to find a way “to bridge its investment and innovation gap” in its position paper.

The €174 billion figure is based on a study by a WIK-consult published in July 2023, which said the investment needs will likely be more than €200 billion.

In an unusual turn of events, the lobby association of US Big Tech is siding with EU consumer association BEUC and the European Competitive Telecommunications Association (ETCA) in questioning the Commission’s use of the WIK-consult study.

It also concurs with DOT Europe’s position, a lobby representing the same US companies plus Google and Apple. DOT Europe questioned the Commission’s connectivity investment gap in December 2023.

Tracing the numbers

Telecoms operators invest between €50 billion and €60 billion in infrastructure annually, “so the projected investment need of €200 billion would be met within four years, well before the 2030 deadline,” CCIA Europe wrote, ultimately citing ETNO’s own data.

This claim is backed by a blog post by CCIA Europe’s head of policy, Alexander Roure. The post quotes an ETNO post from 2023, which said that EU telcos spent €56.3 billion in 2021 on capital expenditure (capex).

However, the 2023 ETNO post quotes another ETNO report, which is based on a 2022 report by Analysis Mason. ETNO members spent €38.3 billion in capex in 2021 on mobile and other telecoms infrastructure investments, with another €18 billion coming from non-ETNO members.

CCIA Europe furthermore calls for an “increased level of transparency” on how public funds are allocated to EU telecom operators deploying their networks in remotely and scarcely populated areas where no business models drive competitive investments.

Level playing field

CCIA Europe also opposes extending the European Electronic Communications Code to cloud and other digital service providers, a stance in direct opposition to ETNO.

The lobby also called on the Commission to completely drop the principle of the senders-pay principle, which would charge digital content providers for the internet traffic they generate. This idea, also known as fair-share tax, has been essentially dropped from the debate.

Deutsche Telekom and Meta have been in court in Germany since 2022 about whether Meta has to pay a bandwidth-dependent fee over using Deutsche Telekom interconnection points (like routers), which some experts say could influence the outcome of a senders-pay principle in EU regulation.

CCIA Europe also said an extended regulatory framework between telecom operators and cloud providers would “lead to network fees.”

The Commission should not regulate the interconnection market, the CCIA stated, citing a June 2024 report by the Body of European regulators (BEREC).

The report is open to interpretation. It reads that it is plausible that the mutual interdependence between European telecom operators and US Big Tech balances their respective bargaining relations.