EU's Breton likely to set out strategy on Big Tech, telco funding debate next year, sources say

BRUSSELS (Reuters) – EU industry chief Thierry Breton is expected to unveil a 5G and broadband rollout strategy next year that will require Big Tech companies to contribute financially, according to sources familiar with the matter. However, it will be up to the next European Commission to decide whether to implement legislation based on this strategy.

Several of Europe’s telecoms operators, including Deutsche Telekom, Orange, Telefonica, and Telecom Italia, argue that Alphabet’s Google, Meta’s Facebook, Netflix, Microsoft, and Amazon should bear a portion of the costs because they account for a significant amount of internet traffic.

This funding scheme is referred to as “fair share funding” by the telecoms companies, while Big Tech entities argue that it is essentially an internet tax.

The proposal from EU industry chief Thierry Breton is expected to address the concerns surrounding the financing for the deployment of 5G networks and broadband services across Europe.

Currently, these telecom companies are responsible for investing in the necessary infrastructure for 5G and broadband expansion. The push for Big Tech to contribute financially aims to alleviate some of the burden on these operators.

However, the decision on whether to implement legislation based on this funding requirement will ultimately rest with the next European Commission.

The involvement of Big Tech companies in financing the infrastructure rollout is seen as a means to ensure a more equitable distribution of costs, as they heavily benefit from the internet traffic generated by their platforms and services.

The strategy proposed by Thierry Breton is expected to be released next year, providing a roadmap for the rollout of 5G and broadband services across Europe.

The ongoing debate between telecoms operators and Big Tech companies on fair funding for internet infrastructure highlights the challenges and complexities surrounding the development of next-generation networks.

Reporting by Foo Yun Chee; Editing by Tomasz Janowski