Tech Giants May Pay For Broadband Expansion

Three national governments say major tech companies should pay some of the costs of expanding broadband networks. Critics argue such a move could have negative knock-on effects.

The idea is highlighted in a leaked document from governments in France, Italy and Spain. They were responding to EU regulators who are exploring the idea of big companies paying some of the costs of upgrading telecommunications infrastructure.

The document notes that just six companies, including Alphabet (Google), Meta (Facebook) and Netflix make up the majority of all Internet traffic. (Source: reuters.com)

'Free Ride' Accusations

Although the companies pay for their own servers and connections, they don't necessarily contribute anything to building networks in the first place, particularly in situations where governments subsidize expansion because cable and communication companies don't find particular locations profitable.

Any compulsory contributions from the tech companies would be hugely controversial. The tech companies will likely argue that they pay their fair share in connection fees and point to the way delivery and logistics companies don't directly pay more money towards road maintenance. (Ironically, Amazon has funded some new interchanges in the UK to give its distribution centers better expressway access).

The proposals have also prompted fears among some people who are otherwise skeptical about the power of major tech companies. That's because they believe lawmakers won't be prepared to simply impose costs on the big businesses.

Net Neutrality May Be Bargaining Chip

Instead, they worry that politicians and tech groups may instead make a deal by which the companies pay towards broadband networks and in return governments relax net neutrality laws. (Source: euronews.com)

That could mean, for example, that Netflix is allowed to pay Internet service providers to prioritize its traffic so it gets higher speed. Another option could be for its video streaming to be excluded from monthly data caps on mobile data plans.

Both of these would violate the commonly held principle that all Internet traffic should be treated equally.

What's Your Opinion?

Should tech giants pay more towards broadband network expansion? If so, would this work better by imposing laws or reaching a deal? Is it concerning that so much Internet traffic involves just a few sites and services?